Legislature(1999 - 2000)
05/06/2000 04:48 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
THIRD SPECIAL SESSION
May 6, 2000
9:05 AM
TAPES
SFC-00 3rd SS # 3, Side A
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 9:05 AM.
PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell,
Senator Al Adams, Senator Dave Donley, Senator Pete Kelly,
Senator Randy Phillips and Senator Gary Wilken were present
when the meeting convened. Senator Green arrived shortly
thereafter.
Also Attending: ALYSON ELGEE, Deputy Commissioner,
Department of Administration; ANNALEE MCCONNELL, Director,
Office of Management and Budget, Office of the Governor
SUMMARY INFORMATION
HB 3002-NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT
The Committee heard testimony from the Department of
Administration and reported the bill from Committee.
HB 3001-APPROPRIATION: EMPLOYEE SALARY & BENEFITS
The Committee heard testimony from the Office of Management
and Budget and reported the bill from Committee.
It was noted for the record that Co-Chair Torgerson chaired
this meeting on behalf of Co-Chair Parnell.
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 3001(FIN) am
"An Act making an appropriation to cover the fiscal
year 2001 monetary terms of the collective bargaining
agreements for employees of the University of Alaska
and the fiscal year 2001 salary and benefit
adjustments for university employees who are not
members of a collective bargaining unit; making
appropriations and reappropriations to cover the
fiscal year 2001 monetary terms of all executive
branch collective bargaining agreements and the fiscal
year 2001 salary and benefit adjustments for elected
officials, officers, and employees of the executive
branch who are not members of a collective bargaining
unit; making an appropriation to cover the fiscal year
2001 salary and benefit adjustments for Alaska Court
System employees; making an appropriation to cover the
fiscal year 2001 salary and benefit adjustments for
employees of the legislature and to cover the fiscal
year 2001 benefit adjustments, other than lump sum
payments, for elected officials of the legislative
branch; and providing for an effective date."
This was the first hearing for this bill in the Senate
Finance Committee.
ALYSON ELGEE, Deputy Commissioner, Department of
Administration, testified that this bill puts into statute,
the same provisions as those contained in the bargaining
agreement.
Ms. Elgee stated that this package includes a pay-out of up
to $1200 for each employee accrued at $50 per pay period
worked in the prior year. She noted that a qualifying
employee must be in active status on July 1, 2000 to
receive the payment. She added that special provision is
included to allow session employees of the legislature to
receive the payment even if not in active status on July 1.
Ms. Elgee said the package also includes a two-percent
increase effective July 1, 2001 and then a three-percent
increase effective July 1, 2002.
Ms. Elgee spoke to changes made to the governor's version
of the bill in the House of Representatives that eliminates
legislators from participation in any of the salary
increases. However, she said, legislative employees, non-
covered employees of the executive branch and judicial
employees are covered.
Ms. Elgee continued pointing out that the committee
substitute also increases the employer contributions for
health coverage for non-covered state employees.
Senator Adams offered a motion to move from Committee CS HB
3001 (FIN) am. There was no objection and the bill MOVED
from Committee.
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 3002(FIN)
"An Act setting the compensation and certain benefits
of certain public officials, officers, and employees
not covered by collective bargaining agreements; and
providing for an effective date."
ANNALEE MCCONNELL, Director, Office of Management and
Budget, Office of the Governor, testified that because of
the confusion over the listing of salary and benefits
provisions, changes were made to separate each branch of
government and list their amounts individually. She
detailed the committee substitute adopted by the House of
Representatives.
Section 1 - Outlines the amount needed to cover all
the collective bargaining agreements for the executive
branch and the salary and benefits adjustments for the
non-covered state employees. This equals $20.3 million
total funds for the executive branch. Funding sources
are listed on page three.
Ms. McConnell pointed out that the general fund portion of
the legislation is covered by various reappropriations and
utilizes other savings as outlined later in the bill.
Section 1(d)(2) - Appropriates money into the marine
highway system fund to cover that agency's portion of
the increased costs.
Section 2 - The court system totals over $1.1 million,
all of which is general funds.
Section 3 - The University of Alaska totals $6.4
million, of which over $5.1 million is general funds.
Ms. McConnell noted that part of the increases for
University employees is already covered in the University's
$16.9 million budget request for FY 01. She added that this
language includes employees covered in bargaining units and
non-covered university employees.
Section 4 - The legislature totals $634,000 general
fund and provides that the lump sum payments only are
paid to legislative employees and not to legislators.
Section 5(a) - these items list the remainder of funds
needed to cover the executive branch and non-covered
employees increases.
Subsections 1 through 7 - Remaining balances from
the Department of Environmental Conservation water and
sewer projects already completed that equal $150,000.
Ms. McConnell commented that this reappropriation takes no
money from any project, and that the funds would typically
be available for reappropriation to other projects.
Subsection 8 - Balance of $107,000 of capital
appropriation for emergency housing originally Alaska
Housing Finance Corporation (AHFC) corporate receipts
that lapse at the end of the year.
Section 5(b) - Various miscellaneous appropriations
and reappropriations.
Subsection 1 - The remaining $52,000 of the K-12
foundation formula from the current year.
Ms. McConnell recalled there was an approximate $14 million
lapse balance, which the legislature appropriated all but
$52,000 for various purposes.
Subsection 2 - Unused funds requested in the FY
00 supplemental budget to cover increased fuel prices
for the Department of Transportation and Public
Facilities equaling $82,000.
Ms. McConnell explained that when the additional funds were
appropriated, the fuel prices had raised dramatically.
However, she stated, the gasoline prices have been reduced
somewhat and ten-percent of the entire $820,000
appropriation was not needed.
Section 5(c) - Investment Loss Trust Fund, further
releases totaling $4,055,600, which would clear out
the fund.
Ms. McConnell relayed that it was previously projected
there would be $2.3 million available for release from this
fund, most of which had already been appropriated through
the budget process to the Department of Transportation and
Public Facilities and other agencies. She stated that the
Department of Law had subsequently identified additional
claims against the fund that the courts could release in
the new few months, which in turn allow the reserves to be
released.
Section 5 (d) - Fish and Game Source
Subsections 1 through 5 - The capital items
Subsections 6 and 7 - conforming language
Subsection 8 - completes the transaction of the
fish and game funds into the general fund for the
purpose of funding the employee contracts.
Ms. McConnell reminded the Committee of the capital budget
deliberations where commercial fisheries entry commission
receipts were used in order to fund certain deferred
maintenance projects within the department. She noted a
balance of $900,000 remained in the fund after the
appropriations. She explained that these funds would be
used to replace general funds used for the deferred
maintenance projects, thus freeing up general funds for the
employee contracts.
Section 5(e) - Medicaid Pro-Share appropriates
$8,148,600 statutory designated program receipts
through the complicated program.
Ms. McConnell shared that the Office of Management and
Budget has had recent success in persuading hospitals to
participate in the Medicaid Pro-Share program.
Section 5(f) - Longevity Bonus Program remainder of
$1.4 million fast-track supplemental appropriation
amounting to $818,000.
Ms. McConnell reminded the Committee of the legislature's
intent to fully fund the longevity bonus program with lapse
funds from the Y2K readiness project. She noted that an
additional general fund appropriation was made to cover any
shortfall of Y2K funds. She stated that it was estimated
that $1.4 million general funds would be necessary, however
there were more Y2K funds lapsed than anticipated and only
$612,000 general funds were utilized.
Section 5(g) - Debt Service Offset incorporates the
final debt reimbursement amounts submitted by school
districts, which are $2 million lower than projected.
Ms. McConnell added that with higher than projected
revenues from the tobacco tax to appropriate to school debt
reimbursement, the total reduction to the general fund
appropriation is $4 million.
Section 5(h) - Establishes immediate effective dates
to ensure implementation this fiscal year.
Senator Phillips asked why the additional savings using the
Medicaid Pro-share funding source was not identified during
the normal budget process.
Ms. McConnell replied that the pro-share program has been
"enormously complicated" and that the process has been
expedited for implementation in 2001. She noted that
portions of the program have taken effect already, thus
increasing the savings. She added that the entire
supplemental budget appropriation for Medicaid was not
needed due to the implementation of this program and that
further savings could still be realized after final
determinations are made on June 30, 2000. She admitted that
it has been known there would be savings, but that the
amount of savings is still in question.
Senator Phillips next asked if the administration planned
for any supplemental requests to the FY 01 budget for items
other than forest fires and emergencies. He feared that
after these employee contracts are funded using the various
funding sources, the administration would submit many
requests for general funds to make up the shortfall.
Ms. McConnell responded that compared to the previous year,
formula programs more completely funded and would therefore
not require supplemental appropriations. She added that
Medicaid expenses cannot be precisely anticipated, and that
the costs range from $400,000 to $4 million
Senator Green referred to the language on page 6, lines 25
through 27, "The sum of $634,000 is appropriated from the
general fund to the legislature for salary and benefit
adjustments for legislators and employees of the
legislature for the fiscal year ending June 30, 2001." She
understood the legislators would not receive a salary
increase and but wanted to know if there would be a benefit
adjustment.
Ms. McConnell replied this language relates to changes in
health benefits but not the actual salary of legislators.
Senator Adams offered a motion to report CS HB 3002 (FIN)
am from Committee. Without objection, the bill MOVED from
Committee.
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ADJOURNED
Senator Torgerson recessed the meeting to the call of the
Chair at 9:26 AM.
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