Legislature(2013 - 2014)
03/21/2013 10:03 AM Senate FIN
| Audio | Topic |
|---|---|
| Start | |
| HB65 || HB66 | |
| Subcommittee Reports to Full Committee | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
March 21, 2013
10:03 a.m.
10:03:55 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 10:03 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
James Armstrong, Staff, Senator Pete Kelly; David Teal,
Director, Legislative Finance Division; Denise Liccioli,
Staff, Senator Donnie Olson; Sheila Peterson, Staff,
Senator Mike Dunleavy; Steve Ricci, Staff, Senator Mike
Dunleavy; Karen Rehfeld, Director, Office of Management and
Budget, Office of the Governor.
SUMMARY
CSHB 65(FIN) APPROP: OPERATING BUDGET/LOANS/FUNDS
CSHB 65(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 66(FIN) APPROP: MENTAL HEALTH BUDGET
CSHB 66(FIN) was HEARD and HELD in committee for
further consideration.
SUBCOMMITTEE REPORTS TO FULL COMMITTEE
CS FOR HOUSE BILL NO. 65(FIN)
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, and making
reappropriations; and providing for an effective
date."
CS FOR HOUSE BILL NO. 66(FIN)
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program and making a
reappropriation; and providing for an effective date."
10:05:14 AM
Co-Chair Meyer MOVED to ADOPT committee substitute for CSHB
65(FIN), work draft 28-GH1799\I (Bailey, 3/20/13). There
being NO OBJECTION, it was so ordered.
Co-Chair Meyer MOVED to ADOPT committee substitute for CSHB
66(FIN), work draft 28-GH1797\P (Bailey, 3/20/13). There
being NO OBJECTION, it was so ordered.
JAMES ARMSTRONG, STAFF, SENATOR PETE KELLY, explained the
changes in the committee substitute. He referred to the
three spreadsheets from the Legislative Finance Division
(LFD): "1. 2013 Legislature-Operating Budget, Agency
Summary-House Structure; Numbers and Language"; "2. 2013
Legislature-Operating Budget, Agency Summary-House
Structure; Numbers and Language; Numbers and Language Fund
Groups: General Funds"; and "3. 2013 Legislature-Operating
Budget, Statewide Totals-House Structure" (copies on file).
He explained that the CS would spend a total of $9.851
billion including $5.798 billion of Unrestricted General
Funds (UGF), $746.69 million of Designated General Funds
(DGF), $1.277 billion in other state funds, and $2.29
billion in federal funds. He announced that the difference
between the CS and the governor's proposed amended budget
was less than $62.659 million.
10:09:24 AM
Co-Chair Kelly wondered if Mr. Armstrong had mentioned the
amount of UGF. Mr. Armstrong responded that he had shared
the UGF number.
Co-Chair Kelly wondered where that number could be found.
Mr. Armstrong looked at page 2, and stated that the UGF
number was $5.798 billion.
Co-Chair Kelly felt that the UGF number was imperative for
the record in order to point out that $9 billion of state
funds were not being spent.
Mr. Armstrong stated that there was Department of Military
and Veterans Affairs (DMVA) language that dealt with the
Alaska Aerospace Corporation related to a deadline for
multi-year contracts that was removed from the bill. There
was a provision in the governor's budget that collected
fees from the Bulk Fuel Revolving Loan Fund, but that fund
will be eliminated the following year. Therefore, the
$45,000 that was dedicated to that fund would go to the
general fund. He explained that there was a $10 million
capitalization to the Alaska Energy Authority (AEA) that
was removed from the budget, and would be a conferencable
item. He shared that the House version of the bill added a
mining professor at the University of Alaska Southeast
(UAS), but the funding was contained in the numbers section
of the committee substitute, so the language for that
request was removed.
Mr. Armstrong looked at page 58 of the committee
substitute, lines 26 through 31 and page 59, lines 1
through 4. He explained that the governor's submitted
budget showed that $33.091 million for the Power Cost
Equalization (PCE) endowment gained interest each year. He
announced that $7.26 million would supplement the program,
for a total of $40.351 million. He explained that a large
deposit was made to the endowment in FY 11, so the general
fund subsidies were getting lower based on a three year
average calculation of fund balance. In FY 15, the fund
balance on the GF subsidy was supposed to be removed as the
$400 million hits the three rolling average. The proposal
was a removal of $7 million of GF, and utilized $7.260
million from the PCE.
Senator Hoffman requested a copy of the impact of the
change to the PCE. Co-Chair Kelly requested an explanation
of the impact of the PCE change.
10:15:52 AM
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION, looked
at "Power Cost Equalization Endowment Fund - History and
Projections (in Millions)" (copy on file). He explained
that the long-term showed very little difference. The
amount of the PCE was sufficient so the payout from the
endowment would drop to below 6 percent once the balance
was fully phased into average balance computation. He
stated that the balance was expected to begin to grow in
the endowment, which would fully fund the PCE. He remarked
that subsection (g), page 58 contained backstop language
stating that if the $40 million was insufficient for the
current year; addition money would come from GF to fully
fund the PCE.
Senator Olson looked at page 58, subsection (g). He noted
the $40 million increment from the PCE Fund was included on
line 26, subsection (f).
Co-Chair Kelly remarked that the impact of the PCE payment
would not change, and the impact of the endowment was
minimal. It would continue to grow under scenarios outlined
in the spreadsheets. Mr. Teal agreed.
Senator Hoffman wondered if the backstop language was
currently included. Mr. Teal looked at subsection (g) on
page 58:
(g) If the amount appropriated in (f) of this section
is not sufficient to pay power cost equalization
program costs without proration, the amount necessary
to pay power cost equalization program costs without
proration, estimated to be zero, is appropriated from
the general fund to the Department of Commerce,
Community and Economic Development, Alaska Energy
Authority, power cost equalization allocation, for the
fiscal year ending June 30, 2014.
Mr. Armstrong looked at page 60, lines 19 through 23, which
was a reappropriation of a multi-year appropriation made in
FY 13 in Department of Health and Social Services (DHSS).
The funds in the prior year were $9 million, and it was
estimated that $6 million remained to be reappropriated
into the Behavior and Medicaid component of the DHSS
budget.
Mr. Armstrong highlighted page 60, lines 10 through 18,
which was related to the Low Income Heating and Energy
Assistance Program. The section was a backstop provision
that LFD and the subcommittees worked on, and it stated
that if there were insufficient federal funds in the
current year, then GF would fund the program. He looked at
page 62, line 23, which was a change to the Department of
Natural Resources (DNR) Division of Oil and Gas request
that fully funds the project. He looked at page 72, lines
12 through 13, which dealt with the Trauma Care Fund. He
stated that the governor had requested $2 million, the
House denied that request, and the committee substitute
added that request back into the bill.
10:21:24 AM
AT EASE
10:27:52 AM
RECONVENED
^SUBCOMMITTEE REPORTS TO FULL COMMITTEE
Co-Chair Meyer explained the Department of Transportation
and Public Facilities (DOT/PF) and Department of Commerce,
Community and Economic Development (DCCED) subcommittee
reports. He explained that there were some reductions in
the DOT/PF budget totaling approximately $7.1 million. He
stated that most of the reductions were made to the Alaska
Marine Highway System budget, related to vessel fuel and
vessel operations. He remarked that the commissioner of
DOT/PF had shared that the reductions would not have a
major impact on service. He shared that there was a fleet
reduction of $2.7 million spread throughout the Northern,
Central, and Southeast regions equally. The DCCED reduction
was approximately $3.9 million related to grants to named
recipients in the Operating Budget, which were typically in
the Capital Budget. He shared that there were reductions to
the Alcohol Beverage and Control (ABC) Board. He explained
that there were unexpected costs related to recently moving
the ABC Board from the Department of Public Safety (DPS) to
DCCED, so those costs were addressed in the DCCED budget.
10:30:17 AM
Senator Olson invited his staff to explain the DHSS and DPS
budgets.
DENISE LICCIOLI, STAFF, SENATOR DONNIE OLSON, explained the
DHSS budget. She stated that the budget authorization
consisted of almost $2.7 billion including $1.2 billion in
UGF, $74.1 million DGF, $94.7 million in other funds, and
$1.2 billion in federal funds. The budget proposal was
approximately $1.2 million in GF less than the governor's
proposed budget. She shared that the subcommittee did not
accept the requested increase in Medicaid for the woodwork
effect for $7.385 million. She stated that the subcommittee
added $1.1 million for the Alaska Medicare Clinic; a
$450,000 one-time item for the the Complex Behavior
Collaborative; $565,000 of GF to increase the Emergency
Medical Services grants; and $6 million to the Behavioral
Health Medicaid Services component. She explained that
there was intent added to the budget that allowed the
commissioner of DHSS the authority to move up to $50
million of funds within the budget between appropriation
lines. She remarked that the intent language was unusual,
but necessary to allow DHSS to react to the federal
sequester, and prevent the need for a supplemental budget
request.
Ms. Liccioli explained DPS budget. She stated that the
subcommittee authorized a total $208.79 million including
$176 million of UGF, $6.4 million in DGF, $15.3 million in
other funds, and $10.8 million of federal funds. She stated
that the proposal was $707,200 below the governor's
request. She stated that the subcommittee disapproved the
request for three new troopers and $827,000 for a new sex
trafficking unit. She also stated that the subcommittee
added $120,000 of GF to increase the Victims for Justice
funding. She furthered that there was intent added that
asked DPS to work with the grantees to determine what other
needs were unmet for the Village Public Safety Officers
(VPSOs); and to use any anticipated savings from vacancy to
be put into the program for housing, equipment, etc.
Co-Chair Kelly surmised that the rationale behind not
funding the sex trafficking unit, was because there were no
reported cases of sex trafficking. Senator Olson replied
that there were no sex trafficking cases on either side,
which indicated no activity of recent sex trafficking.
10:35:35 AM
SHEILA PETERSON, STAFF, SENATOR MIKE DUNLEAVY, explained
the Department of Education and Early Development (DEED)
budget proposal summary. She stated that the proposal had
$350 million including $66.5 million in UGF, $24.319
million in DGF, $26.051 in other funds, and $233.798
million in federal funds. She noted that the federal funds
in the DEED were three times as large as the GF for DEED.
She stressed that most of the federal funds were utilized
as grants to the school districts. She stated that the fund
that the Fund the Digitizing Education in Alaska Initiative
had a reduction of $738,000. She remarked that the amount
gave DEED flexibility to fund the four different programs.
She explained that a new program, "The Jobs for America's
Graduate" was eliminated because it was a new program, so
its startup date could occur at a later date. She stated
that the early childhood education programs matched the
work done in the House; because it was not clear which
early childhood program was giving the best performance per
dollar.
Ms. Peterson explained the Department of Environmental
Conservation (DEC) budget. She stated that there was a
reduction to two programs that totaled $446,500, for
increased staff time. She remarked that the money in the
base could cover the remaining half that was removed. She
stated that there was change in the intent language from
the House, which dealt with the Oil and Hazardous Substance
Release Prevention and Response Fund. She noted that the
DEC proposal contained $21.784 million in UGF; $6.895 in
DGF; $11.199 in other funds; $24.938 in federal funds;
totaling $84.817 million.
10:39:53 AM
STEVE RICCI, STAFF, SENATOR MIKE DUNLEAVY, highlighted the
Department of Fish and Game (DFG) budget. He stated that
the DFG subcommittee recommended $79.971 million in UGF;
$8.586 in DGF; $62.849 million in other funds; $63.337 in
federal funds; totaling $214.745 million. He remarked that
the proposal reduced UGF spending by 1.1 percent from the
governor's amended budget. He stated that the subcommittee
approved a $400,000 of GF for the Southeast Port Sampling
Program in the Commercial Fisheries Division, which would
be used to examine mixed stock fisheries in the area. The
subcommittee approved $273,000 of GF for mixed stock
sampling in upper Cook Inlet. The subcommittee provided
funding for the Kodiak area in the amount of $100,000. He
explained that the subcommittee approved two unallocated
cuts to reduce GF spending: $579,000 for a three-year
average of a lapse balance that equaled 0.73 percent of the
total GF request for the FY 14 budget; and $315,000
reduction that equaled 5 percent of the agency's travel
budget. He stated that the subcommittee approved $436,200
of GF to leverage approximately $1.8 million in federal
funds for the Wildlife Conservation Division.
10:42:35 AM
AT EASE
10:43:49 AM
RECONVENED
10:43:52 AM
Senator Bishop explained the Department of Corrections
(DOC) budget proposal. He stated that the subcommittee
accepted the House changes, which were the same as the
governor's amended budget. The budget totaled $332.191
million. He noted the fund source change of $2 million from
UGF to federal receipts for the housing of federal
prisoners. He stated that there was a $5.5 million fund
change from PFD criminal to UGF due to decreased
garnishments. He remarked that DOC was concerned that the
prison population rate was increasing, and there may need
to be a relevant focus on increased woman's prison
capacity. He noted that he was tentatively planning to
travel to Bethel, to examine the overcrowding in the Bethel
Jail.
Senator Bishop explained that DMVA budget. He explained
that there was a $405,000 decrement related to a fund
source change. He stressed that the budget was below the
governor's proposed amended budget. He remarked that there
was an addition of $8 million to fully fund the Alaska
Aerospace Corporation in support of anticipated contracts.
He announced that there was intent language that stated
that Alaska Aerospace Corporation would not request more
than $6 million in FY 15, $4 million in FY 16, and $2
million in FY 17.
Senator Bishop highlighted the DNR budget. He announced
that the subcommittee's proposal was less than the
governor's amended budget by $2.76 million for a total of
$159 million. He stated that the proposal moved funding of
the arbitration of oil and gas royalty in the Alaska
Gasline Inducement Act (AGIA) monitoring and advising
sections to the language portions of the bill, due to the
historic inability to accurately predict the actual
expenditures. He stated that the subcommittee maintained
the ability of DNR to staff the Guide Concession Program
while declining any new money for implementation of the
program until such time that the legislature approved
appropriate legislation.
Senator Bishop explained the Department of Labor and
Workforce Development (DLWD) budget. He announced that the
subcommittee proposal was $550,000 less than the governor's
amended budget. He stated that the subcommittee did not
accept the $200,000 for the Alaska Vocational and Technical
Education Center (AVTEC) increment, because AVTEC had the
ability to raise tuitions. He stated that the subcommittee
maintained the ability of DLWD to prepare Alaska workers
for what is anticipated to be a significant increase in oil
exploration development related activities.
10:50:07 AM
Co-Chair Kelly noted that the CS restored $1 million in the
University of Alaska budget for maintenance, and a
custodial contract. AN increment of $130,000 for the
Fairbanks campus aviation program was also included.
Vice-Chair Fairclough explained the Department of
Administration (DOA) budget. She stated that the
subcommittee had changed the structure of the Alaska Land
Mobile Radio (ALMR) payments on behalf the municipalities.
Previously, the ALMR payments were directed toward DCCED,
and then transferred to DOA. She stated that there was a
reduction of the authorization to the Violent Crimes
Compensation Board to more closely align with anticipated
funds available in the Violent Crimes Compensation Fund.
She announced that the total allocation for DOA was
$336.249 million.
Vice-Chair Fairclough explained the Department of Revenue
(DOR) budget. She pointed that the subcommittee funded two
positions that were transferred from DCCED to DOR related
to the Film Office move. She stated that the subcommittee
allocated $350.68 million. She added that the subcommittee
accepted the governor's request for an additional master
auditor for the Division of Oil and Gas.
Vice-Chair Fairclough explained the UA budget. She stated
that the subcommittee reduced the receipt authority by $36
million, which was a recommendation from LFD. She pointed
out that the university still had sufficient funds, and
receipt authority. The subcommittee funded a comprehensive
student advising for $400,000; the Mining Regulatory
Training Certificate Program for $200,000; and the Small
Business Development Center for $356,000. She stressed that
the budget was made in order to ensure that the University
of Alaska could fund their basic fixed costs.
Co-Chair Kelly explained the Governor's Office budget. He
stated the UGF was $28.881 million; federal funds were
$198,000; DFG was $4,900; other funds were $521,700;
totaling $29.606 million.
10:54:47 AM
Co-Chair Kelly explained the Legislature's budget. The
subcommittee approved $73.527 million in UGF; $71.4 million
in DGF; $403,000 in other funds. He pointed out that the
subcommittee reduced expenses in LFD by $250,000; and
$350,000 in other committee expenses.
Co-Chair Kelly explained the Court System budget. He stated
that the subcommittee approved $110.196 million in UGF;
$518,000 in DGF; $1.801 million in other funds; $1.675
million in federal funds; totaling $114.191 million. He
pointed out that the subcommittee used $689,000 to replace
federal pass through funding for the therapeutic courts. He
announced that the subcommittee allocated $114,300 to fund
a security analyst position. The subcommittee also approved
an allocation of $691,000 for increased bandwidth to meet
the needs in rural Alaska.
Co-Chair Kelly highlighted the Department of Law (LAW)
budget. He stated that the subcommittee approved $63.352
million in UGF; $2.698 million in DGF; $28.432 million in
other funds; $1.966 million in federal funds; totaling
$96.450 million. He stated that the subcommittee allocated
three quarters of the requested funding for the new
attorney positions in Fairbanks, Bethel, and Juneau. He
remarked that the subcommittee added three new positions in
the Natural Resources Section of the Civil Division for
statehood defense.
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, thanked the committee for the time
that was spent drafting the budget.
Senator Hoffman queried the progress of the contracts. Ms.
Rehfeld responded that there was success in negotiating
agreements with the confidential employees, general
government, and supervisory unit. She announced that the
finance committees had been given the bargaining unit
agreements and the costs as of March 19.
Co-Chair Kelly explained that the non-covered units match
needed to be included in a separate bill. Ms. Rehfeld
agreed.
Mr. Armstrong discussed the following days' agendas.
CSHB 65(FIN) was HEARD and HELD in committee for further
consideration.
CSHB 66(FIN) was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:59:51 AM
The meeting was adjourned at 10:59 a.m.
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