Legislature(2001 - 2002)

04/16/2002 09:44 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          April 16, 2002                                                                                      
                              9:44 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-02 # 59, Side A                                                                                                             
SFC 02 # 59, Side B                                                                                                             
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Dave Donley convened  the meeting at approximately 9:44 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Dave Donley, Co-Chair                                                                                                   
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Jerry Ward, Vice Chair                                                                                                  
Senator Lyda Green                                                                                                              
Senator Gary Wilken                                                                                                             
Senator Alan Austerman                                                                                                          
Senator Lyman Hoffman                                                                                                           
Senator Donald Olson                                                                                                            
Senator Loren Leman                                                                                                             
                                                                                                                                
Also Attending: CLIFF STONE,  Staff to Senator Alan Austerman; BRUCE                                                          
TANGEMAN, Fiscal  Analyst, Division of Legislative  Finance; ANNETTE                                                            
KREITZER,  Staff to  Senator Loren  Leman; LORETTA  BROWN, Staff  to                                                            
Senator Jerry Ward                                                                                                              
                                                                                                                                
Attending via Teleconference:                                                                                                 
There were no teleconference participants.                                                                                      
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 403-APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                     
SB 289-APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                     
HB 404-APPROP: MENTAL HEALTH BUDGET                                                                                             
SB 288-APPROP: MENTAL HEALTH BUDGET                                                                                             
                                                                                                                                
The  Committee heard  subcommittee  reports  for the  Department  of                                                            
Public Safety,  the Department of Natural Resources,  the Department                                                            
of  Transportation  and Public  Facilities,  the Court  System,  the                                                            
Office of the Governor,  and the Legislature. No action was taken on                                                            
the bills.                                                                                                                      
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 403(FIN) am(brf sup maj fld)(efd fld)                                                                
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize funds."                                                                                                  
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 289                                                                                                        
     "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."                                                                                                           
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 404(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."                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 288                                                                                                        
     "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."                                                                             
                                                                                                                                
                                                                                                                                
This was the second hearing for these bills in the Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
[Note: The subcommittee reports cited are on file.]                                                                             
                                                                                                                                
Department of Public Safety                                                                                                   
                                                                                                                                
Senator Alan Austerman, Chair                                                                                                   
Senator Lyda Green, Vice-Chair                                                                                                  
Senator John Cowdery                                                                                                            
Senator Georgianna Lincoln                                                                                                      
Senator Robin Taylor                                                                                                            
                                                                                                                                
CLIFF  STONE,  Staff  to  Senator  Alan  Austerman,  referenced  the                                                            
prepared subcommittee Operating  Budget Closeout Recommendations for                                                            
the Department of Public  Safety and noted that both the Senate bill                                                            
number  and the  House  of Representatives   bill number  have  been                                                            
inadvertently misidentified  on page one of the report. He clarified                                                            
that  SB 289  is incorrectly  identified  as SB  288 and  HB 403  is                                                            
misidentified as HB 414.                                                                                                        
                                                                                                                                
Mr. Stone  stated that  the subcommittee  chair intended to  restore                                                            
$1,791,400 to  the Department of Public Safety's "core  elements for                                                            
public   safety."  He   stated  that   this   endeavor  was   partly                                                            
accomplished  by eliminating  $869,100 in  general funds  identified                                                            
for the  Batterers  Intervention Program,  the  Victims for  Justice                                                            
Program, and the Alaska Wing of the Civil Air Patrol.                                                                           
                                                                                                                                
Mr.  Stone continued  that  the subcommittee  members  reversed  the                                                            
Chair's action  and restored the funding  for those programs  in the                                                            
subcommittee's proposal.                                                                                                        
                                                                                                                                
Mr.  Stone   noted  that   the  Senate   subcommittee  additionally                                                             
recommended  a reversal of  the House of  Representatives'  $200,900                                                            
reduction  for fire  prevention  programs  and restoration  of  that                                                            
funding to the Department's Administrative Services budget.                                                                     
                                                                                                                                
Mr.  Stone then  explained  that the  subcommittee  adopted  several                                                            
amendments  that  "shifted"  $194,800  in  general  funds  from  the                                                            
Department's  Division of  Administrative Services  to the  Regional                                                            
Public Safety  Officers program, and  transferred other Division  of                                                            
Administrative  Services funds  to support  the Council on  Violence                                                            
and  Sexual Assault  and  recommended  the Committee  approve  these                                                            
changes.                                                                                                                        
                                                                                                                                
Co-Chair Donley  reminded the Committee  that the Senate  Majority's                                                            
budget allocation  for this Department  is $1,791,400 more  than the                                                            
amount   contained  in   the  budget   adopted  by   the  House   of                                                            
Representatives.  He  stated  that the  Senate  Majority  emphasized                                                            
funding that would provide  the Department with the "flexibility" to                                                            
prioritize  public  safety  and minimize  reductions  in  front-line                                                            
services that protect Alaskans.                                                                                                 
                                                                                                                                
Senator Olson  commented that, historically, when  general funds for                                                            
aviation programs  have been reduced  or eliminated, there  has been                                                            
an impact  on Rural Alaska;  therefore, he  asked whether the  Civil                                                            
Air Patrol funding has  been restored to its original funding level.                                                            
                                                                                                                                
Mr. Stone replied  that the subcommittee recommends  restoring those                                                            
funds, and  noted that approximately  $500,000 would be provided  to                                                            
fund the cost of fuel for the Civil Air Patrol.                                                                                 
                                                                                                                                
Senator Olson asked for  clarification that the subcommittee chair's                                                            
$869,100 general fund reduction  proposal would have reduced funding                                                            
for the  Civil Air  Patrol as well  as funding  for the Victims  for                                                            
Justice Program and the Batterers Intervention Program.                                                                         
                                                                                                                                
Mr. Stone  detailed  that the  proposed $869,100  reduction  removed                                                            
approximately   $120,000  in  general   funds  from  the   Batterers                                                            
Intervention Program; however,  he noted that other funding remained                                                            
available for  this program. He continued  that this reduction  also                                                            
removed approximately  $240,000 in general funds designated  for the                                                            
Victims  for  Justice  Program,  which  would  have  eliminated  all                                                            
funding for that  program, and he stated that the  remaining balance                                                            
was removed from the Civil Air Patrol general funding allotment.                                                                
                                                                                                                                
Senator  Olson asked  for  assurance that  Civil  Air Patrol  rescue                                                            
operations   would   be   sufficiently   funded   in   this   budget                                                            
recommendation.                                                                                                                 
                                                                                                                                
Mr.  Stone communicated  that  there are  many "valid  programs"  to                                                            
consider and that  reducing or eliminating any program's  funding is                                                            
a very difficult  decision. He asserted that while  the subcommittee                                                            
Chair recognizes  the  value of the  Civil Air  Patrol, the  goal of                                                            
providing  adequate  funding to  support the  core  programs of  the                                                            
Department  of  Public  Safety subcommittee   was paramount  in  the                                                            
decision.                                                                                                                       
                                                                                                                                
Senator Olson voiced relief  that the funds for the Civil Air Patrol                                                            
remain "in place."                                                                                                              
                                                                                                                                
Senator   Hoffman  noted   that  the   FY  03   $76,241,500   Budget                                                            
Recommendation for the  Department of Public Safety is approximately                                                            
$520,000 less than the  FY 02 Management Budget Plan of $76,767,500,                                                            
and he asked  which programs would  be affected by the Department's                                                             
funding reduction.                                                                                                              
                                                                                                                                
Mr. Stone responded  that most of the reductions recommended  by the                                                            
subcommittee  would affect the Division  of Administrative  Services                                                            
and the Office of the Commissioner.                                                                                             
                                                                                                                                
BRUCE TANGEMAN,  Fiscal  Analyst, Division  of Legislative  Finance,                                                            
informed the Committee  that the subcommittee recommendation reduces                                                            
approximately  $95,000 from the Office  of the Commissioner  and the                                                            
balance  is removed  from the  Division of  Administrative  Services                                                            
budget.                                                                                                                         
                                                                                                                                
Senator  Hoffman  asked  how  these  reductions   would  affect  the                                                            
Department's management ability.                                                                                                
                                                                                                                                
Co-Chair Donley informed  the Committee that the Department would be                                                            
presenting testimony to the Committee in a forthcoming meeting.                                                                 
                                                                                                                                
Senator Austerman  relayed that the  Department has determined  that                                                            
these  reductions  would occur  in the  Division  of Administrative                                                             
Services,  which, he asserted,  would result  in a reduction  in the                                                            
number of State  Troopers on patrol. He explained  that his approach                                                            
to the  Department's budget  focused on funding  reductions  to non-                                                            
core programs,  rather than  issuing across-the-board  funding  cuts                                                            
that might result  in weakening the entire Department.  He explained                                                            
that programs such as the  Victims for Justice program and the Civil                                                            
Air  Patrol  programs   are  programs  that  were   "added  to"  the                                                            
Department  and  are  not  considered  to  be  core  components.  He                                                            
qualified  that his recommendation,  as subcommittee  chair,  was to                                                            
reduce $869,000  in funding from the  non-core programs in  order to                                                            
maintain funding  for core programs  such as the number of  troopers                                                            
on  duty.  He  recounted  that  the  subcommittee   members  decided                                                            
otherwise.                                                                                                                      
                                                                                                                                
Senator   Austerman  spoke   to  the  amendments   adopted   by  the                                                            
subcommittee through which  funding for various programs was reduced                                                            
rather than  eliminated or  transferred, and  pointed out that  some                                                            
programs are proposed to  be alternatively funded by receipt-support                                                            
services  rather   than  general  funds.  He  stated   that  further                                                            
discussion  should ensue  to  clarify the  validity of  some of  the                                                            
receipt-support funding proposals.                                                                                              
                                                                                                                                
Mr. Tangeman  elaborated  that current State  statute prohibits  the                                                            
collection  of fees  as a receipt-supported   funding mechanism  for                                                            
some  of the  programs identified  in  the subcommittee  report.  He                                                            
communicated  that even though  the revenue  could be collected;  it                                                            
could  not be expended  because  the Department  does not  currently                                                            
have the necessary  authorization. He stated that  a change in State                                                            
statute  would be required  to accommodate  this funding  mechanism;                                                            
specifically the  collection and expending of monies  generated from                                                            
concealed handgun permit  fees and license fees for private security                                                            
guard personnel.  He summarized that the intent would  be to use the                                                            
revenue generated  from these  fees, rather  than general funds,  to                                                            
support specific programs.                                                                                                      
                                                                                                                                
Co-Chair  Donley  paraphrased  that  existing  law  allows  for  the                                                            
collection  of  these  fees;  however,   the  revenue  is  currently                                                            
deposited  into the  State's general  fund and is  not earmarked  to                                                            
support the  programs. He expressed  that State statutes  would need                                                            
to be revised  in order to allow the  program receipt revenue  to be                                                            
designated to fund the program.                                                                                                 
                                                                                                                                
Mr. Tangeman concurred.                                                                                                         
                                                                                                                                
Co-Chair Donley  reiterated that current State law  does not provide                                                            
the Department  with the required statutory authorization  to expend                                                            
the program receipts to support the program.                                                                                    
                                                                                                                                
Mr. Tangeman agreed.                                                                                                            
                                                                                                                                
Senator   Austerman   reminded   the  Committee   that   while   the                                                            
subcommittee's  FY  03  budget  recommendation  for  the  Department                                                            
provides $1,791,400 more  funding than the House of Representative's                                                            
budget; the  total budget recommendation  is approximately  $500,000                                                            
less than the FY 02 Management Plan.                                                                                            
                                                                                                                                
Senator  Wilken asked whether  this budget  recommendation  provides                                                            
for an overall  "increase, decrease or status quo"  in the number of                                                            
Alaska State  Troopers (Blue Shirts),  Fish and Wildlife  Protection                                                            
Officers  (Brown   Shirts),  and  Village  Public  Safety   Officers                                                            
(VPSOs).                                                                                                                        
                                                                                                                                
Senator  Austerman responded  that while "each  of those  categories                                                            
remains the  same;" the Division of  Administrative Services,  which                                                            
has received  across-the-board cuts,  ultimately makes the  decision                                                            
as to where reductions  would occur. He explained  that the Division                                                            
has the  authority to  decide, for  example, whether  to reduce  the                                                            
number of troopers  on patrol or to reduce the level  of funding for                                                            
purchasing ammunition.                                                                                                          
                                                                                                                                
Co-Chair  Donley clarified  that "staying the  same" means  that the                                                            
Senate subcommittee  report does not  specify any reductions  in the                                                            
numbers as compared  to FY 02. He noted that the House  subcommittee                                                            
report  specifically  recommends   a  reduction  in  the  number  of                                                            
troopers.                                                                                                                       
                                                                                                                                
Senator  Green  informed   the  Committee  that  the  FY  03  Senate                                                            
subcommittee budget  report specifically provides  funding to employ                                                            
individuals  currently  undergoing  VPSO training  after  graduating                                                            
from the program. She explained  that while the funding for training                                                            
was included  in the FY 02 budget;  employment funding was  not. She                                                            
voiced uncertainty  as to whether this employment  would result in a                                                            
net increase of  VPSO employees; however, she affirmed  that funding                                                            
for four positions is provided.                                                                                                 
                                                                                                                                
Co-Chair Donley asked whether  the House budget provides funding for                                                            
these VPSO positions.                                                                                                           
                                                                                                                                
Mr. Tangeman  replied  that the  House budget  specifically  reduces                                                            
funding to  the VPSO program  in addition  to funding reductions  in                                                            
the Office  of the Commissioner and  the Division of Administrative                                                             
Services. He noted that  the Department's impact statement specifies                                                            
that this funding  reduction would  result in the elimination  of 23                                                            
trooper positions.                                                                                                              
                                                                                                                                
Senator Austerman  referred the Committee to page  one of the Senate                                                            
subcommittee  report and the recommendation  to restore funding  for                                                            
the VPSO  program eliminated  in the budget  passed by the  House of                                                            
Representatives.                                                                                                                
                                                                                                                                
Senator  Hoffman asked  what items  are included  in the  $2,245,600                                                            
miscellaneous expenses  budget reduction on page three of the Senate                                                            
subcommittee report.                                                                                                            
                                                                                                                                
Mr.  Tangeman   responded  that  this   "Miscellaneous  unallocated                                                             
reduction"  pertains to the "salary  adjustments that were  added in                                                            
the introduction bill."                                                                                                         
                                                                                                                                
Senator  Hoffman   asserted  that   since  the  Commissioner   would                                                            
determine  where the  reductions would  occur,  it could  negatively                                                            
affect the VPSO or Brown Shirts' budget.                                                                                        
                                                                                                                                
Mr. Tangeman responded that it could.                                                                                           
                                                                                                                                
Senator  Hoffman  expressed,   "this  is  a substantial   amount  of                                                            
unallocated reduction."                                                                                                         
                                                                                                                                
Department of Natural Resources                                                                                               
                                                                                                                                
Senator Loren Leman, Chair                                                                                                      
Senator Randy Phillips                                                                                                          
Senator John Torgerson                                                                                                          
Senator Ben Stevens                                                                                                             
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
Senator Leman informed  the Committee of the difficulties of working                                                            
within  the parameters  of  the Senate  Majority  designated  budget                                                            
limitation for this Department,  as the challenges presented by some                                                            
of  the  missions   charged  to  this  Department  are  "daunting";                                                             
particularly  those involving  divisions responsible  for  producing                                                            
revenue from  the State's  natural resources.  He commented  that as                                                            
the availability  of non-general  fund dollars  has decreased,  fund                                                            
shifting  has  become  an  option;  however,  this  option  is  less                                                            
available  than it  has been  in the  past.  He reviewed  the FY  03                                                            
Operating Budget Subcommittee Report as follows.                                                                                
                                                                                                                                
     A $400.9 increase in timber receipt authority to propel value-                                                             
     added processing and continue timber sales in the Interior and                                                             
     Southeast.                                                                                                                 
                                                                                                                                
Senator Leman stated that  these receipts, combined with a federally                                                            
funded hazard  fuels capital improvement  project (CIP) assessment,                                                             
would provide  a funding increase  to forestry management  programs.                                                            
He continued  that  additional  funding has  been  provided, in  the                                                            
subcommittee recommendations,  to the Clean Water  Act, Section 319,                                                            
to support Forestry Practices Act activities.                                                                                   
                                                                                                                                
     A $325.1  GF increase  to address the  Division of Oil  and Gas                                                            
     priorities:  a Royalty Valuation Commercial Analyst,  a Natural                                                            
     Resource  Officer I  for Leasing  (to bring  in $10 million  in                                                            
     deferred  or lost  bonus/rentals),  and a  Petroleum  Reservoir                                                            
     Engineer for reservoir management.                                                                                         
                                                                                                                                
Senator  Leman  stated  that   the  Division  of  Oil  and  Gas  "is                                                            
inadequately  staffed," and that increasing  the number of  staffing                                                            
positions  is  necessary  to prevent  further  leasing  delays  that                                                            
prevent the State from collecting lease monies.                                                                                 
                                                                                                                                
     A fund source  change of $400.0 to the Division  of Oil and Gas                                                            
     from General  Fund to Coastal  Impact Assistance Funds  for the                                                            
     activities  of the  division related  to the  Coastal Plain  of                                                            
     ANWR.                                                                                                                      
                                                                                                                                
Senator   Leman  informed   the  Committee   that  discussions   are                                                            
continuing  with the  Department to  identify  whether this  funding                                                            
source or another funding avenue would be available.                                                                            
                                                                                                                                
     Authorizing  $160.0 GF  for assumption  of the Denali  Block, a                                                            
     mineral   rich   conveyance    requiring   this   funding   for                                                            
     archaeological   work. The  State  estimates  it  will  collect                                                            
     approximately $120.0  in revenues when the conveyance is final.                                                            
                                                                                                                                
Senator Leman  stated that the Denali Block formation  is located on                                                            
the east  end of  the Denali  Highway  near Paxson.  He stated  that                                                            
while this  work was approved in FY  02, shifting priorities  within                                                            
the Department  prevented it from occurring; however,  he noted, the                                                            
subcommittee  has "clearly" identified  this work as a priority  for                                                            
the upcoming year.                                                                                                              
                                                                                                                                
Senator Leman  informed the Committee  the subcommittee recommended                                                             
against funding the requested  Natural Resources Officer II position                                                            
for Shallow  Gas Leasing; however,  he opined that possible  funding                                                            
for  the position  might  be  available  from  statutory  Designated                                                            
Program Receipts.                                                                                                               
                                                                                                                                
     Authorizing  the Natural Resource  Position Classifications  as                                                            
     the  department must  fund the  results  of the classification                                                             
     study. The Subcommittee  has funded this through an unallocated                                                            
     reduction in the Commissioner's  office of $343.2, allowing the                                                            
     department to use the other than GF funds.                                                                                 
                                                                                                                                
     A $530.8  GF/Prgm decrement to  the Division of Parks  $5,850.0                                                            
     budget.                                                                                                                    
                                                                                                                                
Senator  Leman stated  that  to meet  the Senate  Majority's  budget                                                            
amount and  to provide funding  for the Division  of Oil and  Gas, a                                                            
$530,000 reduction in funding  has been proposed for the Division of                                                            
Parks.  He  noted  that  this  decrement   is  half  of  the  amount                                                            
recommended  by the  House of Representatives.  He  stated that  the                                                            
subcommittee supports  funding this program shortfall  with receipt-                                                            
supported services,  however, he stated  that the Legislature  would                                                            
need to address this issue.                                                                                                     
                                                                                                                                
     Supporting RS 2477  Assertions by retaining $40.0/GF and adding                                                            
      $75.0 CIP Rcpts from Land & Water Conservation Grants.                                                                    
                                                                                                                                
Senator Leman  noted that this is  a funding source switch  to allow                                                            
this "navigability  assertions and litigation support  component" to                                                            
move forward.                                                                                                                   
                                                                                                                                
     Establish  a  new  BRU (not  a  new program)  for  the  Natural                                                            
     Resource   Conservation  and  Development  Board   showing  the                                                            
     subcommittee's  support for the work of the Board  and the Soil                                                            
     and Water Conservation Districts.                                                                                          
                                                                                                                                
Senator Leman  stressed that while this is not a new  program, a new                                                            
budget request  item (BRU)  has been established  "to highlight  the                                                            
activities  of  the  Board  and  its  Soil  and Water  Conservation                                                             
Districts."  He  stated that  interagency  receipt  funds,  provided                                                            
through Section  319 of the Clean  Water Act, would provide  for the                                                            
$25,000 increase.                                                                                                               
                                                                                                                                
Senator Leman informed  the Committee that the Governor's request of                                                            
$38.2  million   general  fund  dollars   for  this  Department   is                                                            
approximately  $2.5 million  above the  FY 02  Management Plan,  and                                                            
that the Governor's  All Funds budget  request totals approximately                                                             
$81 million  dollars and includes  992 positions. In comparison,  he                                                            
noted that  the Senate Majority designated  general fund  allocation                                                            
is  $34.1 million  with  an All  Funds  total of  approximately  $78                                                            
million and 941 positions.                                                                                                      
                                                                                                                                
Senator Leman acknowledged  the efforts exerted by: the subcommittee                                                            
members;  Anna  Kim, the  subcommittee's  Fiscal  Analyst;  and  the                                                            
efforts of the  Department staff who worked constructively  with the                                                            
subcommittee   to  "creatively"  develop   a  budget  to   meet  the                                                            
Department's obligations.                                                                                                       
                                                                                                                                
Senator Wilken  asked how  the $400,000 increase  in timber  receipt                                                            
authority  compares   with  the  House  of  Representatives   budget                                                            
recommendations on this subject.                                                                                                
                                                                                                                                
Senator Leman  responded that the  amount established by  the Senate                                                            
Majority  is an increase  over the amount  proposed by the  House of                                                            
Representatives.                                                                                                                
                                                                                                                                
Senator  Wilken  asked how  the FY  03  timber sales  funding  level                                                            
compares to FY  02 funding, as that funding level  caused concern in                                                            
Interior Alaska.                                                                                                                
                                                                                                                                
ANNETTE  KREITZER, Staff  to Senator  Loren Leman,  stated that  the                                                            
subcommittee,  with assistance  from  the Department,  attempted  to                                                            
hold the Division of Forestry's  budget at its prior year's level by                                                            
shifting  funding  sources.  She reported  that  the FY  03  funding                                                            
amount is the same as FY 02.                                                                                                    
                                                                                                                                
Senator Hoffman  noted that the FY 02 Management Plan  totaled $35.7                                                            
million; however  the FY 03 limit  is $34.1 million. He asked  which                                                            
Department  programs,   in  addition  to  the  identified   $500,000                                                            
decrement to the Division  of Parks, would be negatively affected by                                                            
the total $1.6 million shortfall.                                                                                               
                                                                                                                                
Senator Leman  asked Ms. Kreitzer to explain how the  remaining $1.1                                                            
million funding reduction would affect the Department.                                                                          
                                                                                                                                
Ms. Kreitzer confirmed  that the $530,000 decrement  to the Division                                                            
of Parks is a  large portion of the $1.6 million shortfall,  and she                                                            
reminded  the Committee  that the  FY 03 salary  increases would  be                                                            
absorbed  by  the   Department.  She  stressed  that   efforts  were                                                            
undertaken  to locate alternate funding  sources for the  Department                                                            
by such means  as fund shifting. She furthered that  the Division of                                                            
Oil and Gas  and the Department's  administration would absorb  some                                                            
of the shortfall. She stated  that a more detailed breakout could be                                                            
provided.                                                                                                                       
                                                                                                                                
Senator Hoffman  stated that a breakout  would be appreciated,  as a                                                            
$1.1 million general fund  shortfall is a substantial amount for the                                                            
Department to absorb.                                                                                                           
                                                                                                                                
Senator  Leman  clarified  that while  the  budget reflects  a  $1.1                                                            
million general fund shortfall;  the decrease is not indicative that                                                            
program  funding  is being  reduced,  but  rather  that alternative                                                             
funding  sources  have  been  identified  to  replace  general  fund                                                            
allocations.                                                                                                                    
                                                                                                                                
Senator  Hoffman requested  a list detailing  the alternate  funding                                                            
sources that would replace the projected general fund shortfall.                                                                
                                                                                                                                
Senator Leman affirmed that this information would be supplied.                                                                 
                                                                                                                                
Senator Austerman commented  that when comparing the FY 03 budget to                                                            
the FY 02 Management Plan,  it appears that numerous reductions have                                                            
occurred,  such  as  a $338,000  reduction   in the  Office  of  the                                                            
Commissioner's  budget and approximately a million  dollar reduction                                                            
in the Division of Parks budget.                                                                                                
                                                                                                                                
Ms. Kreitzer  responded that the amounts  reflect the actions  taken                                                            
by the  House of Representatives  as she noted,  the House,  not the                                                            
Senate  subcommittee,  reduced  the  Division  of Parks'  budget  by                                                            
approximately one million dollars.                                                                                              
                                                                                                                                
Senator  Austerman echoed  Senator  Hoffman's request  that  further                                                            
information be supplied  to clarify the proposed funding sources for                                                            
Department programs.                                                                                                            
                                                                                                                                
Co-Chair  Donley   stated  that  Senator  Leman  would   supply  the                                                            
requested information.                                                                                                          
                                                                                                                                
Department of Transportation and Public Facilities                                                                            
                                                                                                                                
Senator Jerry Ward, Subcommittee Chair                                                                                          
Senator John Cowdery                                                                                                            
Senator Robin Taylor                                                                                                            
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
LORETTA BROWN,  Staff to Senator Jerry Ward, informed  the Committee                                                            
that the subcommittee recommends  a FY 03 general fund allocation of                                                            
$96,863,700  for   the  Department  of  Transportation   and  Public                                                            
Facilities. She explained  that the subcommittee acted in accordance                                                            
with the Senate Majority budget allocation recommendations.                                                                     
                                                                                                                                
Ms. Brown read from the report as follows.                                                                                      
                                                                                                                                
     A weighted  reduction  in GF was taken  in each component  with                                                            
     the exception  of Highways &  Aviation. A second reduction  was                                                            
     taken   to  distribute   an   unallocated   reduction  in   the                                                            
     Commissioner's Office to each component.                                                                                   
                                                                                                                                
Ms. Brown testified that  the subcommittee focused on allocating the                                                            
general  fund  reductions throughout  the  Department;  however  the                                                            
budget for the Division  of Highways & Aviation remained intact with                                                            
the intent of "protecting  maintenance stations." She continued that                                                            
the subcommittee, in its  recommendation, additionally redistributed                                                            
the unallocated  reduction  resulting from  the general fund  salary                                                            
increases  adjustment,  in the  Office of  the Commissioner  to  the                                                            
actual affected Department components.                                                                                          
                                                                                                                                
     $130.0 was moved from  the Northern Region Highways & Aviation,                                                            
     $30.0  from  Southeast  Highways  &  Aviation  and  $40.0  from                                                            
     Central Region  Highway & Aviation with the intent  to maintain                                                            
     the Willow Maintenance Station.                                                                                            
                                                                                                                                
Ms. Brown stated  that $750,000 in federal receipts  were identified                                                            
in  the  subcommittee  report  for the  Central  Region  Highways  &                                                            
Aviation budget,  specifically for the operation and  maintenance of                                                            
Mitchell Field in Adak.                                                                                                         
                                                                                                                                
     The Subcommittee denied  authority for a $3.9 million increment                                                            
     to  the Alaska  Marine Highway.  The  legislature appropriates                                                             
     money  directly to the  Marine Highway  Stabilization  Fund. If                                                            
     additional  authority  is needed  it can  be done  by the  full                                                            
     committee. Other changes  in authority and funding that did not                                                            
     affect   GF   were   accepted   and   incorporated   into   the                                                            
     Subcommittee's Proposed Operating Budget.                                                                                  
                                                                                                                                
     Fuel and utility cost increments were denied.                                                                              
                                                                                                                                
Ms Brown  explained that  the subcommittee  recommended adoption  of                                                            
the following two structure changes.                                                                                            
                                                                                                                                
     At  the request  of the  City of  Anchorage,  a Traffic  Signal                                                            
     Management  funding component  was added.  Funding for  the new                                                            
     component   was  transferred   from   the  Statewide   Facility                                                            
     Maintenance  and  Operations component  and  received the  same                                                            
     weighted reduction as all other components.                                                                                
                                                                                                                                
     To assure  the spring  road openings it  is recommended  that a                                                            
     funding component  be added for Northern Region  Road Openings.                                                            
     Funding  for  the  new  component   was  transferred  from  the                                                            
     Northern  Region Highways and  Aviation component and  received                                                            
     the same weighted reduction as Highways and Aviation.                                                                      
                                                                                                                                
In  summary,  Ms. Brown  stated  that,  "recommended  reductions  in                                                            
general  fund  expenditures  necessary   to  meet  the Department's                                                             
General Fund allocation  were met. Approving the Department's  other                                                            
requested  changes in  funding and  authorization  brings the  total                                                            
operating budget of All Funds to $345,936,000."                                                                                 
                                                                                                                                
Co-Chair Donley commented  that the goal of providing continued road                                                            
maintenance prompted  the Senate Majority's general  fund allocation                                                            
to be more than  that allocated by the House of Representatives.  He                                                            
asked Senator Ward how the subcommittee addressed this endeavor.                                                                
                                                                                                                                
Senator Ward responded  that the difference between the general fund                                                            
allocation  proposed  by the  Senate  and  the House  was  allocated                                                            
entirely  to   the  highway  maintenance   stations  component.   He                                                            
continued  that while maintenance  stations  would not be funded  at                                                            
the level requested by  the Department, they would be able to remain                                                            
"open and operational."  He noted that the House of  Representatives                                                            
proposal closed  some maintenance stations as a means  to offset the                                                            
Department's unallocated budget cuts.                                                                                           
                                                                                                                                
Senator  Ward commented that  rather than  closing some maintenance                                                             
stations to compensate  for the unallocated general  fund reductions                                                            
specified for  salary increases as the House of Representatives  has                                                            
proposed,  the  Senate  subcommittee  recommended  reallocating  the                                                            
unallocated   reduction  for  salary   increases  to  the   affected                                                            
Divisions.                                                                                                                      
                                                                                                                                
Senator  Hoffman  affirmed  that the  subcommittee  concentrated  on                                                            
providing continuing  road maintenance;  however, he asserted,  road                                                            
maintenance abilities might  be compromised by the lack of a funding                                                            
increment to address increasing fuel costs.                                                                                     
                                                                                                                                
Senator Ward acknowledged  that fuel costs have been  rising, and he                                                            
asserted that  a request for updated fuel cost projections  has been                                                            
submitted to the  Department. He specified that this  issue would be                                                            
presented to the Committee for action.                                                                                          
                                                                                                                                
Senator Austerman  commented that  while the proposed Senate  budget                                                            
is an  increase of  $3,173,000 over  that proposed  by the House  of                                                            
Representatives,  the overall  FY 03 funding  for the Department  is                                                            
approximately $689,000 lower than the FY 02 Management Plan.                                                                    
                                                                                                                                
Co-Chair  Donley clarified  that Senator Austerman  is referring  to                                                            
general funds rather than total funds.                                                                                          
                                                                                                                                
Senator  Austerman specified  that his comments  primarily  focus on                                                            
the $3,173,000 difference  in general funds between the two entities                                                            
as specified  on  page four  of the  subcommittee  report. He  asked                                                            
whether the  $689,000 reduction  from the FY  02 Management  Plan is                                                            
the result of  the subcommittee budget's omission  of such things as                                                            
fuel, labor contracts, and inflation.                                                                                           
                                                                                                                                
Senator  Ward   confirmed  that  the   budget  recommended   by  the                                                            
subcommittee  does not provide  for any increase  in fuel  expenses;                                                            
however, he stated  that the unallocated reduction  is factored into                                                            
the budget.  He continued  that the unallocated  reductions  for pay                                                            
raises  were  removed  from  the  Office  of  the  Commissioner  and                                                            
reallocated to affected  Department components. He stressed that, in                                                            
order for the  subcommittee's budget  to match the specified  Senate                                                            
Majority allocation,  reductions had to be made. He  reiterated that                                                            
the  subcommittee's   priorities  were  to  "not  have  unallocated                                                             
reductions"  and  to  assure  that  road  maintenance   funding  was                                                            
provided.                                                                                                                       
                                                                                                                                
Senator Austerman acknowledged  the subcommittee's efforts; however,                                                            
he insisted that there  is a need to understand how the Department's                                                            
programs would  be affected by the  funding reduction; particularly                                                             
since the increases  in fuel costs  and other inflationary  measures                                                            
would need to be absorbed.                                                                                                      
                                                                                                                                
Senator  Ward agreed  that increasing  fuel costs  are a concern  as                                                            
fuel  costs have  increased  approximately  18 percent  in the  last                                                            
year. He reiterated  that the Department  has been asked  to provide                                                            
updated fuel  costs, which would be  presented to the Committee  for                                                            
action. He affirmed  the impact that this expense  would have on the                                                            
Department's operations.                                                                                                        
                                                                                                                                
Senator  Ward acknowledged  the cooperative  efforts exerted  by the                                                            
Department in working with the subcommittee.                                                                                    
                                                                                                                                
Senator  Olson asked  for  further information  on  the maintenance                                                             
operation funding for the Northern Region Roads Opening.                                                                        
                                                                                                                                
Ms.  Brown  explained   that  the  Northern  Region  Roads   Opening                                                            
component   currently  exists  within   another  component   of  the                                                            
Statewide Facilities  and Maintenance  Program budget; however,  the                                                            
subcommittee  recommends that it be  awarded a stand-alone  BRU, and                                                            
that  the  money  originally  allocated   to  those  activities,  be                                                            
transferred to the new  BRU. She clarified that no funding reduction                                                            
has incurred  other  than the same  weighted  reductions applied  to                                                            
other Department programs.                                                                                                      
                                                                                                                                
Senator  Ward stated  that representatives  of  the Northern  Region                                                            
requested this funding transfer.                                                                                                
                                                                                                                                
Senator Olson thanked the  subcommittee for addressing this concern,                                                            
as some of  the communities in the  region require roads  to be open                                                            
in order to be re-supplied.                                                                                                     
                                                                                                                                
Senator Wilken  asked why the majority  of the funds transferred  to                                                            
the  Willow  Maintenance  Station   are  from  the  Northern  Region                                                            
Highways budget.                                                                                                                
                                                                                                                                
Senator  Ward responded that  the subcommittee  had understood  that                                                            
the  maintenance   station  funding  was  in  place;   however,  the                                                            
Department's  Commissioner, Joe Perkins,  informed the subcommittee                                                             
that $200,000  in additional funding  would be required to  continue                                                            
the  operations of  the  Willow Maintenance  Station.  Senator  Ward                                                            
stated that, at  the request of the subcommittee,  the Commissioner,                                                            
who has voiced dissatisfaction  with the overall level of Department                                                            
funding,  identified the  funding  sources for  the Willow  Station.                                                            
Senator Ward  conveyed that the Commissioner  stated that  the areas                                                            
affected by  the funding reductions  would retain enough  funding to                                                            
provide for "bare bones minimum" operations service.                                                                            
                                                                                                                                
Court System                                                                                                                  
                                                                                                                                
Senator Gary Wilken, Subcommittee Chair                                                                                         
Senator Ben Stevens                                                                                                             
Senator Bettye Davis                                                                                                            
                                                                                                                                
Senator Wilken  informed the Committee that actual  expenditures for                                                            
the Department  amounted to $49,650,000 in FY 00;  $50,500,000 in FY                                                            
01, were specified  at $51,500,000 under the FY 02  Management Plan,                                                            
and that  the Senate Majority  target for  FY 03 is $51,877,000.  He                                                            
stated that the  proposed FY 03 budget is a $646,700  decrease, or a                                                            
1.3 percent  reduction, from  the FY 02 Management  Plan. He  stated                                                            
that  the  budget  is "relatively  simple"  and  consists  of  three                                                            
primary BRUs: the Alaska  Court System BRU with a recommended budget                                                            
of $49,839,000;  the Commission on Judicial Conduct  BRU which would                                                            
be  funded at  slightly  above the  FY 02  level;  and the  Judicial                                                            
Council BRU  which would  be approximately  five percent lower  than                                                            
its FY 02 Management Plan  allocation, according to the subcommittee                                                            
recommendation.  He stated that the subcommittee report  contains an                                                            
unallocated  reduction of  $2,043,000 to the  Court System  BRU that                                                            
the Department would "spread across the BRU."                                                                                   
                                                                                                                                
                                                                                                                                
SFC 02 # 59, Side B 10:32 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator  Wilken continued  that the GF  Maintenance Level  Operating                                                            
Budget  Requirements'   spreadsheet   in  the  subcommittee   report                                                            
identifies the  components of the subcommittee's proposed  budget as                                                            
compared to the  budgets proposed by the Office of  the Governor and                                                            
the  House of  Representatives.  He voiced  two concerns  about  the                                                            
subcommittee budget:  the first being that the mandatory  Retirement                                                            
System   contributions,   referred   to  in   the   report  as   JRS                                                            
Contributions  Rate  Increase,  would need  to  be absorbed  by  the                                                            
Department;  and  secondly,  that  the Felony  Look  Back  provision                                                            
included in  HB 132 and the Therapeutic  Court language included  in                                                            
HB 172,  which were adopted  in FY 02, are  not funded in the  FY 03                                                            
budget recommendation.                                                                                                          
                                                                                                                                
Senator Wilken  commented that regardless  of how simple  the budget                                                            
appears,   it  is   difficult   to   manage  because   it   contains                                                            
approximately 99 percent  general funds. He stated that the proposed                                                            
budget maintains  the staffing  levels currently  funded by  general                                                            
funds, and that there are no bifurcation issues.                                                                                
                                                                                                                                
Senator  Hoffman  asked  for  further  information  about  the  $3.9                                                            
million  specified for  Improved Court  Security  in the  Governor's                                                            
proposed  budget,  but which  is eliminated  in  the subcommittee's                                                             
budget.                                                                                                                         
                                                                                                                                
Senator Wilken  responded  that this initiative  was to provide  for                                                            
improved security across the State.                                                                                             
                                                                                                                                
Senator Hoffman asked whether  this component was included in the FY                                                            
02 budget.                                                                                                                      
                                                                                                                                
Senator  Wilken answered  that  it was  not  included in  the FY  02                                                            
budget.                                                                                                                         
                                                                                                                                
Governor's Office                                                                                                             
                                                                                                                                
Senator Dave Donley, Subcommittee Chair                                                                                         
Senator Pete Kelly                                                                                                              
Senator Rick Halford                                                                                                            
Senator Randy Phillips                                                                                                          
Senator Donny Olson                                                                                                             
                                                                                                                                
Co-Chair Donley  informed the Committee  that the Senate  Majority's                                                            
allocation  for the  Office of  the Governor  budget is $17,741,900                                                             
which is the  same amount adopted  by the House of Representatives.                                                             
He shared  that this  is a three  percent reduction  from the  FY 02                                                            
Management Plan.                                                                                                                
                                                                                                                                
Co-Chair  Donley  highlighted   the incremental   requests  for  the                                                            
Governor's Office  budget that were recommended for  approval by the                                                            
subcommittee,  including: $350,000  in general funds to provide  for                                                            
transitional expenses incurred  by the election of a new governor in                                                            
the upcoming  November 2002  gubernatorial  election; $2,421,000  in                                                            
general funds  for the State's November  general election  expenses;                                                            
and  $80,000 general  funds  for maintenance  of  the State's  Voter                                                            
Registration Election  Management System which supports  the State's                                                            
AccuVote  System.  He  specified   that  the  subcommittee  is  also                                                            
recommending allocation  of $400,000 in contingency  funds; however,                                                            
he  noted  that  this  amount  is slightly  lower  than  the  FY  02                                                            
Management Plan allocation.                                                                                                     
                                                                                                                                
Co-Chair   Donley  stated   that  the  subcommittee   proposes   the                                                            
Governor's  Office  budget  include   an unallocated   reduction  of                                                            
$834,000. He explained  that the Senate budget proposal  matches the                                                            
budget approved  by the House of Representatives with  the exception                                                            
that  the House  of  Representatives'  budget  allocates  a  smaller                                                            
unallocated  reduction  and does  not fund  the maintenance  of  the                                                            
Voter Registration  Election  Management System  or the interactive                                                             
polling website.                                                                                                                
                                                                                                                                
Senator Hoffman asked why  $390,000 specified for the Tribal Affairs                                                            
Office   was  eliminated   from  the  budget   recommended   by  the                                                            
subcommittee.                                                                                                                   
                                                                                                                                
Co-Chair  Donley  clarified  the Tribal  Affairs  Office  item is  a                                                            
request for new funds rather  than an elimination of previous funds.                                                            
He noted that  the Office of the Governor's  request for  the Tribal                                                            
Affairs  Office  proposed  to  transfer  savings  generated  by  the                                                            
elimination of two positions  in the Office of Management and Budget                                                            
to fund this request.                                                                                                           
                                                                                                                                
Senator Hoffman asked for  confirmation that the $390,000 funding in                                                            
question  would be  considered a  "denied increment"  rather than  a                                                            
reduction from last year's budget.                                                                                              
                                                                                                                                
Co-Chair  Donley,  after  a sidebar  with  David  Teal, Legislative                                                             
Fiscal Analyst,  Legislative  Finance Division,  responded,  that is                                                            
correct.                                                                                                                        
                                                                                                                                
LEGISLATURE                                                                                                                   
                                                                                                                                
Senator Dave Donley, Subcommittee Chair                                                                                         
Senator Pete Kelly                                                                                                              
Senator Rick Halford                                                                                                            
Senator John Cowdery                                                                                                            
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
Co-Chair Donley  noted that the Senate  Majority imposed  allocation                                                            
for  the  Legislature  is  $31,112,000,   which  is  a  six  percent                                                            
reduction from  the FY 02 Management  Plan; however, it is  $700,000                                                            
more than  the budget adopted  by the House  of Representatives.  He                                                            
expressed  that this  six  percent reduction  in  the Legislature's                                                             
budget is double  the three percent reduction imposed  on the Office                                                            
of the Governor's budget  and higher than reductions being suggested                                                            
for any other State department.                                                                                                 
                                                                                                                                
Co-Chair  Donley   continued  that   in  addition  to  the   funding                                                            
reduction,   the  Legislature  would   be  absorbing  approximately                                                             
$1,240,000 in fixed-cost  increases resulting from such things as an                                                            
increase  of $4,100 in  national association  dues for the  National                                                            
Conference  of State Legislatures  (NCSL) and  the Council  of State                                                            
Governments  (CSG); a  $17,300 dollar  increase  in rental  expenses                                                            
[Note:  Co-Chair  Donley inadvertently   misstated that  the  rental                                                            
expenses would  increase by $17 million dollars; however  $17,300 is                                                            
the  correct  number  as  identified  in  the written  Subcommittee                                                             
report];  $308,000 in  health premiums,  and  $910,000 increases  in                                                            
salaries  and  per  diems  for  Legislative   and Executive   branch                                                            
employees. He  noted that Legislators' salaries are  not included in                                                            
this  amount, as  Legislators'  salaries have  been  "frozen" for  a                                                            
number  of  years.  He  commented  that  Legislators'  salaries  are                                                            
comparable to a Range 9 State employee pay level.                                                                               
                                                                                                                                
Co-Chair  Donley  informed   the Committee   that  the  Division  of                                                            
Legislative  Budget and Audit (LB&A),  the Legislative Council,  and                                                            
the Ombudsman  Office compile  individual budgets  to submit  to the                                                            
subcommittee.   He  stated  that   upon  review,  the  subcommittee                                                             
recommends the following reductions.                                                                                            
                                                                                                                                
      ($600,000) - delete funding for the Redistricting Board                                                                   
     (under the Legislative Council BRU)                                                                                        
      ($933,600) - reductions to the discretionary funding portions                                                             
     of the Legislative Budget as follows:                                                                                      
           ($100,000) from LB&A Committee Expenses (under the                                                                   
          Budget & Audit BRU)                                                                                                   
           ($75,000) from Session Expenses (under the Legislative                                                               
          Council BRU)                                                                                                          
           ($134,400) from Council & Subcommittees (under the                                                                   
          Legislative Council BRU)                                                                                              
           ($624,200) from the Legislative Operating Budget BRU)                                                                
                                                                                                                                
Co-Chair  Donley   commented  that   funding  is  included   in  the                                                            
subcommittee's   recommendation  to  provide   for  an  increase  of                                                            
$442,700 in Permanent Fund  Dividend (PFD) felon funds for the full-                                                            
year operation of the Office of Victim's Rights.                                                                                
                                                                                                                                
Senator Hoffman  stated that  a section of  the subcommittee  report                                                            
specifies that the Legislative  Council's budget would be reduced by                                                            
$808,000;  however,  this  amount  is not  included  in  the  budget                                                            
reduction listing  that Co-Chair Donley  presented. He asked  for an                                                            
explanation.                                                                                                                    
                                                                                                                                
Co-Chair   Donley  responded   that  the   $808,000  is   "basically                                                            
unallocated reductions"  consisting of portions of requests that the                                                            
subcommittee did not recommend.                                                                                                 
                                                                                                                                
Senator Hoffman  asked the FY 02 level  of funding provided  for the                                                            
Legislative Council.                                                                                                            
                                                                                                                                
Co-Chair Donley commented that the FY 02 budget included some one-                                                              
time expenses, and that the total FY 02 budget for the Legislative                                                              
Council was $23,009,000.                                                                                                        
                                                                                                                                
Senator Hoffman calculated that the FY 03 proposed budget for the                                                               
Legislative Council would be approximately $600,000 less than the                                                               
FY 02 budget.                                                                                                                   
                                                                                                                                
Co-Chair Donley concurred.                                                                                                      
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Dave Donley adjourned the meeting at 10:45 AM                                                                          

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