Legislature(2005 - 2006)SENATE FINANCE 532
04/05/2006 04:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB365 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 365 | TELECONFERENCED | |
MINUTES
SENATE FINANCE COMMITTEE
April 5, 2006
4:41 p.m.
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately
4:41:06 PM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: GINGER BLAISDELL, Staff to Co-Chair Green;
JANET CLARKE, Assistant Commissioner, Department of Health and
Social Services; JAMES ARMSTRONG, Staff to Co-Chair Wilken; EDDY
JEANS, Director, School Finance Division, Department of
Education and Early Development; LUCKY SHULTZ, Staff to Senator
Dyson; LYNNE SMITH, Staff to Senator Bunde;
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
HB 365-APPROP: OPERATING BUDGET/LOANS/FUNDS
The Committee heard reports from the budget subcommittees, the
Department of Health and Social Services, and the Department of
Education and Early Development. The bill was held in Committee.
4:41:21 PM
CS FOR HOUSE BILL NO. 365(FIN) am(brf sup maj fld)
"An Act making appropriations for the operating and loan
program expenses of state government, for certain programs,
and to capitalize funds; making appropriations for state
aid to public schools, centralized correspondence study,
and transportation of pupils; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken announced the chairs of the Senate Finance
budget subcommittees would overview the actions of each
subcommittee referencing the written recommendations and
spreadsheets [copies on file] depicting appropriations and
allocations of general funds (GF), other funds, and all funds,
as well as position counts. A proposed committee substitute, SCS
CSHB 365, 24-GH2033\P, contains some changes to the subcommittee
reports, which he would point out as the meeting progressed.
4:42:58 PM
Co-Chair Wilken explained this committee operated under
guidelines intended to preclude increased spending over the
previous year. These include the establishment of no new
programs, no automatic "backfill" to adjust for reduced federal
or other non-GF appropriations, and no significant expansion of
current programs.
4:43:53 PM
Co-Chair Wilken appreciated the subcommittees' work to attain a
"responsible and sustainable" budget.
4:46:38 PM
Department of Health and Social Services Budget Subcommittee
Senator Lyda Green, Chair
Senator Ben Stevens
Senator Gary Stevens
Senator Bettye Davis
Co-Chair Green outlined two spreadsheets and the subcommittee
recommendations, which include intent language. In keeping with
the Committee's goal of containing budgetary increases, she
indicated which requests the subcommittee recommends receive
full funding, and identified the fuel and utility expenses that
would be deferred to separate legislation. She noted the
subcommittee attempted to facilitate all priorities discussed
with the Department.
4:48:57 PM
GINGER BLAISDELL, Staff to Co-Chair Green, reported one change
between the subcommittee closeout and the proposed committee
substitute. The technical adjustment of $7,900 was a fund source
change.
4:49:42 PM
Co-Chair Wilken noted the indicated changes were listed on the
subcommittee narrative that would be distributed, and the
changes would be included in the amended committee substitute.
4:50:20 PM
Co-Chair Wilken remarked this Department has a "big budget" to
review in a limited time. He requested any identified or
overlooked issues be brought to his attention.
4:50:40 PM
Senator Hoffman asked for clarification of the decision to fund
front line social workers at 50 percent while waiting for a
court ruling.
4:51:02 PM
Ms. Blaisdell directed attention to page 3 of the narrative,
where the effect of the Rosales case is briefly described. The
Rosales reversal is a ruling of the Ninth Circuit Court of
Appeals that resulted in a reduction of federal funding for
foster care services. The State has been paying for foster care
at the higher level, but may be required to pay more when the
final ruling is issued. Funding levels would be adjusted at that
time.
4:52:03 PM
Senator Hoffman asked when the ruling would be issued.
4:52:09 PM
Ms. Blaisdell was unsure of the date.
4:52:14 PM
Co-Chair Green pointed out that the Rosales reversal has at
least two additional implications, which are impacted by the
loss of federal funds.
4:52:29 PM
JANET CLARKE, Assistant Commissioner, Department of Health and
Social Services, reported the Ninth Circuit Court of Appeals
actually ruled in favor of western states and allowed states to
claim more federal Title IV-E funds for foster care services.
The change occurred in the Deficit Reduction Act. In that act,
Congress rolled back the Ninth Circuit decision for the entire
country, however the federal government has yet to determine how
to administer the new provisions. Less federal funds would be
available, and the Department is waiting for the new rules to
determine the amount of the reduction.
4:53:47 PM
Co-Chair Green reminded that in the previous year's budget
process the Department incurred increases, including salaries,
retirement system obligations, and other fixed costs, that are
included in this budget recommendation. She felt the current
appropriation for this Department was "generous".
4:54:19 PM
Department of Corrections Budget Subcommittee
Senator Lyda Green, Chair
Senator John Cowdery
Senator Gary Stevens
Senator Kim Elton
Ms. Blaisdell informed that the change between the subcommittee
closeout and the proposed committee substitute was in response
to a concern expressed by the Department about the need to
address overcrowding in a safe manner. To alleviate some of the
overpopulation issues facing Alaska correctional facilities,
$693,300 in general funds is recommended to be added to out-of-
state contractual services. This allocation would fund an
increase in beds in the Arizona prison contract from 868 to 900.
Some savings were achieved by not increasing the number of beds
to 1,000 as originally requested.
4:55:44 PM
Co-Chair Wilken asked if any item in the Corrections budget
warranted special attention as a significant increase or
decrease.
4:55:55 PM
Ms. Blaisdell referred Committee members to page 3 of the
narrative. A reduction of $2,451,300 was achieved by closing the
Parkview Community Residential Center (CRC). Two other nearby
CRCs could absorb these short-term inmates.
4:57:01 PM
JAMES ARMSTRONG, Staff to Co-Chair Wilken, noted that a request
for $693,300 for the Arizona contract facility was included in
the committee substitute, in addition to the subcommittee
recommendation.
4:57:26 PM
Department of Transportation and Public Facilities Budget
Subcommittee
Senator Lyda Green, Chair
Senator John Cowdery
Senator Charlie Huggins
Senator Al Kookesh
Co-Chair Green expressed that the subcommittee and the
Department worked together to prioritize projects, and the
resulting recommendations were close to the requested budget.
The issue that continues to require the most work and
consideration is the Alaska Marine Highway System (AMHS). The
subcommittee proposed that AMHS increases be funded at 89
percent, which would create a $2 million savings from what was
requested. "Large sums" were allocated for rural airports,
maintaining funding, and operational costs for snow buildings
and other highway needs in the subcommittee report.
4:59:01 PM
Mr. Armstrong identified changes in the proposed committee
substitute. Oil/hazardous fund monies would be used to replace
$825,000 GF in the Central Region. For the Northern Region,
airport administration would be reduced nearly $400,000, for
savings reflected in international airport funds. Fuel inflation
costs of approximately $4.2 million were added for the AMHS
marine fuel.
4:59:43 PM
Senator Stedman asked for more information on the fuel
adjustment provision.
4:59:55 PM
Co-Chair Wilken responded that the proposed committee substitute
incorporates the actions of the House of Representatives. A
trigger is included that would engage October 1st and April 1st
to compare Alaska North Slope (ANS) price. He estimated the
trigger price to be $58.50. If the ANS price is $58.50 or more
on either date, an additional $12 million would be appropriated
for fuel. This allocation would be distributed across agencies.
5:00:45 PM
Mr. Armstrong located the trigger price in subsection (b) of
Section 20. OFFICE OF THE GOVERNOR., on page 59, line 30 through
page 61, line 9 of the proposed committee substitute.
5:01:31 PM
Co-Chair Wilken explained that increases for fuel and utility
costs would be distributed to all agencies using the same
formula.
5:01:46 PM
Co-Chair Wilken noted the relation to the AMHS fuel increases.
5:01:51 PM
Senator Stedman commented that the AMHS, in addition to other
state agencies, have struggled with fuel adjustments. He opined
that prices don't seem to be getting lower.
5:02:08 PM
Co-Chair Wilken recognized the increased fuel costs to the
State. He indicated the issue would be addressed further in
Power Cost Equalization (PCE) discussions.
5:02:21 PM
Co-Chair Wilken affirmed AMHS would be funded at 89 percent of
their requested amount, and understood this would affect cross-
gulf travel. He suggested having the Senate Finance or another
legislative committee perform an oversight of the AMHS. He
expressed concern that next year could witness expanded costs
not currently anticipated. If costs are to be contained, a
collaborated effort is needed between the legislature and the
Department. Co-Chair Wilken disclosed that he and others have
been told that the marine highway system is in decline and
cannot continue in its current fashion.
5:03:50 PM
Alaska Court System Budget Subcommittee
Senator Lyda Green, Chair
Senator Ralph Seekins
Senator Gretchen Guess
5:04:36 PM
Co-Chair Green informed that the narrative has a listing of the
recommended items to be funded, including life cycle replacement
of computer systems, increased utility costs, increases in
position pay based on increased caseload, increased operational
costs for courthouses, and computer software. The subcommittee
is again asking that the judicial branch collaborate with the
Office of Management and Budget to bring missions and measures
in compliance as requested the previous year.
5:06:05 PM
Ms. Blaisdell identified differences between the increments in
the governor's requested budget and the budget the subcommittee
passed. The Alaska Court System provided the subcommittee a
priority list, from which specific items were funded.
5:06:34 PM
Senator Bunde asked the total amount of cost overruns of the
Public Employees' Retirement System (PERS) and Teachers'
Retirement System (TRS). He hears from constituents that the
existing system should be repaired, rather than proceeding with
the implementation of the new retirement system. He requested
the total impact of retirement obligations to the budget.
5:07:20 PM
Co-Chair Wilken recalled the total was $105 million.
5:07:47 PM
Senator Stedman interjected that the $105 million would cover
this year's incremental increases. However, the State would
still be short approximately $205 million from the amounts the
actuary recommends the contribution to be for municipalities,
schools and the State. The State has still not reached the
proper contribution amount.
5:08:27 PM
Co-Chair Wilken understood that the sum needed to reach the full
contribution level as determined by the actuaries would be $105
million allocated plus an additional amount in excess of $200
million for a total of over $300 million.
5:08:44 PM
Senator Stedman responded that calculation was correct, for this
year.
5:08:48 PM
Senator Hoffman inquired to the health, life, safety issue at
the Bethel Courthouse. Additional security was requested for the
courthouse but was not included in this budget, and he asked how
this project was ranked in the Department's priorities.
5:09:19 PM
Ms. Blaisdell did not have the briefing on hand, but believed no
specific request was made for the Bethel Courthouse independent
of general security requests.
5:09:38 PM
Co-Chair Green remarked the budget does contain an increase for
the cost of the Bethel lease.
5:09:45 PM
Senator Hoffman indicated he would research the issue.
5:09:50 PM
Co-Chair Wilken stressed the proposed committee substitute
includes funding for all fixed costs identified in the
Governor's proposed budget. Fixed costs include expenses such as
pay increases, PERS and TRS responsibilities, health costs, and
risk management, and comprise a significant increase, about half
of the budget. He recalled serving during years when such cost
increases were not automatically accepted.
5:10:36 PM
Department of Environmental Conservation Budget Subcommittee
Senator Gary Wilken, Chair
Senator Gene Therriault
Senator Johnny Ellis
Co-Chair Wilken communicated the Governor requested $17.954
million for the Department, and the subcommittee proposed
funding it at $16.193 million. An initial request of funding for
13 positions to begin to assume primacy for the public drinking
water was funded at five positions over a three-year period, and
funding would continue as the State assumes primacy from the
federal government.
Co-Chair Wilken recounted that the Oil and Hazardous Substance
Release Prevention and Response Fund (470 Fund) was quickly
depleting. The subcommittee hoped the proposed PPT legislation
would begin to replenish the fund. In the meantime, the
Department had used the commercial vehicle compliance fund as a
substitute. Co-Chair Wilken hoped the "traditional" 470 fund
would be back in use by 2008.
5:12:30 PM
Mr. Armstrong spoke to the vehicle inspection and maintenance
requirement (I/M) programs. He explained the subcommittee
followed through on the intent of the Committee the previous
year, which was to reduce funding by 50 percent. The programs
were implemented with funding from the federal Congestion
Mitigation and Air Quality (CMAQ) program. CMAQ funds were
exhausted by 2006 and the State funded the program fully last
year at $295,000. In keeping with the intent of the Committee,
the program would receive 50 percent funding in this budget,
totaling $147,700.
5:13:21 PM
Co-Chair Wilken cited Anchorage and Fairbanks as the only cities
affected by the changes. He reminded members that the State gave
notice in 2003 that those cities would gradually assume
responsibility for funding their own I/M programs.
5:13:52 PM
Senator Bunde asked whether the I/M programs were a State or
federal mandate.
5:13:58 PM
Co-Chair Wilken believed it was a federal requirement.
5:14:01 PM
Mr. Armstrong responded that I/M programs were initially funded
in the Anchorage Metropolitan Area Transportation Solutions
(AMATS), with three years of federal CMAQ funding. When the
three-year period expired, the programs needed assistance from
the State to continue to operate. He anticipated the I/M
programs would soon be unnecessary as the majority of vehicles
in operation are newer and cleaner.
5:14:42 PM
Senator Bunde inquired if cities have the option to reduce or
eliminate the requirement for the I/M testing programs.
5:14:53 PM
Mr. Armstrong replied in the negative. He answered that cities
would have to engage the Environmental Protection Agency (EPA)
to revisit the statewide air improvement program and certify
that the vehicles in Anchorage and Fairbanks were "clean" enough
to dismantle the I/M programs. The cities are not yet to that
point.
5:15:11 PM
Senator Bunde understood the program was a State mandate.
Mr. Armstrong advised it was a federal mandate.
5:15:25 PM
Department of Education and Early Development Budget
Subcommittee
Senator Gary Wilken, Chair
Senator Gary Stevens
Senator Bettye Davis
Co-Chair Wilken expressed that the subcommittee report reflects
a $90 million increase to K-12 funding allocated in other
legislation. The increase is included in the totals, but not
included as line items, and mirrors the actions of the House of
Representatives.
Co-Chair Wilken acknowledged concerns surrounding the funding of
the successful teacher mentoring program. While federal funds
have "disappeared", the subcommittee was able to fund the
program at $2.5 million with $600,000 in interagency (I/A)
receipts from the Department of Education and Early Development,
and $1.9 million from the Alaska Student Loan Corporation
dividend. Other funding sources were still being explored. Were
the full amount of approximately $4 million required to fully
fund the program not secured, reductions would be required to
eliminate the school principal mentoring portion of the
mentoring program.
5:17:04 PM
Co-Chair Wilken spoke to the Alaska Challenge Youth Academy, and
informed that the Governor's request had been fully funded in
the subcommittee report. He reminded members that in 2003 the
Committee had linked the Academy to the education foundation
funding formula with the intent to stabilize spending. He
revealed that the Academy's costs have increased faster than
other schools, and their increases have outpaced the adjusted
student dollar. The issue would be addressed during the
legislative interim, and may require statute changes. He noted a
$289,000 decrement due to adjusted student enrollment.
Co-Chair Wilken indicated a small increase of $9,000 for the
Council on the Arts, and commented that the remainder of the
budget was funded as requested.
5:18:36 PM
Senator Bunde directed attention to page 3 of the subcommittee
spreadsheet, which lists the (Washington, Wyoming, Alaska,
Montana, Idaho) WWAMI Medical Education program. He questioned
why a program that is administered by the University would be
included in the Department of Education and Early Development's
budget.
5:18:54 PM
Co-Chair Wilken was unsure.
Senator Bunde remarked it is a very expensive program.
5:18:57 PM
EDDY JEANS, Director, School Finance Division, Department of
Education and Early Development, responded the WWAMI program is
a contract administered though the Alaska Commission on
Postsecondary Education, which is part of the Department's
budget.
5:19:27 PM
Senator Bunde understood the University budget contained
approximately $800,000 for the ten students who participate in
the program, and wondered if the additional monies were for
administration of the contract.
5:19:48 PM
Mr. Jeans would investigate.
5:19:59 PM
Senator Bunde asserted that the ten students who participate in
the program could be sent to schools out-of-state for a fraction
of the cost of this program.
5:20:21 PM
Senator Hoffman asked the number of positions within the
statewide mentoring program at the time the program was funded
at the original level of $5 million, and whether the proposed
reduction was reflected in the total number of positions or just
the contracted dollars.
5:20:49 PM
Co-Chair Wilken replied that all services are contracted for
current and inactive teachers and principals. He estimated
approximately 30 participants are involved in the program.
5:21:04 PM
Senator Hoffman inquired how would Department would reconcile
the proposed funding level with the original program plan.
5:21:21 PM
Mr. Jeans responded that the program would be scaled back.
School districts apply to participate in the program, and the
amount of funding would determine the allowable level of
participation.
5:21:42 PM
Co-Chair Wilken advised of the possibility of securing
additional funding, though the program would still be short of
the $5 million requested.
5:21:54 PM
Co-Chair Green asked whether a local school district could
participate by incurring the costs for the mentor.
5:22:05 PM
Mr. Jeans explained the subcommittee had discussed that issue,
but had not been able to devise a solution.
5:22:22 PM
Co-Chair Wilken relayed that district participation is an option
and should remain an option.
5:22:29 PM
Co-Chair Green opined it should be encouraged.
5:22:34 PM
Senator Bunde recognized many suggestions as to how local
districts should assist in funding educational programs. He
referred to the Governor's requested 18.4 percent increase,
compared to the subcommittee's recommended 15 percent increase.
He calculated an approximate 30 percent increase over four
years, and asked for verification.
Co-Chair Wilken cited a 38 percent increase since 1999.
5:23:19 PM
Mr. Jeans assessed the increase in the base student allocation
at 33 percent, including the Governor's request in the current
budget.
5:23:28 PM
Senator Bunde estimated the increase to be approximately 30
percent, as the subcommittee did not recommend full funding of
the Governor's request.
5:23:32 PM
Co-Chair Wilken identified the "big difference" as the change to
the mentoring program.
5:23:48 PM
University of Alaska Budget Subcommittee
Senator Bert Stedman, Chair
Senator Gary Wilken
Senator Lyda Green
Senator Con Bunde
Senator Fred Dyson
Senator Donny Olson
Senator Lyman Hoffman
Co-Chair Wilken stated that the subcommittee recommended full
funding of $19 million for the University's fixed costs, which
was included in the Governor's total requested increase of $41.7
million. The subcommittee made reductions of approximately $7.4
million from the Governor's requested budget, and recommended
funding all other increases at a total of $15.2 million. The
report did not fund the UA Scholars Program, and allocated
reductions across the line items presented by the University.
Funding reductions were also made for the Competitive University
Research Investment-Infrastructure in Anchorage, Fairbanks and
Juneau.
5:25:32 PM
Mr. Armstrong noted a $2 million request for increased fuel
costs was also denied.
5:25:41 PM
Senator Stedman recounted that the University presented its
fixed costs at $29.9 million, while the Governor and Legislative
Finance Division set the fixed costs at $26.7 million, for a
$3.27 million difference. All salary increments were included in
the Governor's requested budget, which differed from the
subcommittee's recommendation. The subcommittee operated under
guidelines to curb spending increases, yet 103 new positions
were requested, a 2.5 percent increase over the previous year's
budget. The Governor's budget also included a request for $10
million to fund new programs, which Senator Stedman would review
further. He expressed, "we all support the University" and the
measures it is taking to respond to upcoming large capital
projects by increasing the State's workforce.
5:27:46 PM
Department of Public Safety Budget Subcommittee
Senator Fred Dyson, Chair
Senator John Cowdery
Senator Hollis French
Senator Gene Therriault
5:28:17 PM
Senator Dyson reported that, at the Chair's direction, the
subcommittee did not fund fuel cost increments, as separate
legislation to address fuel needs was forthcoming. Discussions
with the Department revealed recruitment and retention
difficulties within the Village Public Safety Officers (VPSO)
and Village Safety Aides (VSA) programs. While recruitment
efforts were made, vacancies remained, and $4 million in federal
funds had not been utilized. In the three years prior,
approximately $1.5 million in general funds had lapsed.
Senator Dyson relayed that the subcommittee investigated the
VPSO program's situation and learned the federal funds are
applicable to the current budget, and are adequate to fund the
VPSO positions, including pay raises authorized several years
prior, as well as training expenses for new recruits. Therefore,
the subcommittee recommended against funding the GF request.
5:30:07 PM
Senator Dyson identified the Alaska Public Safety Information
Network (ASPIN) as a "very important" program that warranted
full funding. The proposed committee substitute also fully funds
the criminal records request. He understood that federal Byrnes
Justice Assistance Grant (JAG) monies would likely be available
for that program.
5:30:50 PM
Senator Dyson noted the subcommittee recommended funding a
request for the Alaska State Troopers for its activities related
to the court system, either transporting prisoners or providing
security.
5:31:11 PM
Senator Dyson highlighted the Council on Domestic Violence and
Sexual Assault (CDVSA) as a "significant" component of the
budget that may require more discussion. CDVSA anticipated $1
million in Temporary Assistance for Needy Families (TANF) funds.
The Subcommittee recommended authorization for receipt of those
funds. He also noted the Council's director communicated that $5
million in federal funds would likely be available to the CDVSA
at the end of fiscal year. Therefore, the subcommittee did not
recommend authorization of the full general fund request.
5:32:16 PM
LUCKY SHULTZ, Staff to Senator Dyson, affirmed. With the
expectation of receipt of federal funds, the Council's general
fund request was reduced $500,000 in the proposed committee
substitute.
5:32:40 PM
Senator Dyson understood the domestic violence shelter located
in Kotzebue was recently added to the responsibilities of the
Department, and an alternate funding source was anticipated in
the near future. The subcommittee recommended a reallocation of
$250,000 from within the Department's budget to maintain the
facility's operations. The commissioner indicated this fund
transfer would be acceptable.
5:33:43 PM
Senator Olson asked if the reallocation would be sufficient to
"keep the doors open" at the Kotzebue shelter.
5:34:04 PM
Senator Dyson responded that the amount specified would be
adequate.
5:34:09 PM
Senator Olson questioned the justification for the establishment
of the VSA program, which is a new program and not in compliance
with the Committee's budgetary guidelines.
5:34:28 PM
Senator Dyson remarked that the commissioner communicated to him
that this is not a new program but a different way of
approaching the VPSO vacancies. The VSA program allows public
safety aides to have a presence in villages while the
recruitment and training efforts for officers continue. It is a
"new approach at the same goal" of village safety.
5:35:09 PM
Senator Olson inquired as to the actions of the House of
Representatives with regards to the funding of the Kotzebue
shelter.
5:35:25 PM
Senator Dyson replied that the subcommittee was not instructed
to mirror the actions of the other body, and funding source
differences would likely be resolved in a conference committee.
5:35:43 PM
Senator Olson asked how the general fund would be impacted.
5:35:48 PM
Senator Dyson recalled the budget recommendations from the
Senate subcommittee contained less GF money than the House of
Representatives' version.
5:35:56 PM
Senator Hoffman disagreed with the manner in which the Committee
was addressing the reduction to the VPSO program. He suggested
other means to address turnover, including concentrating
recruitment efforts toward graduating high school students, and
increasing salaries to retain existing VSPOs. While salaries
were adjusted recently, he still considered them "low", and
proposed using the lapse funds to increase officer compensation.
He voiced that the residents of communities with severe public
safety problems would not agree that the actions of the
subcommittee are "moving in right direction".
5:37:18 PM
Co-Chair Green shared that when she was approached with the
funding request for the Kotzebue shelter, she agreed to include
it in the budget for one year only. In subsequent budgets, it
would be treated as all other shelters and not funded
separately.
5:37:58 PM
Co-Chair Green continued that the State has, in years past,
received large amount of federal funds through the TANF program.
TANF was established as a part of the federal welfare reform
plan, and the State was granted numerous high performance
bonuses as the number of welfare participants declined each
year. Under the Deficit Reduction Act, TANF was reauthorized,
but funding for future high performance bonuses was eliminated.
The State's status is being reviewed, and if it is determined
that the State did not reach the high performance level, bonus
monies must be refunded to the federal government. For that
reason, TANF funds are not used in the current budget, and the
fund source for the CDVSA may be at risk.
5:39:42 PM
Co-Chair Wilken directed staff to research the issue further.
5:39:53 PM
Senator Olson asked the amount of funding involved in the
pending TANF decision.
5:40:00 PM
Co-Chair Green quoted the current balance as $4,380,000.
5:40:08 PM
Senator Olson asked of the possible repercussions.
5:40:13 PM
Co-Chair Green answered that the State would have to return the
money to the federal government. She noted that the State had
been granted flexibility in the use of TANF performance bonuses,
and they had been expended on a variety of increments over the
years.
5:41:01 PM
Mr. Armstrong pointed out that in the committee substitute the
House of Representatives version of the bill provided "backfill"
to fund the Byrnes grants in the "language" section, and the
Senate subcommittee took the same action in the "numbers"
section, so those funds were "double counted" in the bill. A
forthcoming amendment would correct that oversight.
5:41:33 PM
Department of Military and Veterans Affairs Budget Subcommittee
Senator Fred Dyson, Chair
Senator Charlie Huggins
Senator Johnny Ellis
Senator Dyson reported that the subcommittee collaborated with
the Department and arrived at a recommended budget approximately
$1.5 million lower than the Governor's request. The report did
not address increased fuel costs, as forthcoming legislation
would speak to that issue. The proposed committee substitute did
not fund the Local Emergency Planning Committee (LEPC), a
component the commissioner identified as "important", with the
anticipation that the LEPC would be funded from the "470 fund"
when it was replenished.
Senator Dyson continued that a $25,000 request for educational
benefits was recommended not to be funded. While discussions
have transpired with the University of Alaska regarding free
tuition for guardsmen, questions remain whether guardsmen who
wish to continue their education are fully utilizing their GI
bill funds.
5:43:12 PM
Senator Dyson stated a $122,500 request for the Office of the
Commissioner was recommended to begin funding the Adjutant
General Association of the United States (AGAUS) Conference in
June 2007. He predicted funds generated from the conference
would far surpass the allocation in the proposed committee
substitute, and had recommended the $122,500 be returned to the
general fund, and additional funds be used to offset
supplemental requests or be relapsed to the general fund when
received.
5:44:02 PM
Department of Administration Budget Subcommittee
Senator Fred Dyson, Chair
Senator Kim Elton
Senator Charlie Huggins
Senator Dyson summarized the subcommittee's recommended budget
appropriated approximately $5.7 million less in general funds
than the Governor's requested budget.
5:44:44 PM
Mr. Shultz informed that a $3,557,000 request for the Office of
the Commissioner's enterprise technology services was not
addressed in the Department's report, and would instead be
included in the language section. Labor relations requests of
$200,000 for labor negotiations and $112,000 for increased
arbitration and arbitration costs were funded at $56,000 total
in the proposed committee substitute. While Capital Improvement
Project (CIP) funds had dwindled, and the Department had seen
increased arbitration, the subcommittee concluded the costs
would not be as great as anticipated.
5:45:40 PM
Mr. Shultz told that the Department requested $2 million for
PERS/TRS, part of which was to be used to educate employees
about the new retirement program instituted by the passage of SB
141. The Legislative Finance Division pointed out that
"education" was provided for in the original legislation the
previous year. Therefore, that portion of the request was not
funded in the proposed committee substitute. However, the State
is mandated to match any contributions by an employee changing
to new program, and this must be done with new funds, not funds
transferred from the older retirement system. He anticipated the
"matching" language would be resolved by a conference committee.
5:46:38 PM
Mr. Shultz spoke to the funding request to address two non-
public buildings. The Department was unable to collect
interagency receipts for these buildings, and was asked by the
legislature the prior year to submit general fund requests for
non-public buildings projects separately. Maintenance and
operations costs could then be paid for through interagency
transfers. This would give the non-public buildings staff more
accountability for maintaining those facilities.
Mr. Shultz continued, informing that those agencies failed to
request funds and subsequently the Department could not collect
I/A receipts and had to absorb the costs. The Department
requested funds in the current budget to cover the expenses of
the non-public buildings, but that request was denied by the
subcommittee in an attempt to force the non-public buildings to
make their own general fund requests and increase
accountability.
5:48:03 PM
Mr. Shultz cited the enterprise technology services request was
approximately $1.8 million, $1.7 million of which is required to
secure federal matching grants. The subcommittee recommended
funding $1.7.
5:48:18 PM
Mr. Shultz explained that administration of the Alaska Land
Mobile Radio (ALMR) contract has been transferred from the
Department of Military and Veterans Affairs to the Department of
Administration. The subcommittee recommended reducing the GF
allocation for maintenance and operations by $63,100 because the
completed project was anticipated to be less expensive to
administer than it was during construction.
5:48:54 PM
Senator Dyson admired the commissioner's commitment to fund
departmental costs during the budget process, rather than
presenting major operational requests in the supplemental
budget. He aligned himself with the commissioner's view that
funding public defenders and the Office of Public Advocacy (OPA)
is not only a constitutional requirement, but a priority to
assist indigent persons. To support this effort, the first of
two increments requested by the Department and the Governor to
increase funding for the Public Defenders Agency (PDA) and OPA
received a recommendation for funding. These agencies cannot
control the number of clients they have, as they must service
all individuals who meet the eligibility requirements. Steps
have been taken to reduce the expensive contract services by
doing more work "in house", and the recommended increment would
assist in these efforts.
Senator Dyson informed that the second request was not included
in the proposed committee substitute, as it would necessitate a
reduction in funding for public broadcasting. The proposed
committee substitute would fully fund public radio, and reduce
the GF monies by approximately 25 percent. He specified a
reduction of less than $200,000 from a total budget of
approximately $18 million.
5:51:24 PM
Co-Chair Wilken referenced "numerous" discussions between
himself, Senator Dyson, and Department officials, and considered
this budget an issue of "priorities". It was difficult to deny
the increase to OPA and PDA, as the missions of those agencies
were respectable. Another priority, however, was public
broadcasting. A forthcoming amended committee substitute would
reflect a $1,052,200 increase for public broadcasting, a figure
that represents 100 percent of the requested amount for public
radio and 75 percent for public television. Funding was
identified within the Department.
5:52:48 PM
Co-Chair Wilken commented, for the benefit of future Finance
Committee members, that he had witnessed a great deal of support
for public radio, and a declining level of support for public
television. He questioned the need for public television. If
others believed that assumption was wrong, he suggested public
television officials endeavor to change public opinion. He
characterized his comments as "constructive criticism".
5:53:57 PM
Senator Hoffman opined that the reinstatement of funding for
public broadcasting would greatly reduce the amount of public
testimony on the operating budget. He requested the total dollar
amount of the reduction to public television.
5:54:23 PM
Co-Chair Wilken responded that the change increases funding by
$470,300 to public television and $582,900 to public radio.
5:54:45 PM
Mr. Armstrong estimated the reduction to be approximately
$165,000.
5:54:53 PM
Senator Stedman asserted that public radio is popular in
Southeast Alaska, particularly in outlying areas that receive no
other radio stations. He appreciated the support for public
radio and hoped public television would receive like treatment.
5:55:40 PM
Co-Chair Green noted that the Department of Law would realize
corresponding increases for prosecuting attorneys to manage the
increased caseloads of OPA and PDA.
5:56:03 PM
Senator Dyson understood the most popular public television
shows to be Antiques Roadshow and This Old House, which he
categorized as "fun, but not valuable" programming.
5:56:32 PM
Senator Bunde asked how many participants remained in the
Elected Public Officials Retirement System (EPORS).
5:56:55 PM
Mr. Armstrong was unsure.
5:57:09 PM
Senator Bunde requested a summary of the EPORS program,
including the number of participants, their names, and how many
were still alive.
5:57:25 PM
Senator Olson returned to the topic of public broadcasting. He
informed the Committee that the most valuable public television
programming for Rural Alaska is the state weather broadcast,
which allows people skeptical of news weather forecasts to draw
their own conclusions based on the location of high and low
pressure systems. The weather broadcasts are used regularly by
fishermen, pilots, and other Alaskans who spend time outdoors.
He was confused about the funding, as the spreadsheet depicted a
reduction of $1.2 million, rather than full funding.
5:58:43 PM
Co-Chair Wilken explained the budget proposed in the Senate does
not fund $125,000 for the public broadcasting commission.
5:59:01 PM
Mr. Armstrong clarified that the reinstated funding for public
broadcasting is reflected in the current committee substitute,
Version "P".
5:59:23 PM
Co-Chair Wilken noted all Department summary sheets are
available electronically on the internet at the Legislative
Finance Division website.
5:59:51 PM
Department of Natural Resources Budget Subcommittee
Senator Con Bunde, Chair
Senator Ben Stevens
Senator Tom Wagoner
Senator Donny Olson
Senator Bunde introduced his staff.
6:00:25 PM
LYNNE SMITH, Staff to Senator Bunde, listed as a significant
increase, $1.2 million for oil and gas development, both to
staff the commissioner's office and to accommodate the increased
workload for development of a natural gas pipeline.
6:00:59 PM
Ms. Smith detailed a request in the Governor's budget for more
than $1 million for the State park system. The subcommittee
recommended funding $500,400 of the request, and transferred the
historic preservation program, parks management, and parks and
recreation allocations into resource development, so if extra
funds were identified in resource development, they could be
used to assist the parks.
6:01:41 PM
Senator Bunde commented that the subcommittee collaborated with
the Department to prioritize their needs.
6:02:13 PM
Senator Stedman asked for more information on maintenance of the
state parks, and any potential charges for use, as it is a
sensitive issue in his district.
6:02:38 PM
Senator Bunde responded that the park system requested more
funding than the Department had available. Much of the
wilderness within the parks does not require significant
maintenance.
6:03:14 PM
Department of Labor and Workforce Development Budget
Subcommittee
Senator Con Bunde, Chair
Senator Tom Wagoner
Senator Bettye Davis
6:03:30 PM
Senator Bunde remarked that the subcommittee worked within the
guidelines established by the Committee to address and
prioritize the needs of the Department. He was concerned about
the State's ability to attend to the needs of individuals who do
not receive college educations.
6:04:17 PM
Ms. Smith indicated an allocation of $300,000 for the Alaska
Youth First program, a new program, which was included in the
subcommittee report, but not in the proposed committee
substitute.
6:04:41 PM
Co-Chair Wilken would invite members of the Department to
present the new program before the full Committee.
6:04:52 PM
Department of Fish and Game Budget Subcommittee
Senator Con Bunde, Chair
Senator Ralph Seekins
Senator Ben Stevens
Senator Lyman Hoffman
6:05:07 PM
Senator Bunde spoke to his desire to see the Department
"flourish". He worked under the directive of the Committee to
fund the priority needs of the Department.
6:05:44 PM
Ms. Smith stated the subcommittee report contained a change from
the proposed committee substitute, in the addition of $1,330,700
for wildlife conservation and big game management and research.
She understood the Department would speak to that increase
before the full Committee.
6:06:08 PM
Co-Chair Wilken affirmed that the committee substitute does not
include the big game management appropriation, and he would ask
the Department to present the program to the full Committee
before a final funding decision was made.
6:06:35 PM
Senator Bunde acknowledged that salary adjustments were approved
for sport fisheries employees, which was helpful in meeting
their goals.
6:06:50 PM
Senator Stedman appreciated the salary increases, as it allowed
the State Department of Fish and Game to stay competitive with
the federal departments, and retain its qualified staff.
Department of Revenue Budget Subcommittee
Senator Bert Stedman, Chair
Senator Tom Wagoner
Senator Gretchen Guess
6:07:46 PM
Senator Stedman informed that the proposed committee substitute
contained an increment, at the request of the Governor, for a
State investment officer salary adjustment, an increase needed
to stay competitive within the marketplace.
Senator Stedman commented that the subcommittee's recommended
budget reflected a total increase of 19 percent over the
previous year, compared to a 7.8 percent change contained in the
Governor's requested budget. That increase was mainly due to a
funding source change involving redirection of general funds
from the Department of Commerce, Community, and Economic
Development which would be addressed in a forthcoming
subcommittee overview. He added that the State's "break even"
oil price rate was $49 per barrel, and such an incremental
increase noticeable.
6:09:17 PM
Senator Dyson asked for confirmation that the information on the
subcommittee report indicated a 7.8 percent increase in the
Governor's requested budget, compared to the subcommittee's
recommended 19 percent increase.
6:09:41 PM
Senator Stedman replied that was correct. The fund source change
would be reflected as a reduction in the Department of Commerce,
Community, and Economic Development budget. He quoted the actual
GF increase to be 7.7 percent over the previous year's budget.
The goal during the subcommittee process was to keep "backfills"
and "new headcount" numbers low.
6:10:25 PM
Department of Law Budget Subcommittee
Senator Bert Stedman, Chair
Senator Ralph Seekins
Senator Hollis French
Senator Stedman reported the subcommittee recommended an
incremental change in the Department's budget of 5.2 percent, a
reduction from the Governor's requested 7.3 percent increase.
The increases were related to addressing issues such as
methamphetamine production and other "society ills" the
Department encounters. This includes expanding the court system
and the number of judges in the third and fourth judicial
districts.
6:11:35 PM
Senator Stedman continued that the proposed committee substitute
contained I/A receipts to replace federal funding for drug
enforcement prosecution. While the stated goals of the Committee
included no "automatic backfill" for federal funds, some
programs merited "backfill" funding to ensure their viability.
6:12:21 PM
Senator Stedman referred to page 2 of the spreadsheet, which
detailed a reduction of $74,000 for oil and gas issues related
to the proposed gas line. The Department deemed the current
level of funding adequate.
Senator Stedman noted the most difficult issue within the
Department's budget was that of drug enforcement. The
subcommittee struggled to allocate funds in the most effective
way possible. Monies were targeted at the Anchorage and Mat-Su
areas, where the Department has the greatest needs.
6:13:35 PM
Co-Chair Wilken relayed that the Department had received three
years of federal funding for three Drug Enforcement Agency (DEA)
agents. Members were aware that the federal funds would not be
available for that purpose in the current budget, and were in
agreement to backfill the program with State funds.
6:14:01 PM
Mr. Armstrong interjected that the fast track supplemental
budget bill, SB 264, contained $5.4 million for oil and gas
development from 2006-2007. Another supplemental bill, SB 232,
funded $3.9 million of that effort, and the proposed committee
substitute would fund the remaining $1.5 million.
6:14:28 PM
Senator Stedman did not want to imply that the Committee had
completed its work on the oil and gas issue. He anticipated many
more years of revenue expenditures on the gas line before the
State realized any income from the project.
6:14:48 PM
Department of Commerce, Community, and Economic Development
Budget Subcommittee
Senator Bert Stedman, Chair
Senator Gary Stevens
Senator Gretchen Guess
Senator Stedman reported the subcommittee recommended the
transfer of two positions from the Office Economic Development
to their original location within Community Advocacy. That
transfer amounted to $86,000.
Senator Stedman indicated a $3 million "fund shift" from GF to
business license receipts. He pointed out that this relates to
the Department of Revenue budget increase, as reported in that
department's budget.
Senator Stedman noted a reduction of $121,000 in the proposed
committee substitute, achieved with the deletion of the Special
Projects Management position.
Senator Stedman spoke to a deduction of approximately $140,000
in the Statehood Celebration fund, as it was recommended to
receive its own appropriation. A separate account would allow
the Committee to track those expenditures. He did not want the
spending "euphoria" to get "out of hand".
6:16:12 PM
Senator Stedman cited a $172,000 fund shift from the general
fund to the vehicle rental tax receipts to fund the Division of
Tourism.
Senator Stedman outlined another fund shift under the Qualified
Trade Association contract of $2.5 million from GF to vehicle
rental tax receipts.
6:16:43 PM
Senator Stedman informed that the subcommittee recommended the
funding for the Alaska Seafood Marketing Institute (ASMI) be
increased by $2 million for domestic and international marketing
activities. While the increase is large, it is less than the
Governor's requested $2.3 million and the House of
Representatives' proposed $5 million increase. He suggested that
ASMI not obligate that money until the budget is finalized, as
the appropriation is subject to change.
6:17:22 PM
Senator Stedman communicated that the Regulatory Commission of
Alaska (RCA) received a $150,000 one-time GF increment in the
proposed committee substitute to fund the development of small
hydroelectric power regulations. This was a reduction from the
Governor's requested $325,000 for the project. He identified the
two facets of the program, the first being the development and
implementation of the regulations, followed by the
administration of the program. The funding would establish the
regulation structure to enable a revenue source for small
hydroelectric systems. The recommended allocation would be
sufficient to fund the first phase of the program, and
administrative costs would be addressed in subsequent years
after the program was established.
6:18:36 PM
Senator Stedman referred to the totals on page 3 of the
spreadsheet which appeared to indicate a 36 percent budget
reduction, but clarified that some of that reduction reflected
the fund transfers between the Department of Revenue and the
Department of Commerce, Community, and Economic Development.
Senator Stedman told that the Department's "head count" was
reduced from 514 to 511, as two Rural Utility Business Advisor
(RUBA) positions were recommended not to be funded. The deletion
of the special projects manager position was a "tough decision"
as many people desired continued funding for this "circuit
rider" to travel to rural areas to advise on water and sewer
issues.
6:20:26 PM
Co-Chair Wilken announced he would submit an amendment to
provide grant funding for marketing activities directed at
independent travelers, such as couples traveling by car, which
would be funded from the vehicle rental tax.
He also noted the proposed committee substitute funds the PCE
program at 90 percent.
6:21:14 PM
Co-Chair Wilken referred to page 61 of the committee substitute,
which provided for an additional appropriation of $6.5 million
to the PCE program if the ANS oil price is $58.50 per barrel on
October 1 and April 1. If the additional appropriation is
warranted, the total funding for PCE would be at the Governor's
requested level of $25 million. The table on pages 61 and 62
detailed ANS prices beginning at $54 and their corresponding
additional funding levels.
6:22:03 PM
Senator Dyson recalled the Committee's discussions in recent
months of the "energy cost crises" across the State, and how the
various energy assistance programs interrelate. He has
introduced a bill to require the production of a State-wide
overview of the various programs and their specific
qualifications and benefits. He suggested the Committee consider
if such an overview could be included in the proposed committee
substitute. He deemed the receipt of that information necessary
before the Committee began addressing accelerating energy costs
in subsequent years.
6:23:16 PM
Co-Chair Wilken appreciated the suggestion, as it was an issue
all members struggle with, and thus far the only solution had
been increased funding. Coordinating energy assistance projects
to address rising costs was a "big project", and he commended
Senator Dyson for his for his attention to it. He recommended
putting pressure on the Administration to develop the overview.
6:23:55 PM
Senator Stedman spoke to the Committee's "good intentions" when
it funded several energy assistance programs the previous year
to alleviate the burden on municipalities. He had since learned
that some of those funds were directed to communities that were
dependant on diesel generators, while other communities that
received assistance were powered by hydroelectric sources. He
opined that the Committee needed more information regarding
power use and availability across the State, as a family relying
on a small generator would be more significantly impacted by
high fuel costs than those using hydroelectric power.
6:24:54 PM
Co-Chair Wilken wondered if the joint action agency might be
able to designate funding for that endeavor for "the benefit of
state".
6:25:25 PM
Office of the Governor Budget Subcommittee
Senator Gary Wilken, Chair
Senator Ben Stevens
Senator Lyda Green
Senator Gene Therriault
Senator Lyman Hoffman
Co-Chair Wilken summarized the budget was recommended to be
funded as requested by the Governor with no changes.
6:25:41 PM
Legislature Budget Subcommittee
Senator Gary Wilken, Chair
Senator Ben Stevens
Senator Lyda Green
Senator Gene Therriault
Senator Lyman Hoffman
Co-Chair Wilken informed that decrements were required to meet
the Department's budgetary goal, and summarized them as follows.
In the proposed committee substitute Legislative Audit was
reduced by $125,000 and Legislative Finance received a
recommended decrement of $625,000. Other decrements were
recommended for session expenses in the amount of $33,000,
$175,000 from Legislative council and subcommittees, and $66,000
from the legislative operating budget.
Co-Chair Wilken summarized that the Governor's requested budget
totaled $51.919 million, and the subcommittee's recommended
budget reduced expenditures to $50.912 million.
6:26:44 PM
Senator Bunde pointed out the Legislature's budget represented
the smallest percentage increase of any department budget.
6:26:52 PM
Co-Chair Green interjected that the Legislature's budget would
receive the lowest percentage increase in spite of the
anticipation of special legislative sessions.
6:27:03 PM
Co-Chair Wilken specified the subcommittee had budgeted for two
20-day special sessions for both 2006 and 2007.
6:27:21 PM
Senator Hoffman recounted two issues from a recent address by US
Senator Ted Stevens. One item relating to energy concerns at the
federal level was attended to with the allocation of additional
funds to seek support for the opening of the Alaska National
Wildlife Refuge (ANWR). The other issue Senator Stevens spoke to
was the Denali Commission, and he recommended establishing
matching funds. Senator Hoffman would likely offer an amendment
to require matching funds.
6:28:18 PM
Co-Chair Green recalled the Denali Commission's initial
presentation, and their claim that they would never request
State funds. She had believed them.
6:28:44 PM
Senator Hoffman also believed the Commission, and clarified that
the request for funds came not from the Denali Commission but
from Senator Ted Stevens.
6:29:02 PM
Co-Chair Wilken declared the subcommittee overviews complete.
6:29:08 PM
Co-Chair Wilken explained that the Legislative Finance Division
would incorporate the changes set forth by the subcommittee
recommendations, then post the information on the internet.
AT EASE 6:29:19 PM
6:29:37 PM
Co-Chair Green offered a motion to adopt the budget
subcommittees' recommendations to the Department of Health and
Social Services, the Department of Corrections, the Department
of Transportation and Public Facilities and the Alaska Court
System.
Without objection the aforementioned budget subcommittees'
recommendations were ADOPTED.
6:30:03 PM
Senator Stedman moved for adoption of the Department of Law, the
Department of Commerce, Community, and Economic Development, and
Department of Revenue budget subcommittees' recommendations.
There was no objection and the aforementioned budget
subcommittees' recommendations were ADOPTED.
6:30:18 PM
Senator Dyson offered a motion to adopt the budget
subcommittees' recommendations for the Department of
Administration, the Department of Public Safety, the Department
of Military and Veterans Affairs.
Without objection the aforementioned budget subcommittees'
recommendations were ADOPTED.
6:30:39 PM
Senator Bunde moved for adoption of the Department of Fish and
Game, the Department of Labor and Workforce Development, and the
Department of Natural Resources budget subcommittees'
recommendations.
There was no objection and the aforementioned budget
subcommittee's recommendations were ADOPTED.
6:30:57 PM
Co-Chair Wilken offered a motion to adopt the budget
subcommittees' recommendations for the Department of
Environmental Conservation, the Department of Education and
Early Development, the University of Alaska, the Office of the
Governor, and the Legislature.
Senator Hoffman objected to comment that the Committee was
"marching in the right direction" with the $90 million
appropriation for the base student allocation in the Department
of Education and Early Development. However, school districts
throughout the state continue to struggle with the increased
costs of the PERS/TRS systems, which resulted in a decrease in
the amounts of funds available for classroom instruction. He
opined that the State ought to have funded public education at a
higher level, and cited a surplus of $1.4 billion and the
probable adjustment to the State's tax system that could
generate an additional $1.1 billion per year in revenue as
support. He surmised that $2.5 billion was available for
allocation, and declared "we could have done better for children
of the state."
Senator Hoffman removed his objection.
6:33:13 PM
Senator Stedman objected to share his anticipation of amendments
to the department's budget. He assumed the Chair would accept
the amendments submitted.
6:33:47 PM
Co-Chair Wilken affirmed.
6:33:52 PM
Senator Stedman removed his objection.
6:34:05 PM
Co-Chair Wilken announced amendments to the budget were due by
1:00 on Saturday afternoon, with the goal of reporting the bill
out of Committee the following Wednesday.
6:34:16 PM
Co-Chair Green offered a motion to adopt CS HB 365, 24-GH2033\P,
as a working document.
6:34:26 PM
There was no objection and the committee substitute, Version
"P", was ADOPTED as a working document.
6:34:33 PM
Co-Chair Wilken indicated that all reported changes would be
incorporated into a forthcoming amended committee substitute.
Version "P" includes most of the changes discussed.
6:35:02 PM
Co-Chair Wilken thanked members and staff for their efforts.
6:35:44 PM
Co-Chair Wilken announced the schedule for public testimony.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 6:36:08 PM
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