Legislature(2001 - 2002)

04/19/2002 04:08 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          April 19, 2002                                                                                      
                              4:08 PM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-02 # 72,  Side A                                                                                                            
SFC 02 # 72,  Side B                                                                                                            
SFC 02 # 73,  Side A                                                                                                            
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Dave Donley convened  the meeting at approximately 4:08 PM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Dave Donley, Co-Chair                                                                                                   
Senator Lyda Green                                                                                                              
Senator Gary Wilken                                                                                                             
Senator Alan Austerman                                                                                                          
                                                                                                                                
Also Attending:  JAY LIVELY,  Commissioner, Department of Health and                                                          
Social Services; JANET  CLARKE, Director, Division of Administrative                                                            
Services,   Department  of  Health   and  Social  Services;   REMOND                                                            
HENDERSON,   Director,   Division   of   Administrative    Services,                                                            
Department  of Labor  and Workforce  Development;  BARBARA  RITCHIE,                                                            
Deputy  Attorney General,  Civil Division,  Office  of the  Attorney                                                            
General,  Department  of  Law;  NICO  BUS, Administrative   Services                                                            
Manager, Division  of Support Services,  Department of Military  and                                                            
Veterans Affairs and Department  of Natural Resources; PAT POURCHOT,                                                            
Commissioner,  Department   of Natural  Resources;   GLENN  GODFREY,                                                            
Commissioner,  Department  of  Public Safety;  KURT  PARKAN,  Deputy                                                            
Commissioner,  Department of Transportation  and Public Facilities;                                                             
CHRIS  CHRISTENSEN,  Deputy Administrative  Director,  Alaska  Court                                                            
System;   MIKE  NIZICH,   Administrative   Director,   Division   of                                                            
Administrative Services, Office of the Governor;                                                                                
                                                                                                                                
Attending  via Teleconference:   From Anchorage:  MARLA GREENSTEIN,                                                           
Executive  Director, Alaska  Commission on  Judicial Conduct;  LARRY                                                            
COHN, Executive Director, Alaska Judicial Council                                                                               
                                                                                                                                
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  from  the Department  of  Health  and  Social                                                            
Services,  the Department  of Labor and  Workforce Development,  the                                                            
Department of Law, the  Department of Military and Veterans Affairs,                                                            
the  Department  of Natural  Resources,  the  Department  of  Public                                                            
Safety, the Department  of Transportation and Public Facilities, the                                                            
Alaska Court System,  and the Office of the Governor  on the impacts                                                            
of the budget subcommittees' recommendations.                                                                                   
                                                                                                                                
                                                                                                                                
     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."                                                                             
                                                                                                                                
                                                                                                                                
Department of Health and Social Services                                                                                      
                                                                                                                                
JAY LIVELY, Commissioner,  Department of Health and Social Services,                                                            
testified  that  some  aspects  of  the  budget  "significantly  and                                                            
negatively impact the health and welfare of Alaskans."                                                                          
                                                                                                                                
JANET  CLARKE,  Director,   Division  of  Administrative   Services,                                                            
Department of Health and  Social Services, noted the proposed budget                                                            
contains no funds  for labor cost increases and also  makes a three-                                                            
percent reduction  to administrative service, and  that as a result,                                                            
it would be more difficult to accomplish duties.                                                                                
                                                                                                                                
Ms.  Clarke  pointed  out  the  committee  substitute   contains  no                                                            
unallocated  reduction and compared  this to the "major unallocated                                                             
reduction"  passed by the House of  Representatives. She  also noted                                                            
that many increments are  not funded in the Senate Finance committee                                                            
substitute, specifically  the Governor's request for the Smart Start                                                            
initiative.                                                                                                                     
                                                                                                                                
Ms. Clarke  addressed "cuts  to the base."  She listed a 20  percent                                                            
reduction  of $4.4 million  to alcohol  treatment  grants, and  as a                                                            
result, approximately  1,300 fewer  people would receive  treatment,                                                            
waiting  lists would  be longer  and the  time before  treatment  is                                                            
received would  increase. She spoke  of the "maintenance  of effort"                                                            
required of  this program by the federal  government to qualify  for                                                            
block grant funding. She  explained that with the proposed amount of                                                            
State funding,  the federal block  grant would be reduced  in FY 04,                                                            
and  she  translated  this  into   a reduction   of  the  number  of                                                            
residential  treatment beds  in all locations  except Anchorage  and                                                            
Fairbanks. She added that  the Youth Residential Services program in                                                            
Anchorage would need to be closed as well.                                                                                      
                                                                                                                                
Ms.  Clarke informed  the  Committee of  the Alcohol  Safety  Action                                                            
Program  that helps  the court  system  monitor those  arrested  for                                                            
Driving  Under  the Influence  offenses.  She  stated  the  proposed                                                            
budget  would  reduce funding  for  this  program by  $528,100.  She                                                            
warned  that this  would eliminate  the newly  established  Juvenile                                                            
Alcohol  Safety Action  Program as  well as require  the closure  of                                                            
five of  the eight  grantee offices;  those  located in Dillingham,                                                             
Ketchikan, Kodiak, Mat-Su and Seward.                                                                                           
                                                                                                                                
Ms. Clarke next spoke to  the $289,100 reduction to the base funding                                                            
amount for  the community-based  suicide  prevention program,  which                                                            
would  result  in   19  fewer  communities  receiving   grants.  She                                                            
commented  these grants  amount to  approximately  $15,000 each  and                                                            
that "this  program goes  a long way to  getting, in many  villages,                                                            
counselors in those villages to help in that area."                                                                             
                                                                                                                                
Ms. Clarke expressed concern  about the $2 million funding reduction                                                            
to the Chronic  and Acute Medical  Assistance (CAMA) program,  which                                                            
serves those  who are terminally ill,  or have one of the  following                                                            
diseases:  diabetes,  seizure disorder,  chronic  mental illness  or                                                            
hypertension.  She noted that recipients  of these program  benefits                                                            
have  no other  insurance  coverage  and  also have  monthly  income                                                            
levels no  greater than $300  and no more  than $500 in assets.  She                                                            
informed this program currently  serves over 1,200 Alaskans annually                                                            
and that the proposed funding  amount would allow only 600 people to                                                            
be served in FY 04.                                                                                                             
                                                                                                                                
Ms.  Clarke  then  told of  the  impact  of  the  proposed  $400,000                                                            
reduction  to the  public assistance  field services  office,  which                                                            
would require the elimination  of 17 caseworker positions located in                                                            
Anchorage, Fairbanks, Juneau,  Mat-Su, Kenai and Bethel. She pointed                                                            
out these  caseworkers  assist poor  Alaskans to  become more  self-                                                            
sufficient.                                                                                                                     
                                                                                                                                
Ms. Clarke  reminded  the Committee  that the budget  passed  by the                                                            
House of Representatives  contains  a $7 million unallocated  budget                                                            
reduction  for the Department.  She shared  that the Department  has                                                            
identified methods  to adjust to this reduction, including  changing                                                            
the infant learning  program into a needs based program.  She stated                                                            
that the  budget  subcommittee implemented  many  of the  identified                                                            
methods into its  recommendations.  She stressed that  the change to                                                            
the infant learning  program was proposed as a concept  that has not                                                            
been researched.  Therefore, she advised that actual  implementation                                                            
and  success of  such a  change  is unknown.  She  assured that  the                                                            
Department  "would  make  every effort"  to  implement  the  changes                                                            
successfully.  She  relayed  concerns of  grantees  questioning  the                                                            
feasibility of adapting to the budget reduction.                                                                                
                                                                                                                                
Ms. Clarke listed the approximately  $200,000 reduction to Emergency                                                            
Medical Service (EMS) grants  and described the "critical lifesaving                                                            
volunteer  medical  services"  and  "a lot  of  bang for  the  buck"                                                            
provided by this program.                                                                                                       
                                                                                                                                
Co-Chair Donley  asked the total budget of this program  and whether                                                            
the amount the  witness characterized as a reduction  from the prior                                                            
year is actually a request for additional funds that was denied.                                                                
                                                                                                                                
Ms. Clarke  listed the  total budget  of $1.7 million  in FY  02 and                                                            
stated the  committee substitute appropriates  $200,000 fewer  funds                                                            
for FY 03.                                                                                                                      
                                                                                                                                
Senator  Austerman  asked if  the program  is funded  entirely  with                                                            
general funds.                                                                                                                  
                                                                                                                                
Ms. Clarke responded that  general funds primarily fund the program.                                                            
                                                                                                                                
Ms. Clarke next  addressed tobacco-related programs,  informing that                                                            
the proposed FY 03 budget  does not reduce the FY 02 base funding of                                                            
$2.5  million.  However, she  pointed  out  that the  additional  $4                                                            
million requested  by the Governor  is necessary due to legislation                                                             
passed  the previous  year establishing  the  Tobacco Education  And                                                            
Cessation  Fund. She  explained  this fund  requires the  use of  20                                                            
percent  of  all  settlement  receipts  for  tobacco  education  and                                                            
cessation programs.                                                                                                             
                                                                                                                                
Co-Chair Donley  asked the amount necessary to reach  the 20 percent                                                            
requirement   of   the  Tobacco   Education   and   Cessation   Fund                                                            
legislation.                                                                                                                    
                                                                                                                                
Ms. Clarke answered approximately $2 million.                                                                                   
                                                                                                                                
Ms. Clarke  stated  that the  appropriation proposed  for  Community                                                            
Mental Health  Services is  a $900,000 reduction  to the FY  02 base                                                            
funding amount. She stated  that the Department would be required to                                                            
reduce all  support for  general community  mental health and  limit                                                            
grants to those  with severe emotional disturbance  or those who are                                                            
chronically  mentally   ill,  as these   are  the people   requiring                                                            
immediate  service.  She warned  that state  services  would not  be                                                            
available  to  the  remainder  of people  diagnosed  with  a  mental                                                            
illness, and consequently, early intervention could not occur.                                                                  
                                                                                                                                
Ms. Clarke stressed that  the Division of Family and Youth Services,                                                            
is critical  to  protecting  children from  abuse  and neglect.  She                                                            
noted  the committee  substitute contains  no  reductions to  "front                                                            
line" social workers,  foster care and subsidized  adoption; however                                                            
it proposes  to reduce funding for  family preservation grants.  She                                                            
described  the  prevention   aspects  of  this  program,   including                                                            
assisting   parents,  reunification   activities,   intensive   pre-                                                            
placement services, and  follow-up care for families. She summarized                                                            
that although  no  new increments  are funded,  child protection  is                                                            
funded at the FY 02 level.                                                                                                      
                                                                                                                                
Ms. Clarke listed other  "critical functions" that are funded in the                                                            
committee substitute  at the FY 02 level, including  increased labor                                                            
costs:  juvenile  justice,  epidemiology   services,  public  health                                                            
nursing, developmentally  disabled grants and the Alaska Psychiatric                                                            
Institute.                                                                                                                      
                                                                                                                                
Senator Wilken asked if  the entire amount of EMS Grants is utilized                                                            
for  equipment purchases  or  whether any  portion  is utilized  for                                                            
staff expenditures.                                                                                                             
                                                                                                                                
Ms. Clarke  replied that  most of  the funds are  used for  training                                                            
activities.  She noted  none  of the grant  funding  is expended  on                                                            
equipment.                                                                                                                      
                                                                                                                                
Mr. Livey added  that volunteers primarily operate  this program and                                                            
that this program provides  training for search and rescue teams and                                                            
fire fighters throughout the State.                                                                                             
                                                                                                                                
Senator  Wilken  indicated  his  priority  is  to  obtain  the  best                                                            
equipment possible for this program.                                                                                            
                                                                                                                                
Senator  Wilken  referenced  a  letter  addressed  to him  from  the                                                            
Fairbanks North  Star Borough [copy not provided]  regarding changes                                                            
to  the  Community   Matching  Grant   Program.  He  asked   for  an                                                            
explanation of said changes.                                                                                                    
                                                                                                                                
Ms. Clarke  affirmed the  committee substitute  proposes changes  to                                                            
the Community  Matching  Grant Program,  which is  a "pass  through"                                                            
program  to   Anchorage  and  Fairbanks.   She  informed   that  the                                                            
unallocated  budget reduction  contained in  the budget approved  by                                                            
the  House  of Representatives  included  the  elimination  of  this                                                            
program. She said  the initial recommendation of the  Senate Finance                                                            
budget  subcommittee  was to  retain the  program but  reduce it  50                                                            
percent. She noted  that after hearing the concern  of the Fairbanks                                                            
North Star Borough,  the subcommittee's final recommendation  was to                                                            
reduce  funding for  the program  by  25 percent,  or approximately                                                             
$425,000 from FY 02.                                                                                                            
                                                                                                                                
Senator  Wilken asked  if the  reduction  to this  program would  be                                                            
"spread equally across all programs".                                                                                           
                                                                                                                                
Ms.  Clarke emphasized  this  program  only  provides  funds to  the                                                            
Municipality of Anchorage and the Fairbanks North Star Borough.                                                                 
                                                                                                                                
Senator Green  pointed out  that since the  subcommittee report  was                                                            
submitted, legislative  staff and representatives  of the Department                                                            
have been  making efforts  to secure alternate  funding for  the EMS                                                            
Grants program.                                                                                                                 
                                                                                                                                
Senator  Olson cited  the  Department's  impact statement  [copy  on                                                            
file], noting the elimination  of funding for alcohol and drug abuse                                                            
residential  treatment programs  in all  locations except  Anchorage                                                            
and Fairbanks.  He asked why the Anchorage  and Fairbanks  locations                                                            
were "preserved".                                                                                                               
                                                                                                                                
Ms. Clarke  understood  the decision  was based  upon the number  of                                                            
people  served,  the size  of the  urban  programs along  with  "the                                                            
belief  that they could  cover the  rest of the  State". She  stated                                                            
that it was determined  "this was the best of a very bad situation -                                                            
retrenchment into those large communities."                                                                                     
                                                                                                                                
Senator Olson  asked the  number of treatment  center programs  that                                                            
would be eliminated.                                                                                                            
                                                                                                                                
Ms. Clarke replied that she would provide that information.                                                                     
                                                                                                                                
Department of Labor and Workforce Development                                                                                 
                                                                                                                                
REMOND HENDERSON,  Director,  Division of  Administrative  Services,                                                            
Department   of  Labor  and  Workforce   Development,  thanked   the                                                            
Committee for passing SB  262, which establishes the building safety                                                            
fund. He  noted this proposed  budget does  not provide funding  for                                                            
inspectors  although   the  other  legislation  provides   necessary                                                            
funding for these positions.                                                                                                    
                                                                                                                                
Senator  Olson asked  the  consequences of  failing  to inspect  the                                                            
boilers.                                                                                                                        
                                                                                                                                
Mr. Henderson replied it  is a matter of safety of the 6,000 boilers                                                            
that must be  inspected and could  possibly explode if not  properly                                                            
maintained.                                                                                                                     
                                                                                                                                
Senator   Olson  asked  the   locations  of   the  boilers   needing                                                            
inspection.                                                                                                                     
                                                                                                                                
Mr. Henderson noted distribution  is statewide. He listed the number                                                            
of uninspected boilers in various communities.                                                                                  
                                                                                                                                
Department of Law                                                                                                             
                                                                                                                                
BARBARA RITCHIE, Deputy  Attorney General, Civil Division, Office of                                                            
the  Attorney  General,   Department  of  Law  testified   that  the                                                            
committee substitute  proposes a budget  for the Department  that is                                                            
approximately  $2.5 million  less than the  amount requested  in the                                                            
Governor's  budget and approximately  $1.6 million less than  the FY                                                            
02 appropriation. She stated  that the committee substitute contains                                                            
a $983,000  budget reduction  and does not  appropriate $680,000  to                                                            
fund  increased   labor  expenses   and  position  reclassification                                                             
expenses  or the  $531,700 necessary  to implement  recently  passed                                                            
crime-related legislation.                                                                                                      
                                                                                                                                
Ms.  Ritchie  spoke  to  the  difficulty   in  determining  how  the                                                            
"reductions of this magnitude"  would be absorbed. She asserted that                                                            
although  the  budget  subcommittee  attempted  to  assist  in  this                                                            
endeavor, "there  aren't any really  good choices here" and  impacts                                                            
would be experienced.                                                                                                           
                                                                                                                                
Ms.  Ritchie  informed  the Committee  that  the  directed  $250,000                                                            
reduction to  the Civil Division and  could require the elimination                                                             
of two attorney  positions, or one attorney position,  one paralegal                                                            
and support  staff  positions. She  characterized  this Division  as                                                            
having "the largest  grouping of general fund activities,"  in which                                                            
the  Department  is "loathe  to  reduce"  as those  activities  have                                                            
direct impact  on the health  and safety  of Alaskans, particularly                                                             
children.                                                                                                                       
                                                                                                                                
Ms. Ritchie  noted the denial  of funding  for the Balloon  Project,                                                            
relating to child protection,  warning that this would result in the                                                            
elimination of one attorney  position dedicated to this project. She                                                            
explained  these funds are  received from  the Department of  Health                                                            
and Social Services as a reimbursable services agreement (RSA).                                                                 
                                                                                                                                
Senator  Green clarified  that the budget  subcommittee recommended                                                             
the Committee restore almost  all funding not provided in the budget                                                            
passed by the House of Representatives.                                                                                         
                                                                                                                                
Ms. Ritchie  stated  this is  a "preferred  scenario"  and that  one                                                            
attorney position  could be retained  for the Balloon Project,  thus                                                            
necessitating the loss of one-half attorney position.                                                                           
                                                                                                                                
Ms. Ritchie continued that  legal services for natural resources and                                                            
fish and  game efforts  would be  reduced, given  the dependence  on                                                            
general funds for these activities.                                                                                             
                                                                                                                                
Ms.  Ritchie pointed  out  that almost  all  work conducted  by  the                                                            
Department  is "incoming".  She  explained  that the  Department  is                                                            
defending the  State against lawsuits, prosecuting  those who commit                                                            
crime  or protecting  children.  She  stressed  the  Department  has                                                            
little control  over the  amount of legal  work produced and  stated                                                            
this  is  the  reason  it  would  be  difficult   to  determine  how                                                            
reductions would be made.                                                                                                       
                                                                                                                                
Ms.  Ritchie  spoke  to  the  $250,000  proposed  reduction  to  the                                                            
Criminal  Division. She noted  this would result  in a reduction  of                                                            
the number  of prosecuting  attorneys and  support staff  positions;                                                            
stressing  this  is  the only  option  as  over  70 percent  of  the                                                            
Division's  budget is for personnel.   She stated that the  position                                                            
reductions would be made  in the largest of the 14 district attorney                                                            
offices in the State, likely  those offices located in Anchorage and                                                            
Fairbanks.  She noted that the local  Fairbanks government  recently                                                            
repealed ordinances  relating to domestic violence  and as a result,                                                            
this workload is transferred to the State.                                                                                      
                                                                                                                                
Ms. Ritchie next  addressed the reduction of $442,500  general funds                                                            
to Oil and  Gas Litigation programs.  She commented that  the budget                                                            
for these activities  have been reduced  "pretty dramatically"  over                                                            
the past  several years,  although the Department  has been  able to                                                            
adjust to the  reductions because many of the major  cases have been                                                            
resolved.  However,  she  advised   that  gasoline  issues  must  be                                                            
addressed in the  upcoming year.  She noted the Department  has more                                                            
control over  the workload in this  area in that it could  determine                                                            
whether  to  pursue  cases  but  she  stressed   the  importance  of                                                            
undertaking cases to obtain tax revenue, etc.                                                                                   
                                                                                                                                
Ms.  Ritchie then  detailed  the  fiscal  notes of  recently  passed                                                            
legislation  that  were  not funded  in  the  committee substitute,                                                             
including the  collection of victim  restitution. She described  the                                                            
program  whereby  the Collections   Section of  the  Civil  Division                                                            
undertakes these activities  and noted the Section is ideal for this                                                            
as  it  currently  conducts   other  collection  efforts   utilizing                                                            
paralegals  and  administrative  support  staff. She  informed  that                                                            
judgments  are being received  under this  operation, but  cautioned                                                            
that  without  the remainder  of  the $106,000  requested  for  this                                                            
purpose, the Section  would have an insufficient number  of staff to                                                            
undertake  the  collection  of  approximately  5,000  court-ordered                                                             
judgments annually.                                                                                                             
                                                                                                                                
Co-Chair Donley  referenced testimony  heard from other states  that                                                            
contract collections  to private entities  with success rates  of up                                                            
to 70 percent.  He asked why the success rate is only  30 percent in                                                            
Alaska, given  the existence of the  Alaska Permanent Fund  Dividend                                                            
(PFD) program.                                                                                                                  
                                                                                                                                
Ms. Ritchie questioned  the accuracy of the 30 percent  success rate                                                            
information, as  she understood the efforts to be  considerably more                                                            
successful. She told of  the collection of almost $400,000 primarily                                                            
through  permanent  fund  dividend  garnishments.  She  relayed  the                                                            
negative  experience  of  a  previous  attempt   to  contract  other                                                            
collection activities  to an outside entity, in which  the State had                                                            
to terminate  the contract.  She offered to  research the matter  of                                                            
contracting versus in-house operation of collection activities.                                                                 
                                                                                                                                
Ms. Ritchie spoke  to newly adopted legislation relating  to Driving                                                            
While  Intoxicated  (DWI) offenses  and  therapeutic  courts,  which                                                            
require  funding  to implement.  She  reminded  of the  fiscal  note                                                            
request  for  an  additional  attorney   position  in  the  Criminal                                                            
Division to  enforce the DWI legislation  and pointed out  that this                                                            
increment   was  not  funded  in   the  committee  substitute.   She                                                            
questioned  the ability  to  meet the  "public expectation"  of  the                                                            
"level of prosecution"  without adequate funding. She also noted the                                                            
additional  attorney  position  requested  in  the  fiscal  note  to                                                            
implement  the therapeutic  courts legislation  was not funded.  She                                                            
described the  importance of this program to rehabilitate  offenders                                                            
and the  efficiency of utilizing  an attorney  rather than  a judge,                                                            
who  could  then  focus  on  other  court   matters  such  as  child                                                            
protection.                                                                                                                     
                                                                                                                                
Ms. Ritchie  informed the  Committee that  the Fairbanks  Courthouse                                                            
would close  on July  1, 2002  and the State's  district  attorney's                                                            
office  in that  city must  be  relocated. She  said  a request  for                                                            
proposals (RFP) has been  issued to secure a new facility and that a                                                            
$100,000 to $200,000 impact is expected.                                                                                        
                                                                                                                                
Ms.  Ritchie  stated  that  the  approximate  $500,000  unallocated                                                             
reduction to the Office  of the Attorney General for unfounded labor                                                            
cost  increases  would  make  it difficult  for  the  Department  to                                                            
fulfill  the obligations  described  in  its Missions  Statement  to                                                            
represent the  State in litigations  and in prosecuting crimes.  She                                                            
stated  that  a  significant  portion  of  the  reduction  could  be                                                            
allocated to  Oil and Gas Litigation  activities, as the  Department                                                            
has  greater  control  over  the  workload  in  this  area  than  in                                                            
prosecution of  crimes. She also predicted a greater  backlog in all                                                            
cases. She  expressed that  efforts would be  made to adjust  to the                                                            
budget reduction  in a manner  that would  have the least impact  to                                                            
the health and safety of Alaskans.                                                                                              
                                                                                                                                
Senator Olson  asked for a comparison  of the level of service  this                                                            
budget would allow to the  level of service the Department currently                                                            
provides.                                                                                                                       
                                                                                                                                
Ms. Ritchie  answered that  71 percent of  the Department budget  is                                                            
utilized for personnel  expenses and that the budget reduction would                                                            
result  in  the elimination   of some  positions.  She  stated  that                                                            
service would be reduced  to natural resource related areas and that                                                            
other departments  would receive less legal council.  She also noted                                                            
that prosecution  of criminal  offenders would  be reduced  in urban                                                            
areas. She  stressed that funding  to address child abuse  and child                                                            
neglect would  not be reduced, as  these functions are critical  and                                                            
already "overburdened".                                                                                                         
                                                                                                                                
Senator  Olson  was  troubled  by  the  recently  repealed  domestic                                                            
violence ordinances  of the Fairbanks  North Star Borough  and asked                                                            
how this would impact the Department.                                                                                           
                                                                                                                                
Ms. Ritchie  described the  screening process  of determining  which                                                            
cases would  be brought to trial.  She predicted delays could  occur                                                            
and that  less attention  would be devoted  to each case because  of                                                            
limited staff.                                                                                                                  
                                                                                                                                
Senator  Olson   next  asked  how   the  therapeutic  courts   would                                                            
specifically  deal with "those  criminals  whose problem stems  from                                                            
alcoholism".                                                                                                                    
                                                                                                                                
Ms. Ritchie  was unsure. She stressed  the program is very  resource                                                            
intensive  and involves  a different  court system.  She stated  the                                                            
intent  is to determine  whether  this process  would reduce  repeat                                                            
alcohol  and drug related  offenses.  She warned  that by not  fully                                                            
funding the program, the results would be indeterminate.                                                                        
                                                                                                                                
Senator  Olson asked the  proposed funding  amount would  jeopardize                                                            
the Therapeutic  Courts  program and  "the success  we've seen  thus                                                            
far."                                                                                                                           
                                                                                                                                
Ms. Ritchie  replied not necessarily,  although it would  impact the                                                            
Department's ability to fully participate.                                                                                      
                                                                                                                                
Department of Military and Veterans Affairs                                                                                   
                                                                                                                                
NICO  BUS, Administrative   Services Manager,  Division  of  Support                                                            
Services,   Department  of   Military  and   Veterans  Affairs   and                                                            
Department  of Natural Resources,  testified that the Department  of                                                            
Military and Veterans  Affairs has determined the  proposed $640,000                                                            
budget  reduction  would  be  taken in  the  Alaska  Military  Youth                                                            
Academy. He stated this  would be done with the anticipation that HB                                                            
312 would  pass and  that general  funds for this  program would  be                                                            
replaced with inter-agency receipts (I/A Receipts).                                                                             
                                                                                                                                
Mr. Bus stated  that otherwise the proposed FY 04  funding is status                                                            
quo, with the exception  of increased actuarial costs of $442,000 in                                                            
retirement  and  benefits  due  to poor  performance  of  the  stock                                                            
market.                                                                                                                         
                                                                                                                                
Co-Chair Donley asked for an explanation of HB 312.                                                                             
                                                                                                                                
Mr. Bus explained  the legislation would fund the  operations of the                                                            
Alaska  Military Youth  Academy similar  to a  school, by  providing                                                            
funding  based on  each  student or  cadet.  He exerted  this  would                                                            
provide  a  stable  funding  source  for  the  Academy  and  as  the                                                            
population  of  students  increases  and decreases,  the  amount  of                                                            
funding would as well.  He noted the program was initially federally                                                            
funded  as a  pilot  program and  that  the State  contribution  has                                                            
increased to the current 40 percent funding.                                                                                    
                                                                                                                                
Senator Wilken  clarified HB 312 "stops the transition  from the old                                                            
formula  to new  foundation  formula"  as  it relates  to  education                                                            
funding  and  noted  that the  Alaska  Military  Youth  Academy  was                                                            
included in a committee substitute.                                                                                             
                                                                                                                                
Senator Olson  asked how many fewer students would  be accepted into                                                            
the program.                                                                                                                    
                                                                                                                                
                                                                                                                                
SFC 02 # 72, Side B 04:55 PM                                                                                                    
                                                                                                                                
                                                                                                                                
Mr.  Bus stated  if  the  alternate  funds were  not  received,  the                                                            
Department  would no  longer  qualify for  a federal  grant and  the                                                            
entire program could be eliminated.                                                                                             
                                                                                                                                
Senator Olson asked the total budget of the academy program.                                                                    
                                                                                                                                
Mr. Bus answered  the federal grant  is $3.5 million, of  which $2.1                                                            
million is  provided by the federal  government and $1.4  million is                                                            
State general funds.                                                                                                            
                                                                                                                                
Co-Chair Donley asked if  the stipends paid to students is a federal                                                            
grant requirement.                                                                                                              
                                                                                                                                
Mr. Bus  replied that stipends  are a federal  requirement  and that                                                            
other states address the matter differently.                                                                                    
                                                                                                                                
Mr. Bus detailed the three  stages of the academy program, including                                                            
the  final stage  after  graduation  whereby  graduates  are paid  a                                                            
stipend  up to  12 months  if they continue  to  participate in  the                                                            
program. He  explained the post graduation  requirements  of meeting                                                            
with  mentors  and staying  in  school  and noted  this  allows  the                                                            
success  of the  program  to be  monitored.  He qualified  that  the                                                            
federal government could  not mandate the stipend payments, although                                                            
it "strongly  encourages"  stipends through  it's grant program.  He                                                            
relayed  that  the   federal  government  has  indicated   that  not                                                            
providing the  stipends could result  in loss of the grants  because                                                            
other states are willing to offer the stipends.                                                                                 
                                                                                                                                
Mr. Bus informed  that many graduates  of the youth academy  utilize                                                            
the stipend payments to enroll in secondary education programs.                                                                 
                                                                                                                                
Senator Ward asked  if any states receive the federal  grants but do                                                            
not pay stipends to graduates.                                                                                                  
                                                                                                                                
Mr.  Bus replied  that  most  states  do pay  stipends  although  "a                                                            
couple" do not. He stated he would provide further information.                                                                 
                                                                                                                                
Senator Olson  asked if the Department's  level of service  would be                                                            
reduced if the proposed budget were passed.                                                                                     
                                                                                                                                
Mr.  Bus responded  that  if  the  Department  did not  receive  the                                                            
$654,000   in  alternate   funding,  the   youth  academy   must  be                                                            
eliminated.                                                                                                                     
                                                                                                                                
Department of Natural Resources                                                                                               
                                                                                                                                
PAT  POURCHOT,  Commissioner,   Department  of  Natural   Resources,                                                            
testified  that the budget  subcommittee allowed  the Department  to                                                            
provide  input in  determining  ways to  accommodate  for the  "very                                                            
problematic"  budget restriction.  He was particularly appreciative                                                             
of the  subcommittee's accommodation  in oil  and gas activities  as                                                            
well as with a mining project located in the Denali "block".                                                                    
                                                                                                                                
Mr. Pourchot  referenced both a 16  page impact statement  and a two                                                            
page  summary [available  on  the Office  of Management  and  Budget                                                            
website] but expressed  his testimony would focus only on two items.                                                            
The first  item he listed  as a $400,000 fund  source change  to the                                                            
Division  of Oil  and Gas  from  general funds  to  a federal  grant                                                            
called the  Community Impact  Assistance Program.  He described  the                                                            
grant  program  whereby  federal   funds  are  appropriated  to  the                                                            
Division  of  Governmental   Coordination  in  the   Office  of  the                                                            
Governor. He informed  that the Department of Natural  Resources had                                                            
been unfamiliar  with  this program  and upon  review, is  concerned                                                            
that the funds are "one  time monies". He warned that if these funds                                                            
were  utilized  for  FY  03,  "serious  problems"  could  occur  the                                                            
following  fiscal  year  if  funds were  not  appropriated  for  the                                                            
Division of  Oil and Gas. In addition,  he noted that approximately                                                             
$12  million  in requests  have  been  submitted  although  only  $2                                                            
million  is  available.    He  furthered  that  the  federal  public                                                            
involvement  process for developing  a plan have been completed  and                                                            
approved  by  the US  Secretary  of  Commerce.  He stated  that  any                                                            
amendments to  the plan would require additional public  involvement                                                            
and reapproval.  He was  unsure the outcome of such review, although                                                            
stressed that significant time would be required.                                                                               
                                                                                                                                
Mr. Pourchot  next addressed  proposed ten-percent  general  funding                                                            
reduction  of $530,000  to the  Division  of Parks.  He warned  this                                                            
would result  in the closure of approximately  21 park units  across                                                            
the  State.  He  shared that  an  analysis  has  been  conducted  to                                                            
determine  which  parks  generate   the  most  revenue,  as  program                                                            
receipts   are  utilized   for  operation   expenses,  as   well  as                                                            
identifying  the  parks  with  heavier  usage  and  the maintenance                                                             
expenses  of each park.   He surmised  that such  a large number  of                                                            
park closures  would be unacceptable  for the  public. He relayed  a                                                            
recommendation   of  the  subcommittee   to  introduce  legislation                                                             
allowing  receipt supported  services of park  revenue to allow  the                                                            
expenditure  of  the  approximately   $2  million  in  receipts.  He                                                            
predicted  this would  fully  fund the  park operations  plus  other                                                            
Department activities.                                                                                                          
                                                                                                                                
Senator  Wilken  referenced  correspondence   relating  to  forestry                                                            
projects in Interior Alaska  [copies not provided] and asked how the                                                            
proposed budget would impact these projects.                                                                                    
                                                                                                                                
Mr. Pourchot  reminded that the House  of Representatives  adopted a                                                            
budget  that contains  reductions  that  "would  definitely  affect"                                                            
timber harvesting  projects,  especially those  located in  Interior                                                            
Alaska.  He assured  that the  Senate Finance  committee  substitute                                                            
does not contain any specific  general fund reductions to the timber                                                            
harvesting  projects;  however,  close  attention  must be  paid  to                                                            
maximize  timber generated  revenue  to enable  utilization of  non-                                                            
general  fund  receipts  for additional  projects.  He  stated  that                                                            
Southeast Alaska,  with its bigger  trees and denser timber  growths                                                            
is likely  to generate  higher revenue  than in  other areas  of the                                                            
State,  such as  in Interior  Alaska. He  added  that less  emphasis                                                            
would be made on value  added local processing, which generates less                                                            
income for  the State than the export  of raw materials.  He assured                                                            
the Department  still intents to maintain  a "credible" value  added                                                            
program.                                                                                                                        
                                                                                                                                
Senator Austerman  asked the number of employees in  the Division of                                                            
Oil and Gas.                                                                                                                    
                                                                                                                                
Mr. Pourchot answered  approximately 60 to 65 positions  are located                                                            
in the Division.                                                                                                                
                                                                                                                                
Senator Austerman  cited the impact  statement summary stating  that                                                            
employees would  be laid off if the $400,000 were  not received.  He                                                            
asked the number of employees that would be laid off.                                                                           
                                                                                                                                
Mr. Pourchot  responded that  because the  salaries of employees  of                                                            
the Division  of Parks are significantly  less than the Division  of                                                            
Oil and Gas, fewer employees  would be laid off from the Division of                                                            
Oil and  Gas. He  estimated  that four  or five  personnel would  be                                                            
eliminated  from the Division of Oil  and Gas if the aforementioned                                                             
$400,000 were not provided.                                                                                                     
                                                                                                                                
Senator  Austerman next  referenced  the proposed  reduction to  the                                                            
Division of  Parks is equal to ten  percent of the general  funds to                                                            
the parks program.  He asked the amount of fee increases  that would                                                            
be necessary to replace the lost appropriation.                                                                                 
                                                                                                                                
Mr. Pourchot replied  the Division currently receives  approximately                                                            
$2 million  of the  total $5,5  million Division  budget in  program                                                            
receipts, including  day use fees,  campground fees and boat  launch                                                            
fees as well as  some concessionaire contracts. He  informed that in                                                            
January  2002  fees for  day  use,  season passes  and  boat  launch                                                            
permits  were increased,  resulting  in  complaints  from users  and                                                            
legislators.  He surmised the current  fees are "pushing  the limit"                                                            
in "what Alaskans  expect to pay for  access to their pubic  parks."                                                            
                                                                                                                                
Senator  Austerman clarified  that  in the  21 parks  that would  be                                                            
closed, the lands would  remain available for use although the parks                                                            
and facilities would not be maintained or staffed.                                                                              
                                                                                                                                
Mr.  Pourchot   responded  that  the   identified  parks   would  be                                                            
"physically  barricaded"  with  the  "hope" that  people  would  not                                                            
continue  to use the parks.  He stressed there  would be no  garbage                                                            
service,  septic  pump operation  or  management  of the  units.  He                                                            
admitted people  might still utilize  the parks, but expressed  that                                                            
such  use  would  "create  other  problems"   with  other  financial                                                            
implications.                                                                                                                   
                                                                                                                                
Senator Austerman agreed  that the closure of 21 parks "would not be                                                            
good"  and he hoped  the  parks would  not be  misused. However,  he                                                            
emphasized  the parks  are State land  and would  be accessible  for                                                            
use.                                                                                                                            
                                                                                                                                
Mr. Pourchot  clarified that  the parks would  remain available  for                                                            
"non developed  recreational use" but that park facilities  would be                                                            
barricaded.                                                                                                                     
                                                                                                                                
Senator Olson  asked how the Department would determine  which parks                                                            
would be closed                                                                                                                 
                                                                                                                                
Mr. Pourchot  stated  the Department  determined  that the  closures                                                            
should be distributed statewide.  He detailed the review of the cost                                                            
of managing  each  unit, noting  that  some remotely  located  parks                                                            
incur  higher transportation  costs.  He also noted  that the  parks                                                            
that generate  significant  revenue would not  be closed as  well as                                                            
those parks  with high use  patterns. He  qualified that most  State                                                            
parks receive considerable use.                                                                                                 
                                                                                                                                
Senator  Olson wanted  to know  how the proposed  budget  reductions                                                            
would affect the level of service compared to the FY 02 budget.                                                                 
                                                                                                                                
Mr. Pourchot  answered that the Governor's  proposed budget  for the                                                            
Division  of  Parks  includes  a  "modest  increment"  necessary  to                                                            
maintain  the  level  of  service  the  public   is  accustomed  to.                                                            
Therefore,  he stated that the Senate  Finance committee  substitute                                                            
would result in significant less service.                                                                                       
                                                                                                                                
Senator Wilken asked if more or less timber sales would occur.                                                                  
                                                                                                                                
Mr.  Pourchot replied  that  most  of the  planned timber  sales  in                                                            
Interior Alaska would proceed  as planned. He noted that a few sales                                                            
could  be  deferred  or superceded  by  timber  sales  in  Southeast                                                            
Alaska, due to the higher revenue possible for those sales.                                                                     
                                                                                                                                
Senator  Ward asked  the number  of parks  that would  close if  the                                                            
committee  substitute were  passed and the  legislation relating  to                                                            
funding  park  operations  with  receipt  supported   services  also                                                            
passed.                                                                                                                         
                                                                                                                                
Mr. Pourchot  answered that no parks  would be closed, although  the                                                            
legislation he earlier mentioned has not been introduced.                                                                       
                                                                                                                                
Co-Chair Donley asked the  ratio of supervisors to "line workers" in                                                            
the Department.                                                                                                                 
                                                                                                                                
Mr.  Pourchot  was  unsure  but  noted  that   divisions  have  been                                                            
consolidated and subsequently  management at upper and middle levels                                                            
have  been "collapsed"  over  the past  several years.  He gave  the                                                            
formally separate  Divisions of Mining,  Water and Lands  as well as                                                            
the  position  held by  Nico  Bus  with the  Department  of  Natural                                                            
Resources  and the Department  of Military  and Veterans Affairs  as                                                            
examples.                                                                                                                       
                                                                                                                                
Co-Chair  Donley requested  the number of  employees covered  by the                                                            
General  Government   Unit  (GGU)   versus  those  covered   by  the                                                            
Supervisors Unit.                                                                                                               
                                                                                                                                
Mr. Bus stated he would supply that information.                                                                                
                                                                                                                                
Department of Public Safety                                                                                                   
                                                                                                                                
GLENN GODFREY, Commissioner,  Department of Public Safety, noted the                                                            
budget proposed  in the Senate committee  substitute is almost  $1.8                                                            
million   higher  than  the   amount  approved   by  the  House   of                                                            
Representatives;  however,  it  would still  negatively  impact  the                                                            
Department  and  result  in  reductions   of  up  to  47  positions,                                                            
including  at least 17 trooper  positions and  19 seasonal  fish and                                                            
wildlife protection aides  statewide. He stated that the Division of                                                            
Fish and  Wildlife  Protection would  be required  to terminate  its                                                            
seasonal fish and wildlife aide program.                                                                                        
                                                                                                                                
Mr. Godfrey informed that  an additional $3.3 million is required to                                                            
maintain  the FY 02 level  of service in FY  03. He noted  this does                                                            
not include  increments  for additional  child abuse investigations                                                             
and other programs recommended by the public.                                                                                   
                                                                                                                                
Mr. Godfrey  expressed that  the proposed  $1.7 million unallocated                                                             
reduction to the  Office of the Commissioner would  "have a definite                                                            
impact  on public  safety services  across the  State." He  recalled                                                            
that over the  past several years the Department has  eliminated mid                                                            
level  and  upper level  managers,  particularly  in  the  uniformed                                                            
divisions.  He informed  that the  Department  attempts to  maximize                                                            
field positions  and minimize administrative  support positions.  He                                                            
stated  that no  programs within  the Department  would  be able  to                                                            
absorb  the unallocated  reduction  "of this  magnitude". He  warned                                                            
that because the Division  of Alaska State Troopers and the Division                                                            
of  Fish  and  Wildlife  Protection  represent  the  largest  budget                                                            
components,  these divisions would  "shoulder the majority  of these                                                            
cuts." He furthered  that other programs, including  the Division of                                                            
Fire Protection  would be negatively impacted as well.  He testified                                                            
that field  positions would be reassigned  to perform the  necessary                                                            
administrative  functions,  as the proposed  budget would  "cripple"                                                            
the centralized administration.                                                                                                 
                                                                                                                                
Mr. Godfrey  pointed out that $960,000  is necessary to accommodate                                                             
for fixed cost  increases for general funded support  services, such                                                            
as  fuel  cost  increases,   emergency  guard  hires   and  prisoner                                                            
transport  expenses,  increased  costs  for  forensic  examinations                                                             
associated  with  sexual  assaults  and  increased  trooper  housing                                                            
expenses.                                                                                                                       
                                                                                                                                
Mr. Godfrey  informed that Alaska  is "already well below,  by about                                                            
half" the national  average of the ratio of troopers  to population.                                                            
He noted this  does not take geographical areas into  consideration.                                                            
He stressed  that recently  passed legislation  along with  proposed                                                            
legislation,  such as HB  4 relating to  drunken driving  penalties,                                                            
would be less effective without adequate law enforcement.                                                                       
                                                                                                                                
Mr. Godfrey shared  the terrorist events of September  11, 2001 have                                                            
affected all  states and have resulted  in additional public  safety                                                            
responsibilities.  He  listed the  Alyeska  Pipeline  as a  facility                                                            
requiring  the  protection  of the  Department.  He  stressed  these                                                            
additional  responsibilities   are difficult  to  assume  given  the                                                            
current resources.  He stated that  the available funding  should be                                                            
increased rather than decreased.                                                                                                
                                                                                                                                
Mr. Godfrey expressed intent  to continue efforts to obtain adequate                                                            
funding to provide public safety at the current level.                                                                          
                                                                                                                                
Senator Olson  asked the level of service that would  be provided in                                                            
rural Alaska in FY 03.                                                                                                          
                                                                                                                                
Mr.  Godfrey answered  that  currently  response time  to  incidents                                                            
located both along the  road system and off of the road system would                                                            
be affected. He relayed  complaints he receives weekly about delayed                                                            
response  time. He  qualified  that once  a trooper  arrives at  the                                                            
scene of  an incident,  the involved  parties seem  to be  satisfied                                                            
with the level of service received.                                                                                             
                                                                                                                                
Senator  Olson asked if  the Department  has requested supplemental                                                             
funding for FY 02 expenses.                                                                                                     
                                                                                                                                
Mr. Godfrey described  the request for approximately  $488,000 for a                                                            
homeland security package  in addition to a supplemental request for                                                            
over $1 million  for normal expenditures.  He detailed the  homeland                                                            
security package  including $288,000 to fund a temporary  checkpoint                                                            
established at  the Yukon River and $135,000 for homeland  security.                                                            
He told  of  an upcoming  training  exercise involving  federal  and                                                            
municipal agencies  to prepare for possible terroristic  attacks. He                                                            
stated this drill would cost the State over $64,000.                                                                            
                                                                                                                                
Senator Olson asked the  number of "brown shirts" (fish and wildlife                                                            
protection  officers)  and  "blue shirts"  (Alaska  State  Troopers)                                                            
positions would  be eliminated under  the proposed Senate  committee                                                            
substitute budget.                                                                                                              
                                                                                                                                
Mr. Godfrey listed  17 blue shirts, six court services  officers, or                                                            
"gray shirts", and 19 brown  shirt seasonal aides, for a total of 47                                                            
positions lost.                                                                                                                 
                                                                                                                                
Senator Austerman  stated the Department  of Public Safety  gave the                                                            
budget subcommittee  a list of programs that could  be reduced. As a                                                            
result, he recommended  the elimination of the Civil  Air Patrol and                                                            
the Batterers  Intervention  Program  to maintain  funding for  core                                                            
services. He reminded that  the two programs are recent additions to                                                            
the  Department's   operations  and  expressed  his   preference  to                                                            
eliminate programs  rather than "weaken"  the entire Department.  He                                                            
noted however  that the  subcommittee disagreed  with this  approach                                                            
and recommended funding for avalanche related programs.                                                                         
                                                                                                                                
Senator Olson noted the  significant funding reductions proposed for                                                            
administrative  services.   He  asked  the  impact  on  the  trooper                                                            
programs.                                                                                                                       
                                                                                                                                
Mr. Godfrey responded that  many outlying posts would be affected by                                                            
the  loss  of  administrative  assistance   resulting  in  uniformed                                                            
support troopers performing  these functions instead of operating in                                                            
the field.                                                                                                                      
                                                                                                                                
Senator Olson  next spoke to the proposed  reduction to the  Village                                                            
Public Safety  Officers  (VPSO) program  emphasizing the  dependence                                                            
upon this program in rural area.                                                                                                
                                                                                                                                
Mr. Godfrey explained that  support troopers are those who travel to                                                            
rural villages  to provide  support and training  to the VPSO  staff                                                            
stationed in those  locations. He clarified these  are not positions                                                            
stationed in urban  areas performing administrative  support duties.                                                            
Therefore,  he  stressed  the  VPSO program  would  be  impacted  by                                                            
reduced funding for support troopers.                                                                                           
                                                                                                                                
Department of Transportation and Public Facilities                                                                            
                                                                                                                                
KURT PARKAN, Deputy  Commissioner, Department of Transportation  and                                                            
Public  Facilities, testified  the  proposed Senate  Finance  budget                                                            
would have a substantial  impact on Department operations. He listed                                                            
the loss  of 187  positions, closure  of two  maintenance  stations,                                                            
partial closure  of a third  maintenance  station, and reduced  road                                                            
maintenance throughout the State.                                                                                               
                                                                                                                                
Mr. Parkan  furthered that a six to  seven week reduction  in Alaska                                                            
Marine Highway  (AMH) ferry service would occur: service  of the M/V                                                            
Columbia  could be  reduced  by one  and one  half  months, the  M/V                                                            
Malaspina,  which currently  provides service  to the northern  Lynn                                                            
Canal, would be surplussed,  the M/V Bartlett would be surplussed in                                                            
May 2003, the  M/V Aurora would be  in lay-up status from  July 2002                                                            
through  May 2003,  then  relocated  to the  Prince  of Wales  route                                                            
formerly service  by the M/V Bartlett, the M/V Taku,  which provides                                                            
service between  Prince of Wales and Skagway, would  be laid up from                                                            
October 31, 2002  through June 1, 2003.  In addition  he stated that                                                            
a fee increase would be  implemented for all passengers and vehicles                                                            
and prices for on board food service would be raised.                                                                           
                                                                                                                                
Senator Olson  asked the level of service to rural  Alaska in FY 03.                                                            
                                                                                                                                
Mr. Parkan answered  that service would be reduced  for the roads in                                                            
the Nome area.   He referenced the Department's impact  statement as                                                            
containing  further details  [copy on file.]  He qualified  that the                                                            
budget proposed  by the Senate Finance Committee is  "kinder" to the                                                            
Nome area than  the version passed by the House of  Representatives.                                                            
                                                                                                                                
Senator Olson expressed  concern that the Department would not "turn                                                            
the lights out on the runway".                                                                                                  
                                                                                                                                
Mr. Parkan assured  that the Department has determined  that airport                                                            
service is  critical to many  parts of Alaska,  as they provide  the                                                            
only access to  several communities, and that the  levels of service                                                            
would be maintained to ensure the airports retain certification.                                                                
                                                                                                                                
Senator Austerman  asked the number of maintenance  stations located                                                            
outside of major urban areas.                                                                                                   
                                                                                                                                
Mr.  Parkan  estimated  the State  currently  has  approximately  50                                                            
maintenance stations.                                                                                                           
                                                                                                                                
Senator Austerman wanted  to know how many stations would be closed.                                                            
                                                                                                                                
Mr. Parkan  answered  four: Kalson  Bay, Kodiak,  Chitna, and  Birch                                                            
Lake, noting that operations  at other stations would be reduced due                                                            
to staff  restraints. He  gave the station  located in Willow  as an                                                            
example, in that staffing would be reduced by fifty percent.                                                                    
                                                                                                                                
Senator  Austerman  asked if  the positions  located  at the  closed                                                            
maintenance  stations would  be eliminated  or transferred  to urban                                                            
areas.                                                                                                                          
                                                                                                                                
Mr.  Parkan  replied  that  in  some  instances  the  positions  are                                                            
eliminated  and in other  instances  the staff are  relocated  to an                                                            
adjoining  maintenance station.  He added  that equipment is  either                                                            
transferred to another station or surplussed.                                                                                   
                                                                                                                                
Alaska Court System                                                                                                           
                                                                                                                                
CHRIS  CHRISTENSEN,  Deputy Administrative  Director,  Alaska  Court                                                            
System,  testified that  the  Court System  is unique  and that  the                                                            
impacts of the  proposed budget reductions would be  "magnified". He                                                            
explained that  the Court System operates one program:  to provide a                                                            
forum  for the  resolution  of civil  and  criminal  cases filed  by                                                            
individuals, businesses  and governmental entities. He stressed that                                                            
the  trial  courts  are  not  allowed  to  refuse  to  hear  a  case                                                            
presented, and that the  Court is required to administer the program                                                            
within  a  certain  mandated  time   frames  as  stipulated  in  the                                                            
constitution and in statute.                                                                                                    
                                                                                                                                
Mr. Christensen  informed  that the  proposed budget  in the  Senate                                                            
committee substitute  contains a reduction of almost  six percent in                                                            
"available  dollars"  from FY  02, which  is almost  $3 million.  He                                                            
noted this amount includes  the $2.5 million necessary for increased                                                            
costs  plus  a  $597,000   unallocated  reduction.   He  listed  the                                                            
increased costs  not funded: pay raises approved by  the Legislature                                                            
two years prior,  $146,000 for the second year of  operations of the                                                            
Driving While Intoxicated  (DWI) Courts in Anchorage and Bethel, and                                                            
$680,000  for  required  increased  contributions  to  the  Judicial                                                            
Retirement  System.  He noted  the  retirement  fund had  been  over                                                            
funded  in recent  years  and those  funds  had been  available  for                                                            
reappropriation, although  this year, a portion of the funds must be                                                            
returned to maintain the actuarial value of the account.                                                                        
                                                                                                                                
Mr.  Christensen   stressed  that  fewer  resources   to  handle  an                                                            
increased  caseload  would  result  in  slower  processing  of  that                                                            
caseload. However, he reiterated  that a majority of the cases could                                                            
not be delayed.                                                                                                                 
                                                                                                                                
Mr. Christensen asked how  the Court System would manage the funding                                                            
reduction "of  this magnitude". He suggested the Court  System could                                                            
discontinue  operations in some locations,  although he pointed  out                                                            
this does not  stop the demand for services: people  would still get                                                            
divorced and  crimes would continue  to be committed. He  also noted                                                            
that closing  the third largest courthouse  in the State  located in                                                            
Palmer, for example,  would only realize a savings  of approximately                                                            
$1.5 million, which is only half the amount necessary.                                                                          
                                                                                                                                
Mr. Christensen did anticipate  that some smaller magistrate courts,                                                            
with smaller  caseloads,  would be  closed, as well  as some  larger                                                            
courts located  along the road system. He furthered  that the larger                                                            
courts,  notably  those  in  Anchorage  and  Fairbanks,  would  have                                                            
significant layoffs.                                                                                                            
                                                                                                                                
Mr.  Christensen  told  of efforts  of  the past  several  years  to                                                            
quicken the casework  process, which he stated would  be reversed as                                                            
a result  of these  layoffs  and court  closures.  He stressed  that                                                            
because  the State  constitution  mandates  that criminal  cases  be                                                            
prioritized civil cases  and family cases would be delayed. He noted                                                            
that approximately  30,000 felony  and misdemeanor cases  were filed                                                            
in Alaska during  the previous year,  and of that amount  four "fell                                                            
through  the cracks"  and  were dismissed  under  the "speedy  trial                                                            
rule." He predicted more  such dismissals would occur if the layoffs                                                            
and court closures were instituted.                                                                                             
                                                                                                                                
Mr. Christensen  spoke to  the consequences  of delaying some  civil                                                            
cases,  including the  loss of  federal funding.  He continued  that                                                            
family law cases  do not have a statutory or constitutional  mandate                                                            
for resolution  in a certain timeframe.  Therefore, he stated  these                                                            
cases  would be  delayed the  most, and  he surmised  these are  the                                                            
cases that should be delayed the least.                                                                                         
                                                                                                                                
                                                                                                                                
SFC 02 # 73, Side A 05:43 PM                                                                                                    
                                                                                                                                
                                                                                                                                
Mr. Christensen  reminded the Committee that judges  are required to                                                            
provide  a  sworn  affidavit  every two  weeks  attesting  they  are                                                            
"caught up  on their work" or their  paycheck is withheld  until the                                                            
work  is up  to date.  He advised,  as a  lawyer, that  this law  is                                                            
likely   unconstitutional,   although,  as   a  court  manager,   he                                                            
characterized  this law as "a great  tool". However, he opined  that                                                            
judges  should not  lose their  paycheck  due to  lack of  resources                                                            
available to complete their duties.                                                                                             
                                                                                                                                
MARLA GREENSTEIN, Executive  Director, Alaska Commission on Judicial                                                            
Conduct,  testified  via teleconference   from Anchorage,  that  the                                                            
Commission  is  constitutionally   mandated  to address   complaints                                                            
related to judicial ethics.  She noted the Commission has no control                                                            
over the  caseload. She informed  that two  full time positions  are                                                            
necessary to fulfill  the normal duties and that outside  council is                                                            
contracted  to handle serious cases  involving formal hearings.  She                                                            
stated that  the proposed funding  allocation for the Commission  is                                                            
inadequate  and fewer funds would  be available to hire the  outside                                                            
council.                                                                                                                        
                                                                                                                                
Ms. Greenstein  shared the history  of repeated supplemental  budget                                                            
requests. She warned that  if the Commission is not funded fully, it                                                            
would "severely  impact" the ability to enforce the  judicial ethics                                                            
code.  She  predicted  that  some  difficult   cases  would  not  be                                                            
processed and  that the quality of the prosecutions  would diminish.                                                            
                                                                                                                                
LARRY COHN, Executive  Director, Alaska Judicial Council,  testified                                                            
via teleconference from  Anchorage, that the proposed Senate Finance                                                            
budget of $742,000  for the Council  is approximately seven  percent                                                            
less than  the current budget  and the same  as the budget  of eight                                                            
years prior. He  stated that approximately $39,000  of the reduction                                                            
is a result of the Council's  completion of a comprehensive criminal                                                            
justice  study. He  informed  that the  Council has  proposed a  new                                                            
study relating  to self-represented litigants that  would require an                                                            
additional $39,000,  although he did not anticipate  receiving those                                                            
funds.  He   asserted  that  the   Council  has  few  discretionary                                                             
responsibilities,  as the  constitution or  statutes mandate  almost                                                            
all the work undertaken.                                                                                                        
                                                                                                                                
Mr. Cohn noted  the Council has not  requested supplemental  funding                                                            
in  over  20 years,  although  the  proposed  budget  provides  less                                                            
funding   "at    a   time   when    the   Council   has    increased                                                            
responsibilities."    He    listed    one    of    the    additional                                                            
responsibilities,  as  contained  in  HB  172  passed  the  previous                                                            
session, to evaluate the  performance of two new therapeutic courts.                                                            
He furthered  that the pending HB  515 would require the  Council to                                                            
establish performance measures for the Alaska Court System.                                                                     
                                                                                                                                
Mr. Cohn commented  that the Legislature has considered  funding the                                                            
development of fisheries,  mining and other resource development and                                                            
he stressed  that funding the Council  is an investment in  justice.                                                            
                                                                                                                                
Senator Olson  asked how  the level of service  of the Alaska  Court                                                            
System would be affected by the proposed budget allocations.                                                                    
                                                                                                                                
Mr. Christensen  responded  that some  criminal cases  would not  be                                                            
processed and  that there would be  "a complete loss of service"  to                                                            
some small  communities. He  asserted that  the Alaska Court  System                                                            
would  be unable  to  fulfill  its constitution  mandates  with  the                                                            
proposed level of funding.                                                                                                      
                                                                                                                                
Senator Olson  asked if the court  located in Nome would  be closed.                                                            
                                                                                                                                
Mr. Christensen  answered that  decisions have  not been made  as to                                                            
which  courts  would  close.  He  spoke  to  the  criteria  used  in                                                            
reviewing  whether  layoffs  or  closures  would  be  made  at  each                                                            
location.   He  listed  available   alternative  facilities   for  a                                                            
community and  the quality of employees  at each court, as  some are                                                            
able to work more efficiently.                                                                                                  
                                                                                                                                
Senator  Olson  referenced  the testimony  of  the  Alaska  Judicial                                                            
Council claiming that the  funding for evaluation of the therapeutic                                                            
courts is insufficient.  He asked the long-term consequences  to the                                                            
program.                                                                                                                        
                                                                                                                                
Mr. Cohn replied  that the Council was not provided  with funding to                                                            
undertake  the duties  required of  it in the  enabling legislation                                                             
establishing  the  therapeutic  courts.  He  described  the  studies                                                            
scheduled for the next  three to four years to collect, analyze, and                                                            
report  data. He  stated  the lack  of  funding for  the  evaluation                                                            
process should  not affect the on-going operations  of the court for                                                            
the  next  several  years,  although   the  absence  of  a  complete                                                            
evaluation   would  affect   the   information   available  to   the                                                            
legislature for determining whether the courts are worthwhile.                                                                  
                                                                                                                                
Senator Olson  commented that it would  be difficult to be  "hard on                                                            
crime" if the necessary information is not provided.                                                                            
                                                                                                                                
Mr. Cohn affirmed that  more information is beneficial. He suggested                                                            
that  recidivism could  be reduced  by  the use  of the therapeutic                                                             
courts, but this would be unknown without proper evaluation.                                                                    
                                                                                                                                
Office of the Governor                                                                                                        
                                                                                                                                
MIKE NIZICH,  Administrative  Director, Division  of Administrative                                                             
Services, Office of the  Governor, testified to two areas of concern                                                            
regarding  the proposed $1.65  million general  fund reduction  over                                                            
the amount  requested. The first he  listed as the year-three  labor                                                            
cost increases  of $267,600, which he stressed are  statutory salary                                                            
increases  and that the  Office does  not have  the option to  forgo                                                            
these raises. As a result,  he informed that three positions must be                                                            
eliminated.                                                                                                                     
                                                                                                                                
Mr. Nizich  stated the  second concern as  the $567,000 unallocated                                                             
budget reduction.   He cautioned this is a significant  reduction to                                                            
the Office's  base operating  budget  and that it  would impede  the                                                            
resources  available to the  next governor  and lieutenant  governor                                                            
who  would take  office at  the mid  point  of the  fiscal year.  He                                                            
pointed out that the Office  of the Governor operates primarily with                                                            
general funds  for personnel services.  Therefore, he informed  that                                                            
the reductions must be  taken in the number of positions funded, and                                                            
that nine full  time positions must be eliminated.  He was unable to                                                            
speculate on which  positions would be eliminated  as the priorities                                                            
of the next governor were unknown.                                                                                              
                                                                                                                                
Senator  Olson  asked for  elaboration  on  the assertion  that  the                                                            
proposed funding level would impede the new administration.                                                                     
                                                                                                                                
Mr. Nizich,  replied that  at the start of  FY 03, only five  months                                                            
remain of the  current Governor's term of office.  Speaking from his                                                            
experience  of working during multiple  administration transitions,                                                             
newly elected  governors establish  agendas and expect to  implement                                                            
them  once taking  office.  He stressed  that, unlike  any  previous                                                            
governor, the  next administration  would not have the financial  or                                                            
human resources available  to address their priorities. He furthered                                                            
that no discretionary  funds would  be available to address  "public                                                            
outcry" issues, such as fisheries, an oil spill, etc.                                                                           
                                                                                                                                
Senator Olson  asked if the proposed budget reductions  would impact                                                            
every aspect of the Office of the Governor operations.                                                                          
                                                                                                                                
Mr. Nizich affirmed that every component would be affected.                                                                     
                                                                                                                                
University of Alaska                                                                                                          
                                                                                                                                
It was established  that no representative  was present to  speak to                                                            
the impacts to the University of Alaska.                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Dave Donley adjourned the meeting at 06:02 PM                                                                          

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