Legislature(2007 - 2008)SENATE FINANCE 532
03/10/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB310 || HB312 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 310 | TELECONFERENCED | |
| + | HB 312 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | SB 221 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
March 10, 2008
9:19 A.M.
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:19:25 AM.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice-Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Senator Fred Dyson
MEMBERS ABSENT
None
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget;
Kevin Brooks, Deputy Commissioner, Department of
Administration
SUMMARY
CSHB 310(FIN) am
An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska; and providing for an effective
date.
CSHB 310(FIN) am was HEARD and HELD in Committee for
further consideration.
CSHB 312(FIN)
An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date.
CSHB 312(FIN) was HEARD and HELD in Committee for
further consideration.
CS FOR HOUSE BILL NO. 310(FIN) am
An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska; and providing for an effective
date.
CS FOR HOUSE BILL NO. 312(FIN)
An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date.
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
discussed the status of the operating budget amendments
totaling approximately $41 million dollars. She pointed
out the two packets of amendments submitted by the Office
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of the Governor, one on February 13 and the others
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forwarded on February 29which indicates General Fund
reductions of approximately $7.6 million dollars.
She advised that the Senate Finance Committee would be
considering the House version of the operating budget.
There are issues in the House version because some budget
amendments were submitted just as the subcommittees work
had been completed. She understood that amendments from
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February 29 had not been incorporated.
Ms. Rehfeld identified a new appropriation level included
for oil and gas development items related to the Alaska Gas
Inducement Act (AGIA). There are some corrections that
need to be made to the structure of the appropriation to
include the correct items. She addressed interest
expressed by legislative members to move some capital
requests to the operating budget.
9:23:32 AM
Ms. Rehfeld continued, there has been approximately nine
projects identified by the Senate Finance Committee (SFC)
to be moved to the operating budget. In the House budget,
six of the items were moved and three remain for
consideration.
• The Department of Health and Social Services project
for Child and Family Services reviews;
• The Department of Natural Resources, Boating Safety
Program; and
• The Department of Natural Resources, Oil & Gas
Royalty evaluation work.
She explained that the requests could be moved into the
operating budget. She anticipated that the boating safety
program would present challenges due to the three year
grant funding cycle. She added that if the Senate intends
to look toward that structure, some clean-up work will need
to be accomplished.
Other areas in the House operating budget were reduced
based on fiscal conservative points of view. She stated
there are a few that the Administration would like to see
the Senate restore.
9:25:32 AM
Ms. Rehfeld highlighted inclusion of the bargaining unit
agreement costs, which cover the General Government Unit
{GGU) and the supervisory unit. Also attached before the
Committee is a non-exempt pay bill. The bargaining
agreements are included in the operating budget.
9:26:35 AM
Senator Dyson inquired about the issues related to boater
safety. Ms. Rehfeld explained that originally, the project
was requested as a capital budget item, however,
legislative interest has been to move it into the operating
budget. The only concern with the boater safety program is
that it is under a grant program, which exceeds the one-
year timeframe with a longer lapse date.
Senator Dyson inquired if the grant funds were federal
pass-through dollars. Ms. Rehfeld confirmed. In response
to Senator Dyson, Ms. Rehfeld clarified that the Department
prefers to see the request stay in the capital budget but
if the Legislature chooses to move it, the Administration
will work with that.
Senator Dyson asked the position of the House.
9:28:33 AM
Ms. Rehfeld explained that they had not intended to move
the program and that they moved six of the nine proposed
projects.
Ms. Rehfeld highlighted items not included in the House
submitted budget, which the Administration would like to
see addressed:
• The Department of Administration reduction for
maintenance at the Atwood parking garage. That was
an area of concern to the Administration and the
Department requested it be added back in. She noted
that $962 thousand dollars had been requested and it
was reduced by $400 thousand dollars.
9:30:16 AM
In response to queries by Senator Elton, Ms. Rehfeld
explained that she was addressing changes made in the House
proposed budget and not specific amendments to the handout.
AT EASED: 9:31:02 AM
RESUMED: 9:31:19 AM
Ms. Rehfeld stated that the amendments on the first page of
the handout had been included in the House version of the
budget. She highlighted the most important references:
• The Office of Public Advocacy (OPA) and the Public
Defender Agency. The Administration did include
in those budgets the amount attached in the
supplemental this year.
She added that work is needed on the proposed 2009 budget
area, which has been a difficult area to project. The
actual costs of the program in conjunction with the work to
the criminal justice working group has been provided,
attempting to determine all important components necessary
for that system. Until the amount can be determined, the
Administration is requesting the identical number sought in
the supplemental bill.
Ms. Rehfeld addressed specific corrections:
• To the Department of Education and Early Development
holdover from last year, when direct-deposit for the
retirement system cost errors were made.
9:33:07 AM
Ms. Rehfeld indicated Line 14:
• An addition to the Head Start program amount in
order to address the wait list. The current budget
contains approximately $6 million dollars in grants,
whereas, the proposed provides a 10% increase.
9:34:21 AM
Senator Elton asked if the House created a matching
component for the Head Start grant and if they had, would
the amendment address the match. Ms. Rehfeld responded
that the Governor's budget amounted to an increase of $600
thousand dollars without a matching component. The Head
Start funding was to specifically address the waitlist for
that program. She pointed out that the House had included
intent language to require the match. She explained that
the Department would issue the first round of grants at $6
million dollars and then look at the $600 thousand dollar
allocation based on which programs could demonstrate a
match.
9:35:26 AM
Senator Elton questioned the historic grants related to
Head Start in relationship to the matching component. Ms.
Rehfeld reiterated that the proposed Administration
budget would be an increase of $600 thousand dollars, which
would be used for that program's wait lists. The House
had added intent language to require the match.
She continued the overview of Page 2.
• Monetary corrections to the retirement system.
• Series of amendments to the Department of Fish and
Game related to the unexpected lose of federal
dollars. The request was adopted in the House
version.
• Department of Health and Social Services, where the
Administration attempted to allocate a $17.5 million
dollar placeholder in the budget to be used for rate
adjustments.
9:37:54 AM
Ms. Rehfeld continued:
• Department of Health and Social Services an
allocation for moving the Senior Benefit program
into its own component. Most of the components
address the recommendations for the rates as
accepted by the House.
• Department of Labor and Workforce Development a
one time funding for the Southwest Alaska Vocational
Education Center (SAVEC) operating grant, which
experienced an unexpected loss of federal dollars.
• Department of Law dollars requested to cover lease
space costs in Anchorage.
• Department of Law requested funding in the amount
of $4.7 million dollars related to corrosion
litigation, as adopted in the House version.
9:39:56 AM
Ms. Rehfeld emphasized that the following items were the
most significant areas:
• Department of Natural Resources - fire suppression
aviation costs as adopted in the House version.
• Department of Public Safety - vehicle cost included
at ½ the requested amount in the House version.
Senator Olson referenced a letter from the Department of
Public Safety indicating that the Department would be
acquiring three new aircrafts, one of which being a King
Air 350. He questioned if the Administration had been
aware of that request. Ms. Rehfeld was not aware of the
King Air purchase; however, understood that the Department
of Public Safety needs to acquire additional aircraft.
Senator Olson clarified that the Request for Proposal (RFP)
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had been distributed on March 11 for those two aircrafts.
Ms. Rehfeld advised that there could have been existing
funds for the aircraft purchase. She offered to research
that request.
Co-Chair Hoffman recalled that two aircrafts had been
damaged. Senator Olson acknowledged that there were two
super cub accidents that damaged the two aircrafts and
taking them out of commission. Those aircraft were rebuilt
when a RFP went out for the additional two.
Co-Chair Hoffman asked Senator Olson if the intent was to
fix the damaged aircraft and keep them or if they would be
replaced and sold for the acquisition of the new aircraft.
Senator Olson understood that the two new ones would be
retained along with repairing the other two. Ms. Rehfeld
offered to investigate the concern.
9:43:32 AM
Senator Thomas referenced:
• Department of Law - an anticipated law-suit
reference item 82 BPXA Corrosion Litigation for
pursuing the claims for penalties and lost revenues
in the 2006 Prudhoe Bay pipeline spills and
production shutdowns. The Department of Law
anticipates making a recommendation to commence
litigation to recover the State's revenue losses, as
well as civil penalties and damages under the
State's environmental statutes. The Department
anticipates the litigation will last three to four
years and that additional appropriations will be
needed.
Ms. Rehfeld recommended that the Committee could be briefed
during an Executive Session to discuss those elements of
concern.
Senator Thomas inquired if Ms. Rehfeld knew the anticipated
amount to the State from the litigation. Ms. Rehfeld
replied that she did not have that information but the
Department of Law would be able to provide it. She
indicated that the Department anticipates the litigation to
extend up to five years and that the request would be a
significant amount of recoverable funds.
Ms. Rehfeld continued:
• Department of Revenue the Natural Gas
Commercialization component in the amount of $1.2
million dollars. The amount had been indicated
under Alaska Gas Inducement Act (AGIA), which the
Department failed to include. It would provide FY09
operating funds as indicated on the fiscal note.
• Department of Transportation and Public Facilities
some amendment proposals had not been included in
the House version of the budget. Priority requests
including a new maintenance management system;
maintenance and operations increment for road
weather information system; specific road
maintenance projects and risk management increments.
She stressed that for the most part, the Department
of Transportation and Public Facilities requests
were not included in the budget from the House
version of the operating budget.
9:47:20 AM
Ms. Rehfeld continued:
• University of Alaska - the Alaska Community
Colleges' Federation of Teachers (ACCFT) union
agreement was ratified on February 4th, 2008. The
agreement included a 4.9% salary increase, no
increase for employer health care contributions and
a one-time $800 workforce development stipend per
retained ACCFT faculty member for FY09. The total
FY09 increment for the ratified agreement with ACCFT
is $1,195.8 ($978.7 GF, $217.1 UA Receipts). Of
that amount, the University has already requested
$823.8 ($606.7 GF, $217.1 UA Receipts) in the FY09
operating budget. The University reached a tentative
three-year agreement with the United Academics
(UNAC) union on December 17, 2007. The tentative
agreement includes a 6.3% salary increase and no
increase for employer health care contributions.
The agreement is tentative, but the University
anticipates the union will ratify the agreement as
early as the week of February 18th.
• An additional request to increase the amount
distributed under fuel allocations" in the budget.
That request was based on the amount included in the
supplemental bill with some adjustments made. She
pointed out that the House Finance Committee (HFC)
was reworking the trigger mechanism base amount",
resulting in some changes.
Co-Chair Hoffman asked why the increased costs to the
school districts had not been included in the request for
the fuel cost increase. He acknowledged that districts do
receive funds under the area cost differential, which
covers only 50% of the recommended increase.
Ms. Rehfeld clarified that the Administration had not
received a request from school districts regarding fuel
cost recommendations separate from the funding that is
provided through the foundation formula. She further
commented on discussions regarding whether fuel costs
should be a part of the foundation formula.
Ms. Rehfeld identified specific amendments submitted on
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February 29 that are not specified on the green sheet
(Gov's FY09 Operating Budget Amendments):
• Supervisory bargaining unit agreement, which is a
total General Fund amount of $7.23 million dollars;
all funds total $16.9 million dollars for the
supervisory bargaining unit agreement.
• Additionally, $200 thousand dollars for the Alaska
Energy Authority (AEA) for the Executive Director
position, which was recently appointed.
• Proposal to spread the Medicaid unallocated
reduction in the House budget to some specific
components.
• An amendment to address the completion costs for the
Bethel runway project.
9:51:39 AM
Senator Dyson requested further information on the
component in the Department of Public Safety, the Alaska
State Trooper salary and benefit package. Ms. Rehfeld
responded that the budget submitted included specific
increases to cover the five new trooper positions and
personal services funding associated with that.
Senator Dyson asked if there had been an increase added to
the salary and benefit package for troopers. Ms. Rehfeld
explained that the State was currently working on an
agreement with the Department of Public Safety employees
and that it had not yet been negotiated.
Senator Dyson requested assurance that there would be an
increase would be covered in the budget.
9:54:39 AM
KEVIN BROOKS, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, clarified that the Administration is in
active negotiations with the Department of Public Safety
employees and that the intention is to reach a monetary
term agreement as quickly as possible.
Senator Dyson questioned how many new troopers would join
the force next year if the proposed plan is accepted. Ms.
Rehfeld responded that there would be five new trooper
positions built into the FY09 budget. She understood that
there were approximately eleven vacant positions and that
five positions would be hired for the FY09 budget. She
offered to provide the exact numbers to the Committee.
Senator Olson added his request for those specific numbers.
CSHB 310(FIN) am & CSHB 312(FIN) were HELD in Committee for
further consideration.
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ADJOURNMENT
The meeting was adjourned at 10:12 A.M.
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