Legislature(2015 - 2016)SENATE FINANCE 532
03/12/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB27 | |
| Overview: Fy 16 Department of Health and Social Services | |
| Overview: Fy 16 Budget Department of Transportation and Public Facilities | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 27 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 12, 2015
9:05 a.m.
9:05:03 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:05 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Valerie Davidson, Commissioner, Department of Health and
Social Services; Sana Efird, Assistant Commissioner,
Finance and Management Services, Department of Health and
Social Services; Doctor Jay Butler, Chief Medical Officer,
Department of Health and Social Services; Mark Luiken,
Commissioner, Department of Transportation and Public
Facilities; Mary Siroky, Director, Division of
Administrative Services, Department of Transportation and
Public Facilities.
SUMMARY
SB 27 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 27 was HEARD and HELD in committee for further
consideration.
FY 16 BUDGET OVERVIEWS:
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES
SENATE BILL NO. 27
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, making
reappropriations, and making appropriations under art.
IX, sec. 17(c), Constitution of the State of Alaska,
from the constitutional budget reserve fund; and
providing for an effective date."
9:06:27 AM
^OVERVIEW: FY 16 DEPARTMENT OF HEALTH AND SOCIAL SERVICES
9:06:32 AM
VALERIE DAVIDSON, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES (DHSS), acknowledged the former
commissioner of DHSS, Bill Streur.
Co-Chair Kelly appreciated the acknowledgement of the
difficulties of commissioners.
Commissioner Davidson discussed her career background and
personal life.
Commissioner Davidson discussed the PowerPoint, "Department
of Health and Social Services, Senate Finance, FY 2016
Department Overview" (copy on file).
Commissioner Davidson highlighted slide 2, "Alaska
Department of Health and Social Services Organization
Chart." She shared that the organizational chart displayed
the deputies, who were also present at the meeting.
Co-Chair Kelly asked for more information about the budgets
attached to each division.
Commissioner Davidson shared the budget allocations of the
DHSS positions displayed on slide 2:
Chief Medical Officer and Public Health Director
Total Budget: $138.502 million
UGF: $53.561 million
Total positions: 488
Medicaid and Health Care Policy
Total budget: $1.958,127 billion
UGF: $860.488 million
Total positions: 1.314
Human Resources; Regulations; Health Information
Technology
Total budget: $16.869 million
UGF: $4.438 million
Total positions: 58
Family, Community, and Integrated Services
Total budget: $533.954 million
UGF: $311.555 million
Total positions: 1.579
Assistant Commissioner for Finance and Management
Services
Total budget: $44.869 million
UGF: $23.606 million
Total positions: 222
9:11:25 AM
SANA EFIRD, ASSISTANT COMMISSIONER, FINANCE AND MANAGEMENT
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
discussed slide 3, "Department Total FY 2014 Actuals." She
stated that the slide showed the department total FY 14
actuals, and how the budget was distributed in UGF, DGF,
other funds, and federal funding sources. She noted that
unrestricted GF was 49 percent of the Department of Health
and Social Services (DHSS) budget, 45 percent was federal
funds, and the remaining funding sources made up a smaller
percentage.
Ms. Efird addressed slide 4, "FY 2014 Actuals by Division."
The slide showed the FY 14 actuals, and were broken down by
division. She noted that Medicaid Services made up over 61
percent of the DHSS budget; and the other division's
percentages were also displayed.
Ms. Efird highlighted slide 5, "DHSS FY 2015 Management
Plan." The slide showed all funds with a total budget of
$2.7 billion, with Medicaid budgeted at $1.7 billion. She
furthered that there were other formula grant benefit
programs for $292.9 million, which was 11 percent of the
budget. The non-formula grants and benefits program were
budgeted at $190.7 million, which was 7 percent of the
budget. The additional non-formula other pieces of the
budget was $539.5 million, which was 20 percent of the
budget. She stressed that 80 percent of the DHSS budget was
included in the grants and benefit line.
Ms. Efird looked at slide 6, "Formula Programs":
Formula Program - a program with specific eligibility
standards which guarantees a specific level of
benefits for any recipient who qualifies. The
eligibility standards and benefits must be based in
statute and/or regulations.
Ms. Efird discussed slide 7, "Formula Programs":
Public Assistance
•Adult Temporary Assistance Program
•Adult Public Assistance
•Child Care Benefits
•General Relief Assistance
•Tribal Assistance Programs
•Senior Benefits Payment Program
•PFD Hold Harmless
•Energy Assistance Program
Senator Dunleavy looked at slide 6, and wondered if the
programs were imbedded in state law. Ms. Efird replied that
the programs were in statute.
9:15:43 AM
Senator Dunleavy wondered if the poverty rates were in
state statutes. Ms. Efird replied that the poverty rates
were in federal law.
9:16:15 AM
Co-Chair Kelly explained that the percentage was chosen by
the state. The state existed somewhere in the range set by
the state. Ms. Efird agreed and furthered that some
programs had additions above the federal guideline. She
explained that the federal portion of the energy assistance
program provided funding for up to 100 percent of the
poverty level. The state energy assistance program picked
up from the 151 to 225 percent level.
Senator Dunleavy asked if the state had any control over
costs, allocations, and benefits. Ms. Efird agreed to
provide that information. She stated that each program was
different.
Co-Chair Kelly queried the name of the fuel assistance
program. Ms. Efird replied that the federal program was the
Low Income Energy Assistance Program (LIEAP), and the state
program was the Alaska Heating Assistance Program (AKHAP).
Co-Chair Kelly wondered if there was an adjustment for the
lower fuel costs, or if it was only a percentage. Ms. Efird
responded that the eligibility criteria was based on many
different criteria.
Co-Chair Kelly felt that the question could be addressed in
subcommittee. Ms. Efird agreed to provide further
information.
Senator Bishop agreed that the energy issue was important.
Ms. Efird continued to discuss slide 7:
Medicaid Services
•Behavioral Health Medicaid Services
•Children's Medicaid Services
•Adult Preventive Dental Medicaid Services
•Health Care Medicaid Services
•Senior/Disabilities Medicaid Services
Children's Services
•Subsidized Adoptions/Guardianship
•Foster Care Special Need
•Foster Care Augmented Rate
•Foster Care Base Rate
Ms. Efird highlighted slide 8, "Service Population":
Priority 1: Health and Wellness Across the Lifespan
Core Service 1.1
Protect and promote the health of Alaskans
Core Service 1.2
Provide quality of life in a safe living
environment for Alaskans
Priority 2: Health Care Access Delivery and Value
Core Service 2.1
Manage health care coverage for Alaskans in
need
Core Service 2.2
Facilitate access to affordable health care
for Alaskans
Priority 3: Safe and Responsible Individuals, Families
and Communities
Core Service 3.1
Strengthen Alaska families
Core Service 3.2
Protect vulnerable Alaskans
Core Service 3.3
Promote personal responsibility and
accountable decisions by Alaskans
Vice-Chair Micciche stressed that the services that DHSS
provided were the most important services for Alaskans.
Ms. Efird discussed slide 9, "State of Alaska Department of
Health and Social Services." The page depicted the process
that the department had undergone over the most recent
three years. She shared that the previous administration in
DHSS had worked on performance based accountability and
budgeting exercises. The slide depicted the DHSS
priorities: health and wellness across the lifespan; health
care access delivery and value; and safe and responsible
individuals, families, and communities. She pointed out
DHSS had determined seven core services for vulnerable
Alaskans: 1) protect and promote the health of Alaskans; 2)
provide quality of life in a safe living environment for
Alaskans; 3) manage health care coverage for Alaskans in
need; 4) facilitate access to affordable health care for
Alaskans; 5) strengthen Alaska families; 6) protect
vulnerable Alaskans; 7) promote personal responsibility and
accountable decisions by Alaskans. Each division within the
department examined their budget, and must determine how
each division fit into the department. The divisions had
determined how they contributed to each core services, and
the dollar amount for each effort.
9:23:30 AM
AT EASE
9:25:15 AM
RECONVENED
9:25:35 AM
Ms. Efird continued to discuss slide 9. She explained that
DHSS had worked for three years, and was now at the
critical point in determining what data would show that the
department was achieving the results to meet each core
service. The divisions were working on the correct data to
collect and analyze the information to ensure that DHSS was
meeting the core services.
Co-Chair Kelly felt that the titles and grants should be
set apart in order for the chairman of the subcommittee to
analyze their growth over time.
Vice-Chair Micciche echoed Co-Chair Kelly's sentiments.
Ms. Efird stated that the grant discussion should include
an understanding of the performance measures within the
specific grants and awards.
Commissioner Davidson highlighted slide 10, "Health and
Social Services, Eight Divisions":
Alaska Pioneer Homes | Vickie Wilson (Acting Director)
•649 Positions
•$62,323.1 - FY2015 Management Plan
•2.31 percent of DHSS FY2015 Operating Budget
•Provide the highest quality of life in a safe
home environment for older Alaskans and Veterans.
Behavioral Health | Al Wall (Director)
•374 Positions
•$141,942.4 - FY2015 Management Plan
•5.27 percent of DHSS FY2015 Operating Budget
•Manage an integrated and comprehensive
behavioral health system based on sound policy,
effective practices and partnerships.
Commissioner Davidson addressed slide 11, "Health and
Social Services, Eight Divisions":
Office of Children's Services | Christy Lawton
(Director)
•509 Positions
•$143,709.6 - FY2015 Management Plan
•5.34 percent of DHSS FY2015 Operating Budget
•Prevent and respond to child maltreatment in
order to ensure safe children and strong
families.
Health Care Services | Margaret Brodie (Director)
•131 Positions
•$24,391.6 - FY2015 Management Plan
•0.91 percent of DHSS FY2015 Operating Budget
•Manage health care coverage for Alaskans in
need.
9:30:18 AM
Commissioner Davidson addressed slide 12, "Health and
Social Services, Eight Divisions":
Division of Juvenile Justice | Karen Forrest
(Director)
•503 Positions
•$58,824.7 - FY2015 Management Plan
•2.18 percent of DHSS FY2015 Operating Budget
•Hold juvenile offenders accountable for their
behavior, promote the safety and restoration of
victims and communities, and assist offenders and
their families in developing skills to prevent
crime.
Division of Public Assistance | Ron Kreher (Acting
Director)
•566 Positions
•$331,226.7 - FY2015 Management Plan
•12.30 percent of DHSS FY2015 Operating Budget
•Provide self-sufficiency and provide for basic
living expenses to Alaskans in need.
9:31:08 AM
Vice-Chair Micciche asked how the Division of Public
Assistance helps to provide self-sufficiency. Commissioner
Davidson replied that one of the requirements of many of
the programs administered by the Division of Public
Assistance included requirements that required recipients
to seek work, and included paths to self-sufficiency.
Vice-Chair Micciche shared that he would like divide the
beneficiaries from those that were temporarily receiving
assistance from those that could not physically support
themselves.
Senator Bishop shared that shared that DHSS and the
Department of Labor and Workforce Development (DLWF) work
together on public assistance. He felt that DLWF could also
provide further information.
Senator Dunleavy wondered how long people were on public
assistance. He also wanted to understand why the individual
remained on public assistance for an extended period of
time.
Co-Chair Kelly felt that DHSS was in a difficult position,
because the department provided services that were
statutorily required to distribute to the population. He
shared that he had some individuals in his family that were
almost pursued by the department to take advantage of
services. He wondered if there were discussions about
whether the department was creating a problem by outreach
to the population. He stressed that he did not want more
people on welfare. Commissioner Davidson agreed to provide
further information.
Co-Chair Kelly wondered if the five-year window for the
Temporary Assistance for Needy Families (TANF) program was
still in existence. Commissioner Davidson responded that
the maximum time that a person was eligible for TANF was 60
months in their lifetime. The average length of stay in
TANF in Alaska was approximately 26 months.
9:35:50 AM
Co-Chair Kelly wondered if the goal of the Division of
Public Assistance Division was self-sufficiency or
providing basic living expenses. Commissioner Davidson
replied that the goal was to provide basic living expenses
in order to move the individual to self-sufficiency.
Co-Chair Kelly felt that the two goals were in conflict. He
wondered how DHSS would navigate between the seemingly
opposed objectives.
Ms. Efird stated that there were varying degrees of Public
Assistance programs. She explained that there was an adult
temporary public assistance program for able bodied
Alaskans that needed help to find and secure jobs. She
furthered that there were other programs for the elderly,
disabled, and blind individuals that did not have a goal of
self-sufficiently.
Senator Dunleavy stressed that the committee was attempting
to determine whether the mission matched the activities
within the department. He felt that there was an
overarching philosophy to not needing the department. He
looked at slide 9, and looked at priority 1: "Health and
Wellness Across the Lifespan." He queried the goal of that
priority. He felt that there were possibly more people that
would be considered obese today that there were four years
prior. He opined that obesity lead to many problems in
health care like diabetes and hypertension. He queried the
department's efforts in reducing obesity, other than
outlawing fast food and mandating exercise. Commissioner
Davidson replied that DHSS was committed to the
preventative and wellness programs. She explained that the
best opportunities to educate individuals was when those
individuals were children. She felt that putting the
children on a path to a healthy lifestyle.
9:41:53 AM
Senator Dunleavy wondered if there was anywhere in the
process that rejected individuals who were not willing to
make lifestyle changes. Commissioner Davidson replied that
DHSS had a program for people that over-utilize the
emergency room. She stated that the state spent
approximately $29 million in unnecessary emergency room
care for Medicaid beneficiaries. She stated that there was
work to determine whether the people that were over-
utilizing the emergency room could go to a different
medical provider. She stated that the program was currently
voluntary, and people seemed to have a positive response to
the program. She announced that the recipients liked to
have someone pay attention to them, and give them care. She
hoped that the program may soon become mandatory. She
shared that there was a "lock in program" for someone that
had abused the system to lock them into a provider to
receive proper care. She stated that the department was
looking forward to encouraging shared responsibility for
improved health care. She remarked that health care
providers never asked a patient, "What about your health do
you want to improve this year? And how can we help you get
there?"
9:46:31 AM
Senator Dunleavy felt that DHSS wanted to better reform the
programs, to help individuals get out of the cycle.
Commissioner Davidson agreed.
Ms. Efird shared that slide 9 represented the first time
that the department had allocated the programs in this
manner and examined how the money was spent. She remarked
that Core Services 3.3 had the least amount of money. She
stressed that money should be spent on prevention and
accountability.
Senator Bishop requested a cost benefit analysis.
Senator Hoffman looked at slide 9, and wondered if he would
be provided the same spreadsheet for the governor's
proposed budget. Ms. Efird replied that the department had
not yet drafted a spreadsheet. She stated that the
department would align the final FY 16 budget with the
outline of slide 9.
Commissioner Davidson looked at slide 13, "Health and
Social Services, Eight Divisions":
Division of Public Health | Dr. Jay Butler
(CMO/Director)
•488 Positions
•$138,502.8 - FY2015 Management Plan
•5.14 percent of DHSS FY2015 Operating Budget
•Protect and promote the health of Alaskans.
Senior and Disabilities Services | Duane Mayes
(Director)
•171 Positions
•$63,385.8 - FY2015 Management Plan
•2.35 percent of DHSS FY2015 Operating Budget
•Promote the independence of Alaskan seniors and
persons with physical and developmental
disabilities.
9:50:35 AM
Ms. Efird looked at slide 14, "FY2016 Governor's Amended
Budget Compared to FY2016 Adjusted Base." She stated that
the governor's proposed budget was a decrease of $46.2
million in UGF. She explained that the decrease was the net
reduction. The actual reductions in the governor's budget
was almost $50 million, but the increases in salary
adjustment there was a slight increase in personal
services.
Ms. Efird highlighted slide 15, "Department of Health and
Social Services FY2016 Budget Comparison Unrestricted
General Funds (UGF)." She stated that the slide represented
the current budget after the House Finance Committee
version of the budget. The governor proposed a $46.2
million reduction; the House Finance budget subcommittee
suggested an additional $35.5 million reduction; and the
House Finance Committee suggested an additional $1.17
million reduction. The department's current budget proposed
in the House was $83 million, which was a 7 percent
reduction.
Co-Chair Kelly requested an 8 percent reduction scenario.
Ms. Efird agreed to provide that information.
Commissioner Davidson discussed slide 16, "Department
Updates":
•Alaska's Resource for Integrated Eligibility Systems
(ARIES)
•Medicaid Management Information System (MMIS)
•Medicaid Expansion
•Medicaid Reform
Commissioner Davidson highlighted slide 17, "Areas of
primary focus (4)
(2015 and beyond)":
1. Access to health care for Alaskans
•Medicaid Expansion: investing in the health of
Alaskans
•System Improvements: enrolling individuals and
paying providers
•Medicaid Reform: develop an Alaska plan
9:55:59 AM
Co-Chair Kelly would like to see DHSS version of an 8
percent reduction. He stated that the House presented their
version of a close to 8 percent reduction.
Senator Dunleavy shared that many of the health care
providers in his district did not get paid or paid on time.
He remarked that those providers were used to the
unprocessed claims. He shared that a doctor had emailed him
stating that the state had denied him $37,000 in claims. He
felt that there was a major software issue within the
department. He encouraged the department to fix the
software glitch. Commissioner Davidson agreed, and
furthered that that individual had a right to be paid. She
stated that the department was working with Xerox to
increase the timeliness and accuracy of paid claims.
Senator Dunleavy stressed that many doctors did not want to
expand Medicaid if it were overlaid on a faulty system.
Commissioner Davidson explained slide 16, "Department
Updates":
•Alaska's Resource for Integrated Eligibility Systems
(ARIES)
•Medicaid Management Information System (MMIS)
•Medicaid Expansion
•Medicaid Reform
Commissioner Davidson looked at slide 17, "Areas of primary
focus (4) (2015 and beyond)":
1. Access to health care for Alaskans
•Medicaid Expansion: investing in the health of
Alaskans
•System Improvements: enrolling individuals and
paying providers
•Medicaid Reform: develop an Alaska plan
10:01:31 AM
Commissioner Davidson addressed slide 18, "Areas of primary
focus (4) (2015 and beyond)":
2. Child welfare | keeping our children safe
•Maximizing relationships and resources to
improve outcomes for Alaska's children
•2400+ children in out-of-home placements
Commissioner Davidson looked at slide 19, "Areas of primary
focus (4) (2015 and beyond)":
3. Tribal and Federal Partnerships
•Enhancing partnerships to address health and
child welfare issues
•Removing barriers that impede our collective
efforts
Co-Chair MacKinnon wondered if there were efforts to
encourage the tribal organizations to report their federal
money. She shared that there had been conversations about
the tribal health organizations that utilized some federal
funding. She did not want to provide duplicate program
funding for communities. Commissioner Davidson replied that
it was important to communicate with the tribal
organizations to understand if there was duplications. She
shared that there would be a meeting in April of all of the
tribal child welfare providers in the state and other
individuals from the federal government.
Commissioner Davidson discussed slide 20, "Areas of primary
focus (4) (2015 and beyond)":
4. Improving the health status of Alaskans
•Prevent and control complications of obesity
•Reduce tobacco use
•Reduce abuse of alcohol and other drugs
•Prevent and improve management of injuries
•Improve immunization coverage among pre-school
aged children
•Prevent and control infectious diseases
•Prevent infant deaths
•Implement Healthy Alaskans 2020 action plan
Commissioner Davidson looked at slide 21, "Looking to the
Future, Governor Walker's 2014 - HSS Transition Report":
Five Recommendations (Department will explore further
in coming months)
1. Medicaid Expansion and Maximize Federal
Revenue
2. Administrative Improvements (i.e. Eligibility
and Payment systems)
3. Behavioral Health Policy Improvement and
Enforcement
4. Health Care Cost and Affordability
5. Safety Net Service Delivery (i.e. Children at
Risk, Community Access Hospitals,
Disproportionate Share Hospitals, Long Term Care)
10:05:42 AM
Senator Hoffman wondered how the marijuana initiative may
affect the DHSS budget. Commissioner Davidson deferred to
Dr. Jay Butler.
DOCTOR JAY BUTLER, CHIEF MEDICAL OFFICER, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES, announced that the impact of
marijuana legalization was unknown. He stated that there
were some concerns, and shared that he was in close contact
with his colleague from the other states that had recently
legalized marijuana. He announced that there was an
increase in emergency room visits for children who had
accidentally injected marijuana products.
Co-Chair MacKinnon stated that Legislative Budget and Audit
had recently run a review of the shortcomings of the
Medicaid system.
Senator Olson queried the possible supplemental budget
request number related to the marijuana legalization.
Doctor Butler responded that the costs may be related to
addiction services. He furthered that he could not
speculate the exact number.
Senator Olson wondered if the request would be in the
million or billion dollar range. Doctor Butler responded
that it would not be a request in the million dollar range.
10:11:08 AM
AT EASE
10:18:43 AM
RECONVENED
^OVERVIEW: FY 16 BUDGET DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES
10:19:19 AM
MARK LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, (DOT/PF) discussed the PowerPoint,
"Department of Transportation and Public Facilities,
Governor's Endorsed Budget Overview" (copy on file).
Commissioner Luiken looked at slide 2, "Mission and Core
Services":
"Keep Alaska moving through service and
infrastructure."
Core Services:
• Construction of transportation infrastructure
and facilities
• Maintenance and operations of the state
transportation systems and public facilities
• Measurement standards/commercial vehicle
enforcement
10:20:53 AM
Commissioner Luiken highlighted slide 4, "Fabric of
DOT/PF." He shared that the slide showed the matrix of the
organization. He stated that the functions that provide
service were displayed along the top of the slide,
including the regional components in the Northern, Central,
and South Coast region. The components utilized a large
portion of the operating budget for the services. The
international airport system was somewhat independent, and
was a revenue positive part of the organization. He
stressed that all funds generated by the international
airport system must be reinvested in the airport. The
marine highway system was an important part of the
organization, especially for Southeast and Southwest
Alaska.
Co-Chair MacKinnon wondered if the reinvestment of the
aviation dollars was state or federal law. Commissioner
Luiken replied that it was a federal law.
Co-Chair MacKinnon remarked that there was some foreign
aviation fuel that was not taxed, and wondered if there was
payment in lieu of tax (PELT) from the federal government
to the state of Alaska to entice airlines to land in the
facility and not pay the full aviation fuel tax.
Commissioner Luiken agreed to provide that information.
Co-Chair MacKinnon shared that there was a report that
suggested that there were millions of dollars in forgone
revenue because of not taxing the full fuel tax.
Senator Hoffman remarked that the state was attempting to
comply with federal law. He queried the reconciliation of
no dedicated funds to aviation.
10:24:58 AM
MARY SIROKY, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES,
explained that the department spent approximately 25
percent of its highway and aviation general funds on
airports. The department took in approximately $5 million.
She stated that DOT/PT could approach the federal
government to explain that the revenue was appropriately
utilized.
Co-Chair MacKinnon shared that she was in position of a
document from the Department of Revenue (DOR) dated March
6, 2015, in response to a question she offered to DOR. It
appeared that there were two separate foreign fuel tax
exemptions: the foreign fuel flight exemption and the
foreign fuel tax exemption. She stated that it had been
drastically underestimated, and the committee may want to
consider the two exemptions. There could be as much as
between $6 million and $43 million of uncollected tax or
credits under one of the exemptions. There was also
somewhere between $4.2 million and $57 million on the other
exemption.
Vice-Chair Micciche believed that those exemptions were
founded in state law as an ability to keep the
international airports at a lower cost of business.
Co-Chair MacKinnon understood that the airports had
benefited from the tax credits. She stressed that the $3.5
billion deficit had caused her to research the indirect
credits to examine whether or not those credits hold the
same value.
Commissioner Luiken continued to discuss slide 4. He
explained that the left side of the page represented the
headquarters component, and the services cut across all of
the operational components within DOT/PF. He shared that it
was his goal to continue to strengthen the department's
ability to provide core services; strengthen the
department's core competencies; and emphasize the core
values of integrity, excellence, and respect. He shared
that he wanted to examine ways to consolidate to find
efficiencies across the organization in order to decrease
the operating budget. He wanted to strengthen the
leadership of DOT/PF to move the department toward a "one
DOT."
10:29:48 AM
Commissioner Luiken looked at slide 5, "DOT/PF Assets."
• 3,180 full time positions
• 5,619 center line miles of roads/highways
• 79 Maintenance Stations
• 249 State Airports
• 2 International Airports
• 720 Facilities (4 million + sq. ft.)
• 11 Ferries
• 35 Ferry Terminals
• 22 Harbors
• 810 State Owned Bridges
• 7 Weigh Stations
Commissioner Luiken discussed slide 6, "FY2016 Governor's
Endorsed Budget." He stated that the DOT/PF budget was
divided between roughly $207 million of other funds and
$339 million of general funds.
Commissioner Luiken highlighted slide 7, "FY2016 Governor's
Endorsed Operating Budget Funding Sources." He remarked
that $268 million of other funds were attributed to the
interagency receipts at approximately 0.7 percent; the
highway equipment working capital fund at approximately 5.6
percent; the international airport revenue fund at 13.8
percent; the capital improvement program receipts at 25
percent; the statutory designated program receipts at 0.3
percent; the Whittier Tunnel toll receipts at 0.3 percent;
the uniform commercial carrier registration fees at 0.1
percent.
Commissioner Luiken addressed slide 8, "FY2016 General Fund
Governor's Endorsed Operating Budget by Allocations." He
pointed out that the three categories Administration and
Support; Planning; and Design and Construction totaled
roughly 7 percent of the DOT/PF operating budget. The
remaining 93 percent was for the marine highway system;
highways and aviation; and facilities maintenance and
operations. That 93 percent accounted for the direct
services that the department supplied to Alaskans.
Co-Chair MacKinnon asked for an explanation of the benefit
ratio of the investment for the two largest budget
components.
Commissioner Luiken surmised that Co-Chair MacKinnon wanted
an explanation of the cost of the systems and how many
people the systems supported.
Co-Chair MacKinnon agreed with that summation.
Commissioner Luiken replied that the marine highway system
supported roughly 10 percent of the Alaska population. The
highways and aviation component supported roughly 100
percent of the population. He stated that the communities
that could only be reached by air was roughly 82 percent of
the communities in the state.
10:34:25 AM
Senator Dunleavy wondered if the marine highway system was
a subsidized transportation method. Commissioner Luiken
indicated in the affirmative.
Senator Dunleavy noted that those communities that were in
northern Alaska received subsidies for airports, but he
noted that there were no subsidies for the actual flights.
Commissioner Luiken agreed.
Senator Dunleavy remarked that the rural communities that
were not connected by road or marine highway depended
solely on airports. Commissioner Luiken agreed.
Co-Chair Kelly asked for an examination of the marine
highway system with a reduction in the subsidy, compared to
other marine highway systems in other states.
Vice-Chair Micciche felt that there should be an
examination of the cost per user.
Co-Chair Kelly stressed that the budget for the marine
highway system was extremely expensive.
Senator Bishop queried a brief update of federal aviation
funding. Commissioner Luiken replied that the U.S. Congress
was currently reauthorizing the Federal Aviation
Administration's funding for future years. He stated that
the state was at the end of the previous authorization. A
few Alaska programs would be scrutinized, including the
essential air service. He remarked that the aviation
funding was expected to continue.
Senator Olson wondered what the marine highway budget
percentage had been in previous years. He wondered if it
was consuming a higher percentage for less and less of the
population. Commissioner Luiken responded that the budget
had remained roughly the same percentage of the budget over
time.
Co-Chair MacKinnon wondered how many federal dollars were
moved from roads to the marine highway system. Commissioner
Luiken replied that he had possibly misspoken earlier. He
stated that the marine highway system was recognized as a
national highway, the actual miles did not qualify within
the federal formula like the remainder of the surface
transportation system. He stated that the only components
that would qualify under a formula program were the
terminals and dock facilities associated with the
terminals. He furthered that that there was a ferry capital
fund to pay for significant maintenance on the vessels. He
stressed that the money was not taken from the road system,
because it was part of a separate formula.
10:41:23 AM
Co-Chair MacKinnon surmised that the state criteria did not
influence the distribution. Commissioner Luiken agreed.
Vice-Chair Micciche queried why the marine highway did not
qualify because of mileage. He wondered if the ferry system
could rearrange the voyages to qualify under mileage.
Commissioner Luiken did not believe that any ferry system
mileage could qualify under the federal formula.
Commissioner Luiken looked at slide 9, "FY2016 Governor's
Endorsed Capital Budget." The largest portion of the budget
was federal receipts.
Commissioner Luiken spoke to slide 10, "DOT/PF Regional
Boundaries." He stated that the new boundaries were to
share a work load. The central region was the largest
growing population, so consumed much of the work load. The
marine highway system was now all under one region. The
department was working through the transition.
Vice-Chair Micciche looked at slide 9, and felt that it did
not align with the earlier slides related to overall state
expenditures. Commissioner Luiken explained that slide 9
represented the capital budget, not the operating budget.
Ms. Siroky discussed slide 11, "National Environmental
Policy Act":
Cost
$1,235.4 CIP
4 Positions at DOT/PF
2 Positions at Law
DOTandPF Assumes Federal Highway Administrations role
to review and approve
• Environmental Impact Statements (EIS)
• Environmental Assessments (EA)
• Defend ourselves if sued
Advantages
• Control over decision making
• Quick decision making: time = money
• Federal role is eliminated
• Consult directly with other federal agencies
• Try innovative process or procedures
• Adopt new policies quickly if needed
Application process takes two years
10:47:52 AM
Co-Chair MacKinnon wondered if the plan to take over the
404 permitting was known as "primacy." Ms. Siroky replied
that it was known as "primacy" at DEC, but this was known
as assignment with FHWA. She stressed that DOT/PF had
obtained authority for categorical exclusions, or the easy
parts of the National Environmental Policy Act processes.
She felt that DOT/PF was more efficient than the federal
government.
Co-Chair MacKinnon wondered if there was a reasonable
expectation to complete the process with the indirect
funding, and avoid a legislative appropriation. Ms. Siroky
replied that the department had worked with other states
who were at various stages of the process. She stressed
that the program qualified for indirect funding. She
remarked that a good percentage of the program operations
could be charged to the specific capital projects. She felt
that the remainder of activities would be indirect cost
eligible. She felt that the program would never need GF
dollars.
Senator Bishop commented that he was in support of NEPA,
and felt that there was great work on the state
transportation system as related to the AKLNG project.
Vice-Chair Micciche requested a cost benefit analysis.
10:51:49 AM
Senator Hoffman looked at slide 9, and wondered if the CIP
funds included 89 percent from federal dollars, or were all
the CIP funds derived from GF dollars. Ms. Siroky replied
that the projects charged could be either federal or state
funds. She stated that most of the large projects in the
future would be primarily federally funded projects.
Senator Hoffman looked at slide 11, and wondered if the
$1.2 million was constant with inflation, or would the
amount increase drastically. Ms. Siroky replied that there
was no anticipated drastic increase, but understood that
any cost was subject to inflation.
Co-Chair Kelly looked at slide 12 and queried the House
Finance Committee's marine highway system reductions. Ms.
Siroky replied that the marine highway system reduction was
a total of $10.8 million.
Co-Chair Kelly surmised that there was an additional $7
million from the governor's budget.
Commissioner Luiken highlighted slide 12, "FY2016 Governor
Endorsed Operating Budget Changes":
New Initiatives
Deadhorse Airport Extended Operations; $570.7
Telematics Fleet Management System; $250.0
Full National Environmental Policy Act
Assignment; ('6005') $1,235.4
One-Time Items
Reduce Naturally Occurring Asbestos Ch 13 SLA
2012 (HB 258) (Ch 15 SLA 12 P45 L30 P46 L1) (HB
284): $(55.0)
Position Count Reductions
11 full-time; 1 part-time; 3 non-permanent
Reductions
Administration and Support RDU: $(1,034.0)
Design and Construction RDU: $(979.3)
International Airports RDU: $(325.6)
Highways and Aviation Components: $(5,837.5)
Facilities Components: $(194.9)
Alaska Marine Highway System: $(3,560.0)
Total Reductions: $(11,931.3)
10:57:04 AM
Commissioner Luiken addressed slide 13, "Reductions":
Administration and Support RDU
• Positions, travel, supplies, services, use
vehicle pools
Highways and Aviation - maintenance and operations
• 3 positions Bethel airport- reduce operations
to 5am to 10pm
• 1 position Akutan
• Winter maintenance - reduce number of position,
overtime, commodities
• Will use service levels to set maintenance
priorities
• Use federal preservation funding when allowable
to do routine maintenance
Design and Construction RDU
• Positions, travel, training, services
Alaska Marine Highway System
• Eliminate 39 weeks of service
• Bars
Co-Chair MacKinnon stressed that she was not advocating for
anyone to lose their jobs. She wanted to ensure that
eliminating vacant positions did not change any services.
She wondered if anyone was losing their jobs inside of the
position count reductions. Ms. Siroky replied that some of
those positions were filled, but some positions were vacant
to move people in order to mitigate the magnitude of
layoffs.
Co-Chair MacKinnon wondered if the prioritization of the
overall agency budget was conducted in the budget drafting.
Commissioner Luiken replied that he had instructed his
staff to prioritize the overall agency budget. He stressed
that the cost saving initiative would be the same across
the department.
11:01:20 AM
Ms. Siroky discussed slide 14, "FY2016 Governor Amended
Operating Budget Changes":
Reductions/Changes (UGF)
Statewide Procurement-Personal Services: $(200.0)
Central Region Highways and Aviation-Service
Level Reductions: $(1,942.2)
Northern Region Highways and Aviation-Service
Level Reductions: $(3,084.1)
Southcoast Region Highways and Aviation-Service
Level Reductions: $(1,062.7)
Marine Vessel Operations-Restore full service to
currently published schedule and account for
eliminated fuel trigger: $6,289.0
Commissioner Luiken looked at slide 15, "FY2016 Proposed
Fee Increases."
AMHS Fare Increase
• 4.5 percent = $1.8M
Deadhorse Landing Fees
• $285.0 in FY2016
• $570.0 in FY2017
• Whittier Tunnel Fare increase 10 percent
11:06:40 AM
Senator Hoffman looked at the fuel trigger of $3.6 million,
and the department would recoup $1.8 million, with a 4.5
percent increase in FY 16. He queried the increase
percentage in the subsequent five years. He wondered if the
department was planning ahead to account for the probable
increases. Ms. Siroky replied that the 4.5 percent increase
to the marine highway system was in addition to the fare
study that was in the process of completion, which would
attempt to balance the fares throughout the system. She
shared that the House passed an amendment that would double
the fare increase in January 2016. She shared that there
was a plan to build the ferry schedule on a budget that was
sustainable in terms of the state's current fiscal
situation.
Senator Hoffman wondered if there were any marine highway
fare increases beyond FY 16. He specifically wondered if
the state would attempt to recoup the $3.6 million fuel
trigger. Commissioner Luiken replied that the department
had conducted a fare study, so the department intended to
utilize the results of the fare study to rework the fare
system into a formula based system. He felt that there
would be increased revenue as a result of the new fare
system.
Senator Olson looked at the landing fees, and wondered if
there was a change in the gross weight limitation of 6,000
pounds. Commissioner Luiken replied that he anticipated
some comments regarding the base of the set weight.
Senator Olson assumed that the proposal was still 6,000
pound gross weight. Commissioner Luiken agreed.
Senator Olson queried the cost of collecting the $500,000.
He wondered if there would be additional personnel required
to facilitate the collection process. Commissioner Luiken
responded that there was an automated system in place that
could be used, and the expectation was to utilize the
current personnel.
Senator Olson wondered if the intention was to extend the
hours at the Deadhorse Airport. Commissioner Luiken replied
in the affirmative.
Senator Olson remarked that there were some aircraft that
did not have specific TSA clearances, so he felt that the
tax was discriminatory against the smaller aircrafts that
were attempting to provide necessary service to the smaller
communities.
11:13:43 AM
Co-Chair Kelly wondered if the matter could be dealt with
in the budget, or whether it was a policy issue. Senator
Olson replied that it would be a regulatory change, because
there were some federal issues.
Co-Chair Kelly asked if there could be some resolution with
Senator Olson. Commissioner Luiken agreed.
Senator Bishop wondered if any of the seven weigh stations
would be affected. Ms. Siroky agreed to provide that
information.
Vice-Chair Micciche remarked that the state was in
extraordinary times. He felt that there would be some
inconvenience to some residents of the state.
SB 27 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
11:17:57 AM
The meeting was adjourned at 11:17 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 031215 DOT Budget Overview.pdf |
SFIN 3/12/2015 9:00:00 AM |
SB 27 |
| 031215 DHSS Budget Overview Updated.pdf |
SFIN 3/12/2015 9:00:00 AM |
SB 27 |
| SB 30 031115 CRCL-CommentsOnSB30.pdf |
SFIN 3/12/2015 9:00:00 AM |
SB 30 |