Legislature(2019 - 2020)SENATE FINANCE 532
01/29/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB38 || SB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 38 | TELECONFERENCED | |
| *+ | SB 39 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
January 29, 2019
9:02 a.m.
9:02:07 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Peter Micciche
Senator Donny Olson
Senator Mike Shower
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Donna Arduin, Director, Office of Management and Budget;
Lacey Sanders, Budget Director, Office of Management and
Budget; Senator Cathy Giessel.
SUMMARY
SB 38 APPROP: SUPP; CAP; DISASTER RELIEF
SB 38 was HEARD and HELD in committee for further
consideration.
SB 39 APPROP:SUPP; REAPPROP; CAP; AMEND; REPEAL
SB 39 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 38
"An Act making supplemental appropriations for fire
suppression activities and restoration projects
relating to earthquake disaster relief; capitalizing
funds; and providing for an effective date."
SENATE BILL NO. 39
"An Act making supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; capitalizing funds; and providing for
an effective date."
9:05:35 AM
DONNA ARDUIN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
(OMB) introduced herself. She stated that that it was
important that, outside of the disaster response and
recovery, that there be a supplemental that did not spend
additional general fund dollars.
Co-Chair Stedman requested a brief work history.
9:06:44 AM
LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, discussed her work background.
Ms. Sanders discussed the presentation, "State of Alaska:
Office of Management and Budget; Supplemental Overview;
Presentation to the Senate Finance Committee" (copy on
file). She looked at slide 2, "FY 2019 Supplemental
Summary":
FY2019 Supplemental Bill
? Reductions in Spending
? Formula Program Adjustments
? Salary Adjustments Related to Classification of
Trooper Positions
? Operating Adjustments
? Capital Projects
? Transfers Back to the General Fund
FY2019 Disaster Supplemental Bill
? 2018 Cook Inlet Earthquake
? Disaster Relief Fund Capitalization
? Federal Highway Administration Funding
? State Facilities Costs Not Covered by Insurance
? FY2019 Fire Suppression Activity
Ms. Sanders highlighted slide 3, "FY 2019 Supplemental
Requests Totals." She stated that the slide was a summary
of the requests, split between the two bills. She noted
that the presentation identified the amount necessary to
fund the two bills.
Ms. Sanders addressed slide 4, "FY 2019 Supplemental
Requests Totals."
Ms. Sanders looked at slide 5, "FY 2019 Supplemental
Requests Totals.
Ms. Sanders discussed slide 6, "Historical Comparison."
Ms. Sanders looked at slide 7, "Historical Comparison."
9:10:55 AM
Ms. Sanders pointed to the document, "FY 2019 Supplemental
Requests; Released January 28, 2019" (copy on file).
Ms. Sanders looked at item 1:
DCCED
National Petroleum Reserve - Alaska Impact Grant
Program Additional Distribution (Language)
Ms. Sanders highlighted item 2:
DOC
MH: Renovation and Relocation of the Women's
Integrated Mental Health Unit at Hiland Mountain
Correctional Facility
Ms. Sanders looked at item 3:
DEC
Statewide Per- and Polyfluoroalkyl Substances (PFAS)
Identification of Sites and Related Costs
Senator Hoffman queried the past work for PFAS, and
wondered why it was important to include in the request.
Ms. Sanders replied that it was identified as an increased
health risk. The department was beginning to identify spots
that needed addressing.
Co-Chair Stedman wondered about the timing sequence, and
the need for the project in the supplemental budget.
Ms. Arduin replied that the request was for fire
suppression activity at numerous airports. She stated that
the department was identifying the necessary cleanup
locations, and would like that activity to begin as soon as
possible.
Senator Hoffman queried the locales of where the activity
would occur.
Ms. Sanders agreed to provide that information.
9:15:06 AM
Senator Olson remarked that his district had hundreds of
airports, but fire suppression was not an important factor
to those airports. He assumed that the fire suppression
activity was location-specific. He queried the list of
those areas.
Ms. Sanders replied that she did not currently have a list,
and furthered that that she believed that the fund was
previously used for test practice with the foam to ensure
preparedness in the event of a need for the fire-
suppression.
Senator Olson wondered why the funding was currently
necessary, because it was the middle of the winter.
Ms. Arduin agreed to provide that information.
Senator Bishop noted that there were numerous states that
were looking into entering a class-action lawsuit, and
wondered whether Alaska was looking into that lawsuit to
help recoup some of the money.
Ms. Sanders was not aware of that information.
Co-Chair Stedman remarked that the inquiry could be given
to the Department of Law (LAW).
Senator Wilson wondered whether the money would be for only
state airports, or would there be an inclusion of the
municipal airports.
Ms. Sanders agreed to provide that information.
Co-Chair Stedman felt that there may be a future
presentation on the specific issue.
Ms. Sanders discussed item 4:
DMVA
Transfer Termed Projects Unobligated Balances back to
the General Fund Estimated to be $817.2 (Language)
Ms. Sanders highlighted item 5:
DNR
Upgrade and Repair of Critical Volcano Monitoring
Instruments
Ms. Sanders looked at item 6:
DPS
Reappropriation of Capital Projects to
Maintenance/Renovation of Rural Trooper Housing -
Estimated to be $1,059.0 (Language)
Co-Chair Stedman queried the time sensitivity of the issue.
Ms. Sanders replied that the department identified items
such as mold and broken flooring in the housing that must
be quickly addressed to meet the needs.
Senator Olson remarked that much of the housing was on
contact and rented by the state. He wondered whether it was
the state's responsibility to maintain those facilities.
Ms. Sanders agreed to provide that information.
Ms. Sanders discussed item 7:
DPS
Consolidate Multiple Capital Appropriations for Public
Safety Equipment Replacement - Net Zero (Language)
Senator Micciche noted that item 7 was a zero.
Ms. Sanders agreed that both items 6 and 7 were net zero.
9:20:11 AM
Ms. Sanders looked at item 8:
DOT/PF
Alaska Marine Highway System Vessel Overhaul, Annual
Certification and Shoreside Facilities Rehabilitation
Co-Chair Stedman requested the time sensitivity of the
appropriation.
Ms. Sanders discussed item 9:
DOT/PF
Klondike - Industrial Use Highway Funding
Senator Shower looked at item 2. He wondered why the item
was in the Supplemental Budget.
Co-Chair Stedman stated that the request would be included
in the information provided at a later date.
Senator Hoffman looked at item 3, and noted the request for
$7.645 million for phase 1. He queried the number of
phases, the timeframe, and the amounts of the remaining
phases in the program.
Ms. Sanders agreed to provide that information.
Ms. Sanders highlighted item 10:
DOA
Extension of a Lapse Date: Labor Contract Negotiations
and Arbitration Support from FY2019 to FY2022
(Language)
Ms. Sanders discussed item 11:
DOA
Centralized Office of Information Technology -
Information Services Fund Alignment with Anticipate
Expenditures
Co-Chair von Imhof assumed that the "other" was a transfer
from all the other agencies that formerly had their own
individual IT employees, and was a transfer of money
between accounts.
Ms. Sanders agreed.
Co-Chair von Imhof wondered how much of the request was new
money. She asked whether it was completely a transfer of
funds.
Ms. Sanders replied that it was not new money, rather it
was bringing their budget in line with their needs.
Ms. Sanders addressed item 12:
DEED
Repeal FY2019 State Aid to School Districts - One-Time
Funding Appropriated Outside the Formula (Language)
9:25:00 AM
Senator Olson felt that the item had caused the most
concern. He recalled one-time funding to help the school
districts. He stated that OMB had announced that they would
work collaboratively with the school district, and queried
the status of that activity.
Ms. Arduin replied that there was work with the agencies to
identify areas where there was cash available, because the
prioritization of the fiscal situation was important along
side the need for disaster response and recovery.
Senator Olson surmised that the school districts had not
been contacted by OMB as related to the specific $20
million.
Ms. Arduin replied that her office had not contacted the
school districts.
Co-Chair Stedman requested history on the timeline. He
remarked that the money was appropriated the year prior.
Ms. Arduin replied in the affirmative.
Ms. Sanders furthered that it was standard practice that
the funds were distributed.
Senator Olson surmised that, before the funds were
dispersed, the department offered the $20 million.
Ms. Arduin replied that there was work with the agencies to
identify areas where money had not been dispersed, and the
money was in that area of non-dispersal.
Senator Hoffman remarked that there was an additional $30
million for FY 20 in HB 287. He wondered whether it was the
administration's position that the $30 million one-time
appropriation would be left alone.
Ms. Arduin replied that it would be addressed on February
13 with the remaining FY 20 recommendations.
Senator Bishop felt that the school districts needed to be
contacted about the need for the money, and then talk to
the agencies.
9:30:23 AM
Senator Micciche wondered whether the districts had planned
to the dollars, and whether the districts were caught by
surprise.
Ms. Arduin replied that it was her contention that school
districts and other entities that expected money from the
state should not be anticipating spending money that had
not been allocated to them.
Co-Chair Stedman queried an explanation of the difference
between appropriation and allocation.
Ms. Arduin replied that money was appropriated to school
districts through the funding formula for FY 19, and that
money would be distributed. The proposal was money that was
appropriated outside of the formula, and had not been
distributed to districts, so it had not been allocated to
them.
Co-Chair von Imhof stressed that there were 17 agencies
that had planned their budget accordingly whatever the
timing was allocated for the cash for the full twelve
months. She noted that the budget was set in the summer,
and there was already program planning. She asked what made
education different from other agencies, and whether or not
that should be done to any agency. She understood that
there was a need to save money for the 2019 year, and noted
that education had been examined. She stressed that there
were other agencies that could be examined in the same way
as education.
Senator Hoffman recalled two bills that were passed in the
previous session, that were made into law. He felt that the
administration's position was that the law would be
followed. He recalled that the governor had specifically
focused on the law when it came to the Permanent Fund
Dividends (PFDs). He queried the difference between the
requirement of the law on dividends and the law on SB 142
and HB 287 from the previous session.
Ms. Arduin replied that appropriations were the law, until
there was a request to change them. She stated that the
administration was requesting a change in the appropriation
to the department.
Senator Hoffman wondered whether the request would be
implemented by the administration, if the legislature did
not change the law.
Ms. Arduin replied in the affirmative.
Co-Chair Stedman queried the timeframe of the execution of
the appropriation.
Ms. Arduin replied that OMB would wait for feedback through
the legislature's actions on the proposal.
9:35:07 AM
Senator Wielechowski noted that in the year prior, the
legislature had appropriated tens of millions of dollars
more for refundable oil tax credits than was owed under the
statute. He wondered whether there was an examination of
cutting those extra funds that were appropriated for oil
tax credits instead of education.
Ms. Arduin replied that the statutory required tax credits
were not met in the FY 19 budget, and only $100 million of
those were in the appropriation.
Senator Wielechowski disagreed with that interpretation.
Senator Wilson wondered whether the Department of Education
and Early Development (DEED) was expecting the school
districts to use their savings budget of a collective $130
million to help pay for some of the shortfalls.
Ms. Arduin replied that the money was appropriated outside
of the formula. The formula was fully funded for the school
year.
Ms. Sanders looked at item 13:
DEED
School Broadband Access Grant Reduction
Senator Olson stressed that broadband was extremely
important for students in the outlying areas. He noted the
low graduation rate. He wondered whether there were not
enough applications for the allocated money, and queried
the reason for the low application rate.
Ms. Sanders replied that based on the applications, it was
in excess of that. The applications received the eligible
amount.
Senator Olson requested the reason that more applications
were not received.
Ms. Sanders agreed to provide that information.
Co-Chair von Imhof wondered whether the removal of the
money would be forfeiting some federal match dollars.
Ms. Sanders agreed to provide that information.
Senator Wielechowski requested any impacts to federal
funding on the requests.
Co-Chair Stedman surmised that the request was for OMB to
provide the committee with a list of potential loss of
federal funds, because of lack of a match.
Senator Wielechowski replied in the affirmative.
Ms. Sanders highlighted item 14:
DFG
Information Technology Systems Upgrade and Maintenance
Senator Wilson looked at item 11, and wondered whether
there were other departments that had lower initial rates
that would be seen in the upcoming budget. He also asked
whether there would be additional requests from those
agencies.
Ms. Sanders replied that as there was a transition of the
Centralized Office of Information Technology, there was
work with departments to identify needs, and would return
to the committee on February 13.
9:40:49 AM
Ms. Sanders discussed item 15:
DHSS
Medicaid Federal Funding - Implementation of Tribal
Health Community Aid/Behavioral Health Aid Program
(Language)
Ms. Sanders looked at item 16:
DHSS
Medicaid Funding - FY2018 Medicaid Claims Paid in
FY2019
Co-Chair von Imhof wondered whether the supplemental of $15
million would fully fund FY 19, so the payments were not
intended to push forward to FY 20.
Ms. Sanders replied in the affirmative.
Co-Chair von Imhof looked at the $31 million of anticipated
FY 19 costs available due to the delayed implementation of
Medicaid managed care. She felt that sometimes not funding
programs caused spending money in order to save money. She
wondered whether the delay would result in the department
examining the item, and would learn more about the item in
2020.
Ms. Sanders replied in the affirmative.
Ms. Sanders highlighted item 17:
DPS
Funding for Salary Adjustments due to Classification
Action for State Troopers to Retain and Recruit
Senator Micciche assumed the second step might be seen on
February 13.
Co-Chair Stedman requested further history on the issue,
and the upcoming FY 20 budget.
Ms. Sanders stated that there had been conversations in the
previous session about the ability of the state to fill and
recruit the trooper positions. She noted that the contract
for those positions was closed, so the prior administration
worked with the union to complete a classification study
outside of the normal process. The classification study
resulted in a one-range increase for those positions, and
would have additional salary increases in FY 20 under the
agreement.
Ms. Sanders looked at item 18:
DPS
Align Village Public Safety Officer (VPSO) Program
Funding (Based on Anticipated Lapse)
9:44:59 AM
Senator Hoffman stated that item 17 and 18 were directly
related. He recalled that when the unfilled trooper
positions were addressed, the department stated that they
were unable to fill those positions because of the pay
scale. He shared that the salary structure for the VPSOs
needed to also be readdressed. He stressed that the
recruitment of the positions needed to be upscaled.
Co-Chair Stedman requested more detail about the concern.
Ms. Arduin replied that the administration was working on
recruitment and retention for troopers and VPSOs.
9:50:06 AM
Senator Bishop agreed with Senator Hoffman. He offered help
with those concerns.
Senator Shower recalled that in the previous five years,
the VPSO program had not spent more than $10.5 million, but
was funded at close to $13 million. There was an amendment
to cut the $1 million. He queried the process in examining
the history of the use of the funds within the programs.
Co-Chair Stedman further wondered why the specific number
was chosen.
Ms. Arduin replied that the current year had an examination
of what money would not be spent, despite the agency's best
efforts. She also stated that there was a lookback to
examine the areas that were consistently underutilizing the
appropriations.
Senator Shower requested data that showed that the troopers
were leaving due to the pay.
Co-Chair Stedman asked for more background for the
appropriation request.
Co-Chair von Imhof noted the "use it or lose it" potential
behavior. She pointed out that if money was not being used
was pulled from different agencies, there could be
potential ramifications of behavior by particular agencies
to spend the money to the allowable degree.
Ms. Arduin shared that the agencies had been working to
identify money that they would not be using, and to offer
the money to support the disaster response and recovery in
the supplemental budget.
Senator Olson felt it was troubling that the governor had
stated that his number one priority was public safety, but
there were budget reductions. He recalled a tragedy in his
district with the death of Ashley Barr Johnson. He remarked
that VPSO also had trouble with recruitment and retention.
He recalled that the nonprofits' hands were tied by the
state in order to use their funds. He queried the reason
for the lack of coordination for those nonprofits to use
the extra money.
9:56:23 AM
Ms. Arduin deferred to the agency, and stated that her
office did not communicate directly with those grantees.
She stated that her office had been told that the money
would not be spent in the agency.
Senator Olson wanted to know why the nonprofits could not
use the money, even with legislative intent for that issue.
Ms. Arduin replied that the agency would provide that
information.
Senator Wielechowski queried the analysis regarding other
funds that were expected to lapse.
Ms. Arduin replied that the analysis was to ask the
agencies which monies were not being used and/or would
lapse.
Senator Wielechowski surmised that this was the only item
in the entire budget that would lapse.
Ms. Arduin responded in the negative. She stated that it
was the best information provided by the agency to OMB.
Senator Shower queried the operational model within the
Department of Public Safety (DPS) to determine the split
with the VPSO.
Ms. Arduin replied that the department would follow up with
the information.
Ms. Sanders discussed item 19:
DPS
Training Academy Receipt Authority to Fully Collect
Revenue from Municipalities
DGF: $150,000
Total: $150,000
Senator Micciche recalled that the state was paying for the
academy training for the municipalities, and then the
municipalities would hire the state troopers. He noted some
cost shift as part of the effort. He wondered whether there
was an expectation of a higher number, and whether the
$150,000 was simply a difference of the 16 hours of
increased sexual assault training.
10:00:00 AM
Ms. Sanders highlighted item 20:
DPS
Align Fund Sources for the Management of Funds to
Reflect Allocation Plans
UGF: ($148,200)
Other: $148,200
Ms. Sanders discussed item 21:
DOT/PF
Projected Motor Fuel Tax Revenue Shortfall - Estimated
to be $884.9 (Language)
UGF: $884,900
DGF: ($884,900)
Co-Chair Stedman wondered whether the reason was due to an
overestimate of the amount of burnt fuel, or an exuberance
of the number used in the budget.
Ms. Arduin replied that it was an overestimate of the
amount spent, including depending upon the price of fuel.
Senator Micciche noted that the price was 8.95 cents per
gallon, so he wondered whether it was the actual amount
purchased.
Ms. Arduin replied in the affirmative, and remarked that it
was difficult to determine the exact amount of collected
fuel tax.
Co-Chair Stedman wondered whether there were any budgetary
issues between the DGF and UGF categories.
Ms. Sanders replied in the affirmative, and furthered that
it was difficult to budget when there were one-year
projected receipts.
Co-Chair Stedman queried the use of the money.
Ms. Sanders responded that the funds were for the highways
in the state.
Co-Chair Stedman wondered whether the money was for general
repair, such as pothole repair.
Ms. Sanders agreed.
Ms. Sanders looked at item 22:
DOT/PF
Whittier Tunnel Project Loan Payoff
Ms. Sanders highlighted item 23:
Debt
Updated Estimate for School Debt Reimbursement
(Language)
Senator Olson wondered how the communities were chosen for
the line item.
Ms. Sanders recalled that anticipated debt sales came in
below target, and there were larger federal subsidy amounts
available.
Co-Chair Stedman requested further information about the
specific communities.
Senator Wielechowski noted that there was a request for
departments to provide a list of funds that would not be
expended. He requested a list of the responses from the
departments about the funds that were expected to lapse in
the budget.
Ms. Arduin replied that the budget represented the list
that was received from the departments.
10:04:12 AM
Ms. Sanders addressed item 24:
Retirement
Updated Amount for the Elected Public Officers
Retirement System Benefits (Language)
Ms. Sanders looked at item 25:
Fund Transfer
Transfer Balance Large Passenger Vessel Gaming and
Gambling Tax Account to AK Capital Income Fund
(Previously transferred to the AMHS Fund) - Estimated
to be $10.1 million (Language)-
Ms. Sanders highlighted item 26:
Fund Transfer
Transfer $3 million from AMHS Fund to Information
Services Fund (Language)
Co-Chair Stedman queried the definition of the Capital
Income Fund.
Ms. Sanders replied that it was a fund set up and
designated for deferred maintenance needs.
Senator Bishop stressed that there would be another
supplemental request to repair the other vessels.
Senator Micciche wondered why $3 million was chosen out of
the $13 million total.
Ms. Sanders stated that item 25 was a $10.1 million
appropriation.
Senator Micciche looked at the component totals of $13.1
million.
Ms. Sanders stated that Senator Micciche was combining the
two items. She explained the transfer. She stated that all
the agencies provided funding available to meet the state's
needs, and there was $13.1 million available to address
deferred maintenance and the Office of Information
Technology.
Senator Micciche wondered whether there was an evaluation
on the split.
Ms. Sanders replied that it was the amount necessary for
the Information Services Fund to allow for the stair
stepping.
10:10:21 AM
Co-Chair von Imhof wondered whether the accounts were
strict on how the money could be utilized.
Ms. Sanders remarked that there was work with the agencies
to determine their individual needs.
Ms. Sanders looked at item 27:
Fund Cap
Alaska Gasline Development Corporation - Transfer $5
million back to the General Fund (Language
Senator Hoffman wondered what would occur at the end of the
fiscal year, if the $5 million was not spent.
Ms. Sanders replied that the funds would remain in the
fund.
Co-Chair von Imhof noted that there was approximately $25
million in reductions, but noted that it had not yet
addressed the full shortfall of over a billion dollars.
Co-Chair Stedman remarked that the items would be
readdressed in later meetings.
Ms. Sanders discussed item 28:
DNR
Fire Suppression Activity (Language
Ms. Sanders addressed item 29:
DOT/PF
Earthquake Response, Repair and Rebuild for State
Facilities (Language
Ms. Sanders pointed to item 30:
DOT/PF
Earthquake Response, Repair and Rebuild Multi-Year
FY19-FY20 - $65 million estimate with $6.5 million
match requirement - FHWA (Language)
Ms. Sanders addressed item 31:
Fund Cap
Capitalization of the Disaster Relief Fund (Language)
10:15:16 AM
Senator Wilson requested a list from the administration on
the use of the funds.
Co-Chair Stedman asked that the request be submitted to the
Department of Transportation and Public Facilities
(DOT/PF).
Ms. Arduin agreed to provide that information. She stated
that the information would be updated throughout the year.
Senator Micciche looked at the wildland firefighting
appropriation. He wondered whether the request would
provide money without an emergency declaration.
Ms. Sanders shared that there was work to identify the
average low for the fire suppression. The amount in the
operating budget had historically been underfunded. The
intent was to move forward with the amount necessary.
Co-Chair Stedman requested a layout of the budgetary
request in FY 19 to address oil tax credits, and what had
been and would be appropriated in FY 19.
Ms. Arduin replied that the statutory minimum requirement
for FY 19 was approximately $184 million, of which only
$100 million was appropriated.
Co-Chair Stedman requested a written response.
SB 38 was HEARD and HELD in committee for further
consideration.
SB 39 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:20:46 AM
The meeting was adjourned at 10:20 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 012919 FY19_Supplemental_Summary_1-28-19.pdf |
SFIN 1/29/2019 9:00:00 AM |
SB 38, SB 39 |
| 012919 FY2019 Supplemental Overview for SFC.pdf |
SFIN 1/29/2019 9:00:00 AM |
SB 38, SB 39 |
| 013119 Letter to Sen Finance CoChairs re companion services 012919.pdf |
SFIN 1/29/2019 9:00:00 AM |
Medicaid Services |
| 012919 to accomany response letter - FY19 Supplemental Summary.pdf |
SFIN 1/29/2019 9:00:00 AM |
Supplemental FY19 |
| 012919 OMB Response to SFC.pdf |
SFIN 1/29/2019 9:00:00 AM |
Supplemental FY19 |
| 012919 to accompany OMB response - Recruitment-Retention-Plan-Overview-2018-2023.pdf |
SFIN 1/29/2019 9:00:00 AM |
Supplemental FY19 |