Legislature(2015 - 2016)SENATE FINANCE 532

03/10/2015 09:00 AM FINANCE

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Audio Topic
09:06:20 AM Start
09:07:50 AM SB27
09:08:18 AM Overview: Fy 16 Department of Labor and Workforce Development
09:58:49 AM Overview: Fy 16 Department of Military and Veterans Affairs
10:21:43 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 27 Presentation: Overview FY17 Operating Budget TELECONFERENCED
Departments: Environmental Conservation and
Departments: University of Alaska, Military and
Veterans' Affairs, and Labor and Workforce
<University of Alaska Removed from Agenda>
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 10, 2015                                                                                            
                         9:06 a.m.                                                                                              
9:06:20 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Kelly  called the Senate Finance  Committee meeting                                                                    
to order at 9:06 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Donny Olson                                                                                                             
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Heidi   Drygas,  Commissioner,   Department  of   Labor  and                                                                    
Workforce  Development; Paloma  Harbour, Director,  Division                                                                    
of   Administrative  Services,   Department  of   Labor  and                                                                    
Workforce Development; Colonel  Laurel Hummel, Commissioner,                                                                    
Department of Military and  Veterans Affairs; Colonel Robert                                                                    
Doehl,  Deputy  Commissioner,  Department  of  Military  and                                                                    
Veterans  Affairs;  Susan  Colligan, Director,  Division  of                                                                    
Administrative   Services,   Department  of   Military   and                                                                    
Veterans Affairs.                                                                                                               
SB 27     APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
          SB 27 was HEARD and HELD in committee for further                                                                     
FY 16 BUDGET OVERVIEWS:                                                                                                         
          DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                                                                           
          DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT                                                                         
SENATE BILL NO. 27                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs,    capitalizing   funds,    making                                                                    
     reappropriations, and 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."                                                                                          
9:07:50 AM                                                                                                                    
^OVERVIEW:  FY   16  DEPARTMENT   OF  LABOR   AND  WORKFORCE                                                                  
9:08:18 AM                                                                                                                    
HEIDI   DRYGAS,  COMMISSIONER,   DEPARTMENT  OF   LABOR  AND                                                                    
WORKFORCE  DEVELOPMENT, discussed  the PowerPoint,  "FY 2016                                                                    
Budget   Overview,  Department   of   Labor  and   Workforce                                                                    
Development" (copy  on file). She  shared that she  was born                                                                    
and  raised in  Fairbanks,  and attended  the University  of                                                                    
Alaska  Fairbanks  (UAF).  She   attended  law  school,  and                                                                    
graduated in  2003. She continued to  discuss her background                                                                    
and resume.                                                                                                                     
Commissioner   Drygas  highlighted   slide  1,   "Department                                                                    
          Provide safe and legal working conditions and                                                                         
          advance opportunities for employment.                                                                                 
     KEY PROGRAM PRIORITIES:                                                                                                    
          •Protect Alaska's workers through statutory and                                                                       
          regulatory assistance and enforcement.                                                                                
          •Workforce development to support Alaska hire and                                                                     
          economic development.                                                                                                 
          •Income replacement for injured, unemployed, and                                                                      
          permanently disabled workers.                                                                                         
Co-Chair Kelly suggested that the  focus of the presentation                                                                    
be on the budget requests.                                                                                                      
Commissioner Drygas stated  that slide 2 showed  some of the                                                                    
office locations and job centers.                                                                                               
Commissioner  Drygas  looked  at  slide  3,  which  was  the                                                                    
department organizational chart.                                                                                                
Commissioner  Drygas discussed  slide 4,  "Protect Workers."                                                                    
She stressed that  the state saw a  significant reduction on                                                                    
the work place time lost  due to illnesses and injuries from                                                                    
a rate per  100 employees of 1.13  in FY 13 to  a record low                                                                    
of 0.061  in FY  14. She  stressed that  the decrease  was a                                                                    
direct result of the Division  of Labor Standards and Safety                                                                    
developing  a   ten-hour  Occupational  Safety   and  Health                                                                    
Administration  (OSHA)  course  that  was  used  to  improve                                                                    
safety  in the  target industry  of seafood  processing. The                                                                    
majority  of the  decrease occurred  in  that industry.  She                                                                    
expressed   concern,  because   the   other  body   proposed                                                                    
eliminating the  funding that  supported those  efforts. She                                                                    
felt that  developing proactive programming to  keep workers                                                                    
safe, functioned as a cost savings measure overall.                                                                             
Commissioner   Drygas   highlighted  slide   5,   "Workforce                                                                    
Development." She stated  that the vocational rehabilitation                                                                    
programs performance had remained strong over time.                                                                             
9:12:05 AM                                                                                                                    
Co-Chair  Kelly looked  at slide  4, and  surmised that  the                                                                    
reduction rates were an overall  reflection, or strictly the                                                                    
seafood   industry.   Commissioner   Drygas   replied   that                                                                    
reduction   rates  were   an  overall   reflection  of   the                                                                    
workforce. She  stressed that there  was a program  to train                                                                    
the  seafood  processing  industry for  better  handling  of                                                                    
seafood.  She stressed  that the  industry was  fraught with                                                                    
workplace  injuries.  The  rate  of  the  decline  could  be                                                                    
attributed to  the specific  training program.  She remarked                                                                    
that the training  program cost $300,000, and felt  it was a                                                                    
worthwhile investment.                                                                                                          
Senator  Bishop  remarked  that the  keeping  the  workplace                                                                    
incident  rate  low  would keep  the  overall  workman  comp                                                                    
premiums at a low rate.                                                                                                         
Vice-Chair Micciche agreed  that the unintended consequences                                                                    
of  the  budget reductions  could  be  far higher  than  the                                                                    
initial program cut.                                                                                                            
Commissioner   Drygas   addressed    slide   5,   "Workforce                                                                    
Development." She shared  that the vocational rehabilitation                                                                    
programs performance remained strong in 2014.                                                                                   
Commissioner   Drygas    looked   at   slide    6,   "Income                                                                    
Replacement." She  shared that  the department saw  a marked                                                                    
improvement  in the  timeliness  of  Fishermen's Fund  Claim                                                                    
payments from an  average of 60 days in FY  13 to an average                                                                    
of 47 days in FY 14.  She stated that the reduction resulted                                                                    
from an  implementation of  follow-up protocol  that quickly                                                                    
notified  claimants of  any  missing  documents required  to                                                                    
process the claims. The successes  were due in large part to                                                                    
existing public  and private partnerships she  stressed that                                                                    
the department worked hard to develop the partnerships.                                                                         
Commissioner   Drygas   discussed    slide   7,   "Workforce                                                                    
Development Partnerships":                                                                                                      
     State Partnerships                                                                                                         
          -Alaska Military Youth Academy - WorkKeys                                                                             
          -Department of Corrections - WorkKeys assessments                                                                     
          and Hiland project                                                                                                    
          -Department of Education and Early Development -                                                                      
          WorkKeys assessments, education program outcomes,                                                                     
         and Career and Technical Education grants                                                                              
          -University of Alaska - Training program outcomes                                                                     
          -Division of Juvenile Justice - Johnson Youth                                                                         
          Center training                                                                                                       
     Private/Non-profit Partnerships                                                                                            
     -Alaska Employers                                                                                                          
     -Tribal   and   Community   Vocational   Rehabilitation                                                                    
     -Construction Education Foundation                                                                                         
     -Alaska Works Partnership                                                                                                  
     -Regional Training Centers and Private Training                                                                            
     -Membership on Boards and Councils                                                                                         
9:17:06 AM                                                                                                                    
Senator Bishop  wondered if the  other body had  proposed to                                                                    
cut  the  Construction  Education  Foundation.  Commissioner                                                                    
Drygas responded in the affirmative.                                                                                            
Senator Bishop wondered how much  of the funding was used to                                                                    
bring  high school  students into  the trades.  Commissioner                                                                    
Drygas replied  that there was approximately  $2 million for                                                                    
K-12 in the Construction Education Foundation.                                                                                  
Co-Chair MacKinnon  disclosed that  her husband was  the CEO                                                                    
and served  on the board  of directors for  the Construction                                                                    
Education Foundation.                                                                                                           
Senator   Dunleavy  wondered   if  there   were  discussions                                                                    
regarding job displacement management  due to the job losses                                                                    
that would  occur during  the budget  climate in  the state.                                                                    
Commissioner Drygas  replied in the affirmative.  She wanted                                                                    
to  insure that  the  Unemployment Insurance  (UI) fund  was                                                                    
Vice-Chair  Micciche remarked  that there  was a  75 percent                                                                    
reduction in lost  work case days. He felt that  the oil and                                                                    
gas  industry  hoped  that  many of  the  people  that  were                                                                    
displaced from  the shutdown  of the  Agrium Plant  would be                                                                    
able  to return  to the  Kenai for  work. He  felt that  the                                                                    
success   on   a    community   level   was   extraordinary.                                                                    
Commissioner  Drygas  responded  that  the  department  took                                                                    
great pride  in the  rapid response  program to  ensure that                                                                    
the workers get back to work as quickly as possible.                                                                            
Commissioner  Drygas looked  at slide  8, "FY  2016 Endorsed                                                                    
Budget:   $179,537.8  million."   She  explained   that  the                                                                    
department's  governor's budget  totaled $179.5  million; 53                                                                    
percent of which was federal  funds. The department's UGF in                                                                    
FY 16 totaled $29.2 million,  which was down by $4.2 million                                                                    
from the current year, and  was equivalent to a 12.8 percent                                                                    
reduction.  To  implement   the  reduction,  the  department                                                                    
focused    on   the    governor's   goal    of   redesigning                                                                    
administrative  services  to  maintain maximum  program  and                                                                    
services   delivery.   The   reductions  proposed   in   the                                                                    
governor's budget  were significant enough that  there would                                                                    
be  direct  service  implications, but  the  decisions  were                                                                    
informed and  reasoned. She was  committed to  continuing to                                                                    
streamline   services;   find  efficiencies;   and   develop                                                                    
partnerships to maintain key programs  and services. She did                                                                    
not  believe   that  the  reductions   made  by   the  House                                                                    
subcommittee fig the key criteria.                                                                                              
9:22:16 AM                                                                                                                    
Commissioner Drygas discussed  slide 9, "Governor's Endorsed                                                                    
Budget Overview":                                                                                                               
     Operating Budget:                                                                                                          
     One-time and Temporary Increment Reversals                                                                                 
          •-$1.4   million   UGF   for  the   Alaska   Youth                                                                    
          First/Compass Alaska program                                                                                          
          •-$150.0   DGF   for  the   Rural   Apprenticeship                                                                    
          Outreach program                                                                                                      
          •-$226.8  UGF  and  -$100.0  DGF  for  the  Alaska                                                                    
          Vocational  Technical  Center  (AVTEC)  Registered                                                                    
          Nurse program                                                                                                         
     Designated General Fund Increases                                                                                          
          •Additional  program  receipt  authority  for  the                                                                    
          Alaska Safety  Advisory Council ($35.0)  and AVTEC                                                                    
          •$429.0  in  additional Technical  and  Vocational                                                                    
          Education  Program  (TVEP)   funding  to  regional                                                                    
          training  centers  specified   in  Alaska  Statute                                                                    
          23.15.835   Known   Federal  and   Other   Funding                                                                    
          •-$3.0 million  less in federal and  other funding                                                                    
          that supports the state's job center network                                                                          
9:22:46 AM                                                                                                                    
Senator Bishop  wondered if the  decrement was only  for the                                                                    
registered nurse  program. Commissioner Drygas  replied that                                                                    
the reversal was only for the registered nurse program.                                                                         
Senator Bishop wanted  to examine that issue  further in the                                                                    
Senator  Dunleavy remarked  that the  administration was  in                                                                    
disagreement  with  the  recommended  cuts  from  the  House                                                                    
subcommittee. Commissioner Drygas agreed.                                                                                       
Senator Dunleavy  asked that  she restate  her disagreement.                                                                    
Commissioner  Drygas   responded  that  she   believed  very                                                                    
strongly  that  reductions  must be  made  thoughtfully  and                                                                    
responsibly, and she did not  believe that the cuts from the                                                                    
House subcommittee were responsible or thoughtful.                                                                              
Senator  Dunleavy  wondered  if there  would  be  additional                                                                    
recommendations  for  cuts  and reductions  above  what  was                                                                    
submitted  by  the  governor's budget.  Commissioner  Drygas                                                                    
responded that  she would continue  to examine  her programs                                                                    
to determine  the best  solutions. She  felt that  the House                                                                    
proposed  reductions would  cost  more money  than the  cuts                                                                    
would  provide. She  felt that  reducing OSHA  funding would                                                                    
hurt the  bottom line  more than it  helps the  bottom line.                                                                    
She agreed  to continue  to examine more  areas to  cut. She                                                                    
remarked  that the  current  time  was not  a  good time  to                                                                    
diminish the efforts to develop Alaska work force.                                                                              
Vice-Chair  Micciche preferred  that commissioners  were not                                                                    
compliant to  the legislature, and appreciated  the honesty.                                                                    
He hoped to continue to passionately defend the programs.                                                                       
Co-Chair  Kelly stressed  that  the  commissioners were  not                                                                    
available to argue against the governor's budget.                                                                               
Commissioner Drygas continued to discuss slide 9.                                                                               
9:28:21 AM                                                                                                                    
Senator  Dunleavy  surmised  that  DLWD  was  examining  the                                                                    
possibility  of  program redundancies.  Commissioner  Drygas                                                                    
Senator  Dunleavy  wondered if  there  would  be a  plan  to                                                                    
concentrate  on   one  particular  training  center   for  a                                                                    
specific trade,  in order consolidate and  reduce cost while                                                                    
maintaining quality. Commissioner  Drygas responded that the                                                                    
governor wanted  to focus on career  and technical education                                                                    
(CTE).  The  department  was  working  to  examine  its  own                                                                    
programs to  eliminate duplications, and work  with industry                                                                    
to ensure that the training programs that were desired.                                                                         
Senator  Dunleavy  asked if  there  was  a continued  robust                                                                    
presence  of  providers  of  training.  Commissioner  Drygas                                                                    
replied that there  were both union and  nonunion public and                                                                    
private partnerships. She  stressed that those relationships                                                                    
were continually cultivated.                                                                                                    
Commissioner   Drygas  looked   at  slide   10,  "Governor's                                                                    
Endorsed Budget Overview":                                                                                                      
     Operating Budget continued                                                                                                 
     $300.0 Unallocated Unrestricted General Fund Reduction                                                                     
          •Delete  three positions  from the  Commissioner's                                                                    
          Office  and the  Administrative Services  Division                                                                    
          to  attain  the  Governor's  goal  of  redesigning                                                                    
          administrative infrastructure  to maintain maximum                                                                    
          program and services delivery                                                                                         
     8 percent Unrestricted General Fund ($2.5 million)                                                                         
          •Reduce administrative and  support positions, and                                                                    
          streamline  services  to minimize  direct  service                                                                    
          impacts (-$1,052.2)                                                                                                   
          •Reduce   funding   available  to   offset   lease                                                                    
          expenses (-$311.4)                                                                                                    
          •Closure  of   the  Alaska   Vocational  Technical                                                                    
          Center's  Anchorage Campus,  which houses  AVTEC's                                                                    
          Allied Health programs (-$478.9)                                                                                      
Co-Chair Kelly queried the additional amount that the House                                                                     
removed. Commissioner Drygas replied that the House removed                                                                     
an additional $6 million, which was a 31 percent reduction.                                                                     
9:34:04 AM                                                                                                                    
PALOMA   HARBOUR,  DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                                                                    
SERVICES,  DEPARTMENT OF  LABOR  AND WORKFORCE  DEVELOPMENT,                                                                    
announced that the total UGF  reduction in the FY 16 amended                                                                    
budget was $4.2 million.                                                                                                        
Commissioner Drygas highlighted slide 11, "Governor's                                                                           
Endorsed Budget Overview":                                                                                                      
     Operating Budget continued                                                                                                 
     8 percent Unrestricted General Fund ($2.5 million)                                                                         
     Reduction continued                                                                                                        
     •Reduced Adult Basic Education instructional hours (-                                                                      
     •Eliminate a Wage and Hour Investigator (-$153.9)                                                                          
     •Less funding for pass-through grants in support of                                                                        
     Alaska Construction Academies and Rural Training                                                                           
     Centers (-$367.6)                                                                                                          
     Capital Budget                                                                                                             
     •$530.0 unexpended  balance of  the AVTEC  Third Avenue                                                                    
     Dormitory project  to provide  for the  replacement and                                                                    
     upgrading  of   AVTEC's  information   technology  (IT)                                                                    
     equipment and infrastructure.                                                                                              
Senator  Bishop  queried the  total  number  of Adult  Basic                                                                    
Education   (ABE)  test   takers  that   received  diplomas.                                                                    
Commissioner  Drygas replied  that there  were approximately                                                                    
17,000, but agreed to provide an exact figure.                                                                                  
Senator  Bishop wondered  if less  people would  be able  to                                                                    
take  the test,  due to  the budget  reduction. Commissioner                                                                    
Drygas deferred to Ms. Harbour.                                                                                                 
Ms. Harbour  explained that the  ABE program  estimated that                                                                    
the reduction would serve  approximately 80 less individuals                                                                    
per year.  She stated that  the GED underwent  a significant                                                                    
change in  2014 to a computer  based test. The GED  test was                                                                    
much  more difficult,  so  it  required greater  instruction                                                                    
just to take  a computer-based test. There will  be a demand                                                                    
on the program, but the number of test takers had reduced.                                                                      
Senator  Bishop  encouraged  the department  to  consider  a                                                                    
partnership  with   another  provider   to  help   with  the                                                                    
instructional hours,  because GEDs were another  way into an                                                                    
apprenticeship program.                                                                                                         
Co-Chair  MacKinnon looked  at slide  10, and  remarked that                                                                    
there  would  be a  deletion  of  three positions  from  the                                                                    
Commissioner's  Office  and   Administrative  Services.  She                                                                    
wondered   if  those   positions   were  currently   filled.                                                                    
Commissioner Drygas  responded that the positions  would not                                                                    
result in any  layoffs. She furthered that  some people were                                                                    
moved to different positions to eliminate some vacancies.                                                                       
Co-Chair  MacKinnon  commented  that  the  reoccurring  cost                                                                    
would  save  money in  perpetuity  if  those positions  were                                                                    
already filled.                                                                                                                 
Commissioner  Drygas discussed  slide  12,  "Vision for  the                                                                    
     Streamline   programs   and    revamp   the   workforce                                                                    
     development system to ensure maximum effectiveness and                                                                     
     efficiency within a sustainable budget                                                                                     
     Increase Alaska resident hire in priority industries                                                                       
     and occupations to ensure Alaskans are getting                                                                             
     Alaska's jobs                                                                                                              
     Ensure economic stability for injured, unemployed and                                                                      
     disabled Alaskans                                                                                                          
9:42:30 AM                                                                                                                    
AT EASE                                                                                                                         
9:44:21 AM                                                                                                                    
9:44:32 AM                                                                                                                    
Vice-Chair  Micciche   remarked  that  there   were  certain                                                                    
Alaskan  industries that  had a  high  nonresident rate.  He                                                                    
queried   solutions  to   the  nonresident   rate  in   some                                                                    
industries.   Commissioner   Drygas   responded   that   the                                                                    
department  was working  to develop  an increase  the Alaska                                                                    
hire  in  the seafood  industry.  There  was work  with  the                                                                    
Pacific Seafood Processors Association  in working with ways                                                                    
to employ Alaskans.  She shared that there  was a successful                                                                    
prisoner  reentry   program  into  the   seafood  processing                                                                    
industry, and  many of  those individuals  were some  of the                                                                    
best performing  workers in the particular  plant. There was                                                                    
an interest to  develop and further broaden  that program to                                                                    
other processors.                                                                                                               
Vice-Chair  Micciche   felt  that   it  was   important  for                                                                    
residents  to understand  that  there  were some  industries                                                                    
that were considered "seasonal."                                                                                                
Senator  Bishop remarked  that the  state  may receive  some                                                                    
royalty  relief,  if the  state  reached  80 percent  Alaska                                                                    
Vice-Chair Micciche  encouraged the commissioner  to educate                                                                    
Alaskans on the true residency rates.                                                                                           
9:50:31 AM                                                                                                                    
AT EASE                                                                                                                         
9:58:20 AM                                                                                                                    
^OVERVIEW:  FY  16  DEPARTMENT   OF  MILITARY  AND  VETERANS                                                                  
9:58:49 AM                                                                                                                    
COLONEL LAUREL HUMMEL,  COMMISSIONER, DEPARTMENT OF MILITARY                                                                    
AND VETERANS AFFAIRS, introduced herself.                                                                                       
COLONEL  ROBERT DOEHL,  DEPUTY  COMMISSIONER, DEPARTMENT  OF                                                                    
MILITARY AND VETERANS AFFAIRS, introduced himself.                                                                              
Commissioner  Hummel  looked   at  the  PowerPoint,  "FY2016                                                                    
Budget Overview, DMVA" (copy on file).                                                                                          
Commissioner  Hummel addressed  slide  2,  which showed  the                                                                    
2015 plan  and the  2016 amendment.  She stated  that column                                                                    
three showed the difference between the two.                                                                                    
Commissioner  Hummel  addressed  slide 3,  "FY  2016  Budget                                                                    
     Decreases in the Governor's Amended FY2016 budget                                                                          
          •$4,175.0 UGF - Alaska Aerospace Corporation                                                                          
          State  GF  operating  and sustainment  funds  have                                                                    
          been entirely eliminated.  Aero Receipts have been                                                                    
          correspondingly    increased    to   enable    the                                                                    
          collection of contract revenue.                                                                                       
          •$350.0   UGF   -   Interior   Veterans   Cemetery                                                                    
          Construction  of  the Interior  Veterans  Cemetery                                                                    
          has been  delayed due  to availability  of federal                                                                    
          funds. Therefore,  operating funds are  not needed                                                                    
          in FY2016.                                                                                                            
Co-Chair  Kelly noted  that  it  was $350,000.  Commissioner                                                                    
Hummel agreed.                                                                                                                  
Senator Bishop  surmised that the department  purchased some                                                                    
property  for the  new cemetery  in Fairbanks.  Commissioner                                                                    
Hummel agreed.                                                                                                                  
Senator Bishop wondered  if the budget had an  effect on the                                                                    
new  cemetery. Colonel  Doehl replied  that  the state  must                                                                    
find a  suitable location, so  the federal  government would                                                                    
build  the  cemetery.  Once  the  cemetery  was  built,  the                                                                    
department would operate the cemetery.                                                                                          
Senator Hoffman  queried the timeline for  the completion of                                                                    
the cemetery.  Commissioner Hummel replied that  the federal                                                                    
government  had   indicated  that  the  cemetery   would  be                                                                    
completed the following year.                                                                                                   
Vice-Chair Micciche noted  that the request was  also in the                                                                    
FY 15  budget, and felt  no need to provide  operating funds                                                                    
for a cemetery that was not currently operation.                                                                                
10:03:16 AM                                                                                                                   
Commissioner Hummel continued to discuss slide 3:                                                                               
          •$300.0 UGF - Base  Realignment and Closure Impact                                                                    
          DMVA  will  work   with  available  resources  and                                                                    
          coordinate  with   other  interested   parties  to                                                                    
          advocate  for  sustainment  of  Alaska's  military                                                                    
Commissioner  Hummel highlighted  slide 4,  "FY 2016  Budget                                                                    
     Decreases in the Governor's Amended FY2016 budget                                                                          
          •$350.0 UGF - Army Guard Facilities Maintenance                                                                       
          DMVA anticipates some cost  savings due to changes                                                                    
          in cost-sharing ratios with the National Guard.                                                                       
          •$133.6   GF   Match/$75.5  Fed   -   Pre-Disaster                                                                    
          Mitigation Activities                                                                                                 
          Pre-Disaster   Mitigation   activities   will   be                                                                    
Co-Chair  MacKinnon assumed  that the  $133,600 in  GF would                                                                    
leverage the $75,000. Commissioner Hummel agreed.                                                                               
Vice-Chair  Micciche looked  at slide  4, and  remarked that                                                                    
the decreases would  amount to $5.2 million.  He wondered if                                                                    
the  difference  between  $6.7   million  and  $5.3  million                                                                    
related to  PCN reductions. Commissioner Hummel  deferred to                                                                    
Ms. Colligan.                                                                                                                   
Co-Chair  Kelly asked  Vice-Chair  Micciche  to restate  his                                                                    
Vice-Chair Micciche remarked that  the changes in the bullet                                                                    
points totaled  $5.3 million, but  the UGF  decrements shown                                                                    
on slide 2 were $6.7 million.                                                                                                   
SUSAN   COLLIGAN,  DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                                                                    
SERVICES,  DEPARTMENT  OF  MILITARY  AND  VETERANS  AFFAIRS,                                                                    
explained  that  there  three other  small  items  including                                                                    
decrements, air  guard facilities,  and a  $94,500 decrease.                                                                    
She remarked that there was  reduction of $68,200 for a food                                                                    
service  position  in  the  Alaska  Military  Youth  Academy                                                                    
(AMYA),  which   was  a   recently  vacated   position.  She                                                                    
furthered that there was a  reduction of $13,700 in National                                                                    
Guard  Military  Headquarters,   and  there  were  continued                                                                    
examinations  of administrative  efficiencies. She  remarked                                                                    
that there  were some  net numbers in  the first  slide, and                                                                    
noted that  there were some  increases in  personal services                                                                    
due to contractual increases.                                                                                                   
Vice-Chair Micciche  surmised that  it was a  $1.462 million                                                                    
gap, and there  was only $150,000 accounted.  He queried the                                                                    
location of  the other $1.3 million  in detailed reductions.                                                                    
Ms. Colligan agreed to provide that information.                                                                                
10:08:43 AM                                                                                                                   
Commissioner  Hummel  discussed   slide  5,  "FY2016  Budget                                                                    
     Increases in federal authority in the Governor's                                                                           
     Amended FY2016 budget                                                                                                      
          •$3,005.0 Fed - Alaska Aerospace Corporation                                                                          
          The Department of Defense's current budget                                                                            
          contains federal funds for support of non-federal                                                                     
          launch  facilities. AAC  is one  of only  two such                                                                    
          facilities nationwide.                                                                                                
          •$1,300.0  Fed  -  Alaska Military  Youth  Academy                                                                    
          AMYA  anticipates award  of  a  40-month grant  to                                                                    
          provide  a  job-training   component  to  selected                                                                    
          cadets  who  have   completed  AMYA's  residential                                                                    
         •$250.0 Fed - Office of Veterans Affairs                                                                               
          The  Office  of  Veterans Affairs  was  awarded  a                                                                    
          federal grant  to off-set the  costs of  ground or                                                                    
          sea  transportation of  veterans  in highly  rural                                                                    
Senator  Dunleavy  wondered  if   the  grants  expired,  and                                                                    
whether there was  an expectation that the  state would then                                                                    
provide GF  funds. Commissioner Hummel replied  that she did                                                                    
not know if there was an  expectation that the grants were a                                                                    
one-time opportunity or long-term  programs. She deferred to                                                                    
Colonel Doehl.                                                                                                                  
Colonel Doehl explained that  the supplemental programs were                                                                    
eliminated  when the  federal dollars  were fully  depleted,                                                                    
because they were 100 percent federally funded.                                                                                 
Senator  Dunleavy remarked  that  there  were fiscal  issues                                                                    
that  caused people  to ask  new questions,  and noted  that                                                                    
there  were numerous  grants that  could be  awarded without                                                                    
legislative approval.                                                                                                           
10:12:53 AM                                                                                                                   
Co-Chair  MacKinnon looked  at slide  2, and  looked at  the                                                                    
"other"  category, and  remarked that  there was  an overall                                                                    
percentage increase.  She queried  the "other"  dollar gains                                                                    
and  wondered how  the Aerospace  deduction was  replaced by                                                                    
federal  receipts. Commissioner  Hummel  responded that  the                                                                    
other   category  included   $4.175  million   of  aerospace                                                                    
receipts  and  salary  increases. The  federal  receipts  of                                                                    
$4.668  million  included   approximately  $3  million  from                                                                    
aerospace,  the  $1.3 million  in  federal  grants to  AMYA,                                                                    
$250,000  to  veteran  services transportation  grants,  and                                                                    
salary increases.                                                                                                               
Co-Chair MacKinnon  remarked that  there was  no GF  for the                                                                    
grants. She stressed that  aerospace could collect receipts,                                                                    
and then have additional  spending authority for the federal                                                                    
grant. She noted that there  was approximately $120,000 that                                                                    
was not  yet identified.  She wondered  if there  was $4.175                                                                    
million in  the other category. Commissioner  Hummel replied                                                                    
in the affirmative, and stated  that it also included salary                                                                    
10:15:18 AM                                                                                                                   
Vice-Chair  Micciche wondered  what  the house  subcommittee                                                                    
had determined.  Mr. Doehl replied that  the House increased                                                                    
the  decrements  by  approximately $400,000:  eliminating  a                                                                    
position in  the commissioner's office; eliminating  more of                                                                    
the pre-mitigation  funding; and  examining savings  in Army                                                                    
and Air Guard facilities.                                                                                                       
Senator Hoffman  remarked that  the governor  indicated that                                                                    
he intended to expand the  National Guard in different areas                                                                    
of  the state,  specifically rural  Alaska. He  wondered how                                                                    
the department  planned to  accomplish that  goal in  FY 16.                                                                    
Commissioner   Hummel   replied    that   there   would   be                                                                    
revitalization of the Alaska National  Guard in rural Alaska                                                                    
was  one of  the department's  objective, but  that was  not                                                                    
included in  the current  budget. She stated  that it  was a                                                                    
complicated issue, and the department  must examine how best                                                                    
to  accomplish that  effort. She  hoped to  leverage federal                                                                    
funds   for  increased   recruitment,  transportation,   and                                                                    
training expenses.                                                                                                              
Senator  Hoffman wondered  if the  department had  conducted                                                                    
communications with  the congressional  delegation regarding                                                                    
the National Guard  expansion. Commissioner Hummel responded                                                                    
that there were no recent conversations.                                                                                        
Senator  Bishop  commented  that there  were  many  training                                                                    
aspects in Anchorage. He  queried the detailed opportunities                                                                    
for training. Commissioner Hummel  agreed to provide further                                                                    
10:19:53 AM                                                                                                                   
AT EASE                                                                                                                         
10:20:32 AM                                                                                                                   
SB 27 was HEARD and HELD in committee for further                                                                               
10:21:43 AM                                                                                                                   
The meeting was adjourned at 10:21 a.m.                                                                                         

Document Name Date/Time Subjects
031015 DOLWD Budget Overview.pdf SFIN 3/10/2015 9:00:00 AM
SB 27