Legislature(2019 - 2020)SENATE FINANCE 532
02/14/2019 09:00 AM Senate FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB20 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 20 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
February 14, 2019
9:02 a.m.
9:02:03 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Peter Micciche
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Lyman Hoffman
Senator Mike Shower
ALSO PRESENT
Senator Cathy Giessel; Donna Arduin, Director, Office of
Management and Budget; Lacey Sanders, Budget Director,
Office of Management and Budget; Senator Gary Stevens;
Senator Shelley Hughes; Dan Spencer, Administrative
Services Director, Department of Public Safety, Office of
Management and Budget.
SUMMARY
SB 20 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 20 was HEARD and HELD in committee for further
consideration.
Co-Chair Stedman asked people to silence their cell phones.
SENATE BILL NO. 20
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; 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."
9:02:51 AM
Co-Chair Stedman noted that the committee would consider a
Sponsor Substitute for SB 20. He provided an outline of the
budget process. He thought today's meeting was the
beginning of a lengthy process.
Co-Chair Stedman continued his remarks. He recognized that
Senate President Cathy Giessel was in attendance. He stated
that he would be monitoring decorum in the room,
encouraging respectful presentations and responses from
visitors. He anticipated there would be some people that
did not like what was being proposed. He reassured them
there would be an opportunity in another meeting to
testify.
Co-Chair Stedman invited the director of the Office of
Management and Budget (OMB) and her staff to the table. He
wanted to confine the presentation to the contents of the
slides being presented to keep the meeting on track. He
asked members to direct questions to the appropriate
parties, such as agency staff when in committee. He spoke
of the large budget reduction and the urgency the state
faced in terms of having to fix the problem within a couple
of years. The state faced a substantial structural deficit.
9:07:48 AM
DONNA ARDUIN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
introduced herself and indicated the budget director, Lacey
Sanders, was with her.
Ms. Arduin introduced the presentation "FY2020 Governor's
Amended Budget" (copy on file). She began with slide 2,
"Building the Budget: Core Programs":
• Public Safety
• Management of our natural resources
• Preserving maintenance of our transportation
infrastructure
Ms. Arduin reported that the governor introduced his budget
the previous day and talked about building the budget from
the bottom up based on the state's core programs. She read
the list of core services on the slide.
Ms. Arduin showed slide 3, "Building the Budget: Guiding
Principles":
? Expenditures cannot exceed existing revenues
? The budget is built on core functions
? Maintaining and protecting our reserves
? The budget does not take additional taxes from
Alaskans through taxes or PFD
? It must be sustainable, predictable, affordable
Ms. Arduin stated that the budget was built on a set of
guiding principles. She read the list of guiding principles
on the slide. She explained that the state did not rely on
a Constitutional Budget Reserve (CBR) draw in the budget.
The core principles were that the budget must be
sustainable, predictable, and affordable which was more
important than the budget being unbalanced and kicking the
can down the road to future legislatures.
Senator Wielechowski asked if Ms. Arduin considered taking
money from the Permanent Fund (PF) to pay for government to
be a tax on Alaskans.
Ms. Arduin commented that the guiding principal was that
the state did not take additional taxes from Alaskans
through taxes or the Permanent Fund Dividend (PFD), and the
budget was built on existing revenues. She noted a law that
allowed for a certain amount of money to be transferred
from the PF to the budget for appropriation purposes, the
Percent of Market Value (POMV), a statutorily existing
revenue. The budget was partially built on the statutory
amount that was allowable from a transfer from the
Permanent Fund Earnings Reserve Account (ERA).
Senator Wielechowski did not think Ms. Arduin answered his
question. He asked if she considered using funds from the
ERA to be a tax on Alaskans.
Ms. Arduin did not believe that the existing statute that
allowed the state to take a portion of revenues (about $1
billion) from the ERA through the POMV statutory structure
to use for the budget as a tax. She thought it was the
statutory limit the legislature determined that could be
taken from the ERA to allow the balances of the ERA and the
PF to continue to grow.
Co-Chair Stedman explicated that there was a statute that
limited the draw of the PF to 5.25 percent of the market
value over 5 of the 6 proceeding years. The intent of the
finance committee was to stay within the 5.25 percent draw.
He reported that no members had talked to him about
breaching that percentage. He continued that the dividend
was taken out of the 5.25 percent POMV draw. The remaining
balance of the draw was available for appropriation by the
legislature for core services. He thought there was a
philosophical question posed by Senator Wielechowski in
asking if the POMV draw was a tax. He did not believe the
OMB director was the policy person.
Senator Olson thought it was a tax on Alaskans.
9:12:27 AM
Ms. Arduin reviewed slide 4, "Building the Budget:
Historical Look-back," which displayed a line chart that
showed revenues and expenditures. She pointed out that
prior to FY 13, revenues exceeded expenditures. However,
since then it had been the other way around. She referenced
a chart from the Legislative Finance Division (LFD) that
exhibited the expenditure line, represented in orange,
which showed that spending levels were not too high. The
current chart suggested expenditures were too high because
they were exceeding available revenues and had been since
2013. She furthered that the gap between revenues and
expenditures had totaled over $16 billion in deficits.
Co-Chair Stedman asked Ms. Arduin to elaborate on how the
state backfilled the gap.
Ms. Arduin displayed slide 5, "Building the Budget:
Historical Savings, Revenue and Expenditures," which
contained a bar graph showing budget reserves. She pointed
out that due to chronic annual deficits, budget reserves
had been spent down from over $16 billion to the current
balance of about $2 billion.
Co-Chair Stedman defined that the orange bars signified the
Statutory Budget Reserve (SBR), which was a smaller savings
account established by the legislature. It took a simple
majority vote to withdraw money from the account. The blue
bar signifying the CBR took a three-quarter vote of the
legislature to access funds. It was the fund which the
legislature had depended on heavily to balance the budget
for the previous several years. It was the fund used at the
end to muster enough political support to get the budget to
the governor's table. Currently, the balance of the CBR was
about $2 billion. He asked the OMB director if the amount
was too much or too little. He asked why the committee
should have an interest in the positive balance of the CBR
rather than taking it to zero.
Ms. Arduin replied that by spending revenues the state did
not have, the state had been spending down its savings
accounts to about $2 billion. She suggested the state
needed to have reserve funds available for emergencies, and
she strongly cautioned against spending them down any
further. She explained that the governor believed the
fiscal problem needed to be taken care of presently rather
than later.
Co-Chair Stedman stated that historically $2 billion to
$2.5 billion had been a common target range for the CBR
balance.
Co-Chair von Imhof asked if the administration considered
the ERA to be a savings account. Ms. Arduin answered that
the administration considered the ERA (outside the POMV
draw) to be reserved for PFD payments rather than
appropriations to the budget.
9:17:25 AM
Co-Chair von Imhof considered that although Ms. Arduin's
response differed from the founding fathers and the trustee
papers written in the late 1970s and early 1980s, it was
counter to the several trustees who were there, including
her grandfather. She quoted her grandfather in saying that
the PF was set up as a "rainy day fund" to offset the boom-
and-bust cycle of a commodities market, which was
applicable to Alaska's oil revenues. The fund was set aside
for many years until it was large enough and until the oil
revenues began being depleted. The fund was set up to be a
renewable resource to be used on an annual basis, as long
as there was "sane and reasonable spending." She recognized
Ms. Arduin was trying to spend reasonably with the budget.
She stated she would be a protector of the PF including the
ERA. She agreed with Co-Chair Stedman that they were going
to keep a close eye on the fund.
Senator Micciche commented that Ms. Arduin sounded
supportive of the statutory structure of the POMV. He
requested that in future slides and presentations the
slides be changed to reflect the POMV as revenue if that
was the position of the administration. He thought it would
clarify that the POMV would contribute to filling the
state's fiscal gap.
Co-Chair Stedman asked if Senator Micciche had a comment.
He stated the committee would have OMB or LFD add the
additional information to a slide in a presentation. He
appreciated Senator Micciche's point that as the state
moved forward into the new dynamics of a POMV approach the
balance going over from the PF to the revenue side should
be clearly noted. He wanted the information to be clear for
the public and the legislature.
Senator Micciche remarked that FY 19 was the first year in
which monies from the ERA were used. He wanted the public
to understand that the gap was not as extreme with the use
of the POMV draw.
Senator Wielechowski stated that the governor's budget drew
about $1 billion from the ERA which equated to about $1500
per Alaskan. He wondered if the governor would veto any
draws from the ERA greater than that amount. Ms. Arduin was
not able to speak for the governor. She noted that the
governor had constitutional authority to veto any item or
bill that he chose. She would not limit his ability to do
so by saying what he would or would not do.
Ms. Arduin discussed slide 6, "Alaska Economic Trends:
GDP," which showed a line graph of the state gross domestic
product (GDP). She alleged that there had been economic
consequences to the state's unbalanced budgets. It
coincided with economic results in Alaska that had fallen
below the United States. She pointed to the state's gross
domestic product. The thicker blue line on the chart
represented Alaska's GDP and the thinner blue line was the
United States. Since 2012, Alaska's GDP had been
significantly lower than that of the United States and
continued to fall. The rest of the nation's GDP was
growing.
9:22:14 AM
Ms. Arduin turned to slide 7, " Alaska Economic Trends:
Population," which showed that more people were moving out
of Alaska in the period.
Ms. Arduin showed employment declining on slide 8, " Alaska
Economic Trends: Payroll." She pointed to the steep
divergence since 2012. Alaska continued to drop while the
rest of the country's employment was growing.
Co-Chair Stedman pointed to slide 7 and slide 8. He
mentioned that the state had set a policy of stimulation
within Alaska's oil basin of massive credits paid to the
industry to help modify and catch up on maintenance
starting in 2006. He recalled that employment in the
industry had increased from 8,500 to 16,000. He
reemphasized the large credit stimulus of billions of
dollars. The policy had changed in the previous several
years. Credits had been pulled out of the system. There had
been numerous conversations about the credits. He believed
there were still significant outstanding credits at
present. He thought the absence of the economic stimulus
was reflective of the state's job market. He thought some
of the change was driven by Alaska's policy to try to
expand and stabilize its oil basis.
Ms. Arduin thought Co-Chair Stedman made a wonderful
correlation. She suggested that changing tax policy to
increase taxes or reduce tax credits for oil exploration,
other businesses, and entrepreneurs was not a stable
environment for further investment in Alaska. One of the
reasons the governor believed the state needed to get its
fiscal house in order was so that the state stopped sending
uncertain signals to those who would invest in Alaska.
Senator Micciche was curious about slides 7 and 8. He asked
if Ms. Arduin had analyzed the potential effects on out-
migration and unemployment considering the magnitude of the
cuts proposed by the governor. Ms. Arduin stated that the
purpose of the slide was to show the effects of
overspending, having deficits in the state, and having
uncertainty for business investments by entrepreneurs and
oil explorers. She thought the numbers strongly suggested
that if the budget was in order and stability was
maintained, the numbers would be reversed adding GDP and
employment to the state.
Senator Bishop disagreed with Ms. Arduin. The current slide
and the previous slide were tied to Alaska's oil commodity.
He opined that people left the state because the price of
oil dropped, and capital spending decreased.
9:27:04 AM
Senator Wielechowski reminded Ms. Arduin that she had only
been in the state for 8 weeks and had not been around
during the oil tax debates. All the members at the table
had been around for the debates. He recalled that the state
had been promised that if it cut oil taxes and increased
tax credits to over $1 billion per year that it currently
paid, the state would see increased production, revenue,
and jobs. Instead, the state had seen a drop in jobs,
revenue, and production. He thought Ms. Arduin could
suggest that cutting taxes or leaving them at current
levels would provide many economic benefits. However, he
and other legislators had seen for themselves that the
economic benefits had not come to fruition.
Senator Micciche recalled that Ms. Arduin stated the data
suggested something but wondered if she had analyzed the
potential additional out-migration associated with the
reduction of the budget and of jobs. He wanted to know that
the state adequately analyzed their effects. Ms. Arduin
stated that the chief economist had been analyzing
potential impacts and clearly believed that the result of
solving the state's fiscal problems would lead to greater
private sector investment, outweighing the loss of jobs in
the government sector.
Ms. Arduin informed the committee that Director Sanders
would review the fiscal summaries of which there were two.
The first had to do with defining the problem (seen on
slide 9). She explained that the supplemental budget
request and the FY 20 budget dated December 14, 2019 could
be seen on the slide. She continued that the December 14th
budget was a starting point for the new administration and
contained a deficit of $1.6 billion.
Co-Chair Stedman invited Ms. Sanders to walk through
slide 9.
9:30:22 AM
LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, reviewed slide 9 "Building the Budget: Defining the
Problem." She explained that the fiscal summary which the
committee had seen previously. She highlighted the left-
hand column that showed the FY 19 management plan. It was
adjusted to include the supplemental numbers that had been
proposed to the legislature. It included numbers from the
supplemental bill and the disaster bill. There were also
several supplemental items in the operating and capital
budgets before the committee. She pointed to the top of the
page where general fund (GF) revenue was listed totaling
$2.8 billion. Fund withdrawal appeared below GF revenue and
included the transfer of the earnings reserve amount
through the POMV, an amount of $172 million from the SBR
for a supplemental appropriation to the Department of
Health and Social Services (DHSS), and restricted revenue.
The total revenue equaled $5.8 billion.
Ms. Sanders pointed out the appropriations section of the
table on slide 9. Appropriations included an operations,
capital, and fiscal notes line which she would address
shortly. She reported a deficit of $282 million.
Ms. Sanders looked to the right-hand side of the table,
which showed the FY 20 Unendorsed Dec. 14 Budget. A deficit
of $1.6 billion was identified and became the target from
moving the administration's budget forward.
Co-Chair Stedman referenced the $282.6 million deficit. He
recalled the state expecting a $600 million deficit that
would come out of the CBR. He thought it sounded like good
news that the state would have a lower deficit and would be
spending less.
Ms. Arduin stated that the reason for the lower deficit was
because of the updated revenue forecast put out by the
Department of Revenue in December 2019. She suggested the
numbers could change. The final deficit might be larger.
She agreed that taking less money from the CBR was better.
Co-Chair Stedman thought it was nice to highlight the good
news during budget meetings. He hoped revenues for FY 20
would be greater than expected and expenditures would be
less.
Ms. Arduin conveyed that the state was still looking at a
deficit for the current year. The good news was that the
governor was proposing a balanced budget for FY 20 without
a deficit.
9:34:22 AM
Ms. Sanders turned to slide 10, "Balancing the Budget:
Streamlined Fiscal Summary," which showed a new streamlines
fiscal summary for the FY 20 governor's amended budget. She
pointed to the top of the chart showing the projected
general fund revenue as well as the transfer from the ERA.
She highlighted a new item on the table - revenue from
fiscal notes. The governor introduced a bill that would
eliminate local petroleum property taxes and result in just
under $400 million of new revenue. Additionally, there was
$20 million in new revenue associated with the revolving
loan funds that were slated for elimination.
Ms. Sanders continued to discuss slide 10. She directed
attention to the lower portion of the chart outlining
appropriations including agency and statewide operations.
The total capital appropriations came to $143 million
primarily matching federal projects. The fiscal notes line
included the proposed crime bill repeal providing a surplus
of $20 million.
Co-Chair Stedman relayed that the committee would be taking
up some of the crime bill issues shortly which he thought
would reflect positive news for the public.
Senator Wielechowski asked for the total amount lost in
federal funds under the proposed budget and a detailed list
of the funds. He also asked for a list of state matching
funds required to receive those federal funds in order to
know what amount would have to be put back in the budget.
Ms. Sanders agreed to provide a list of federal funds and
the areas in which they were being reduced. She would also
provide the state match requirements corresponding to the
federal funds.
Co-Chair Stedman stated that the committee would be looking
at the information by department and the subcommittees
would be looking at further detail.
Senator Wielechowski reiterated his question regarding the
total amount lost in federal funding. Ms. Arduin referenced
a chart that had been added to the presentation under
"Additional Slides" (copy on file).
9:37:34 AM
AT EASE
9:38:09 AM
RECONVENED
Co-Chair Stedman asked for the delta on the federal funds
in aggregate.
Ms. Sanders looked at slide 3, "FY2020 Budget: Statewide."
The chart reflected a loss of about $500 million in federal
funding. She pointed to the funding comparison on the slide
which showed the FY 18 management plan plus the proposed
supplementals, the FY 20 governor's budget from December
14th, and the FY 20 governor's budget from February 13th -
the current proposed budget. On the right-hand side of the
slide was a comparison of positions from year-to-year.
Co-Chair Stedman asked Ms. Sanders to review the position
count on the slide. Ms. Sanders stated that the FY 19
management plan showed 20,416 total permanent full-time
positions. The amount of positions for the FY 20 governor's
budget on December 14th was 20,700. The number of positions
in the FY 20 governor's amended budget on February 13th
equaled 20,075.
Co-Chair Stedman clarified that the budget submitted by the
previous governor on December 14th was not being used for
much of anything. It might be used for comparison, but the
committee would be focusing on the FY 19 management plan
compared to the FY 20 governor's plan dated February 13,
2019. He wondered if a little less than 400 jobs were being
reduced. Ms. Sanders replied that the 400-position
comparison was to the FY 19 management plan. The number
referenced recently of 625 positions was compared to the FY
20 governor's budget dated, February 13, 2019.
Senator Wielechowski had read an Institute of Social and
Economic Research (ISER) study that concluded that the
proposed budget would result in 16,000 Alaskans losing
their jobs. Ms. Arduin thought the ISER analysis considered
only one side of the equation, which was the analysis of
the resulting reduction in government jobs. The analysis
did not take in to account the benefit to the private
sector of having more money through dividends, less money
going to government, and less taxes on private activity.
Co-Chair Stedman thought committee members were interested
in having an additional presentation by an economist about
expectations and an economical analysis reflecting both
sides.
Senator Wielechowski concluded that Ms. Arduin disagreed
with ISER's conclusion that with the proposed budget 16,000
Alaskans would lose their jobs. He asked if Ms. Arduin had
done an analysis and, if so, he wanted a copy provided to
the committee. Ms. Arduin stated that the chief economist
at OMB performed such analyses. She would be happy to have
him make a presentation to the committee. She reasserted
that the reduction of 600 government jobs would be more
than offset by the positive affects to the private sector.
Co-Chair Stedman stated that the committee would extend an
invitation to OMB to have a comparative discussion on the
ISER study. He hoped that the discussion could occur within
the following two weeks.
9:43:12 AM
Senator Wielechowski commented on the topic of analysis. He
asked, with many of the proposed cuts such as the ones to
education and revenue sharing, what kind of analysis had
been done regarding how much the reductions would increase
local sales taxes or property taxes. Ms. Arduin replied
that OMB had not done an analysis about increasing taxes.
The governor's budget did not propose to increase taxes.
Co-Chair Stedman thought that the question should be
directed to the economist during their presentation. He
would ask them to discuss expectations at the state level,
within the private sector, and amongst home owners. He
would also ask questions regarding some or all of the
proposals in revenue changes. The committee would keep the
economist busy.
Senator Olson commented that reliance on the private sector
to make up for lost jobs reminded him of the Hoover
administration after the stock market crash of 1929 that
resulted in the Great Depression. He was getting the same
flavor with the proposed budget. He brought up Ms. Sanders'
consideration of new revenues for the state regarding
petroleum property taxes. He asserted that the funds that
were characterized as new revenue were actually funds that
had been confiscated by the administration from local
government. He objected to the shifting of funds, as he
represented constituents from the pipeline corridor.
Co-Chair Stedman asked Senator Olson to explain what he was
referencing. Senator Olson relayed that the governor had
introduced a bill, SB 57 having to do with gutting the
petroleum property tax that the boroughs along the pipeline
corridor charged the oil companies for running services on
borough properties. The taxes collected totaled about $437
million. He continued that 85 percent of the amount came
out of his district.
Co-Chair Stedman clarified that the state had a 20 mil rate
for oil and gas production facilities in the state, which
was similar to home property tax. The funds were split
between the state and the municipalities. The governor's
bill would potentially change the split rather than the mil
rate. The bill would change the sharing relationship with
the affected boroughs.
Senator Bishop stated that the funds equated to $372
million for the North Slope Borough, $11.8 million for the
Fairbanks North Star Borough, $2.4 billion for the
Municipality of Anchorage, $15 million for the Kenai
Peninsula Borough, and $38.4 million for the City of
Valdez.
9:47:42 AM
Senator Micciche wanted to clarify for the public that Ms.
Arduin's statement about no additional taxes had to do with
state taxes rather than municipality taxes. He relayed that
the Kenai Peninsula Borough mayor was very conservative and
had done a very good job of cutting the budget and managing
responsibly. The reduction of $15 million for the borough
would result in additional sales taxes or property taxes to
the people of the Kenai Peninsula. He suggested that the
governor's budget was working towards not having a need to
increase taxes, but the burden would be shifted to
municipalities. He asked if Ms. Arduin realized that the
revenue had to be made up at the local level, likely
resulting in higher property taxes. Ms. Arduin could not
comment on how local governments would structure budgets
and treat revenues and expenditures.
Senator Bishop asked how many jobs the University
anticipated losing with the governor's proposed budget. Ms.
Arduin was unsure if the University had done an analysis
yet. She conveyed that, in fairness, the University had
just recently received the news of the budget reductions.
She had not expected the University to have a plan together
to meet its new budget challenge yet. She believed the
University would be on the committee's agenda at some
point. Senator Bishop thought the number was close to 1300
jobs.
Co-Chair Stedman informed the committee that members would
be hearing from the University on Tuesday of the following
week. He wanted to hear from the education commissioner,
the University president, and an economist to provide a
wholistic view for the purpose of making informed decisions
on the budget.
Senator Wielechowski had received a message from the school
board president in his district who informed him that the
loss to Anchorage in education funds would be about
$150 million and would result in the reduction of
approximately 1000 teachers. He reminded members that the
Alaska Constitution required the state to provide adequate
education for its students. He wondered what sort of
analysis OMB had done regarding how the cuts would impact
the state's ability to provide an adequately funded
education system with the proposed magnitude of cuts.
Ms. Arduin stated that as with municipalities, the state
did not tell school districts how to allocate revenues and
expenditures. A subsequent presentation would address
education. She thought there were some fair questions to be
asked based on data. For example, she reported that across
the board about 54 percent of district funding went towards
instructional spending, the lowest percentage in the
country. There were fair questions that could be asked of
school districts. The state did not tell school districts
how to spend their funds.
9:52:32 AM
Co-Chair Stedman indicated that the Department of Education
and Early Development would be before the committee along
with OMB to address certain questions. He thought the
meeting could be as soon as the upcoming Monday.
Senator Olson stated that, although the administration was
focused on balancing the budget, he was concerned with
ensuring the state did not get into another education
lawsuit. The Kasayulie Case and the Moore Case were
lawsuits in which the state spent millions of dollars to
defend itself. He wanted to caution members about the
sideboards of being required to provide an adequate public
education. Co-Chair Stedman asked Senator Olson to explain
the Kasayulie Case.
Senator Olson recalled that there were a number of rural
school districts that were not being given an adequate
amount of money to provide a quality education. It resulted
in a lawsuit against the state in which the plaintiffs
prevailed.
Co-Chair Stedman thought Senator Olson was saying there was
a third branch of government to consider, the court. The
state had to have adequate education funding for both the
metropolitan areas and the rural areas of Alaska. The
financial structure for education had to be equitable
across the state.
Senator Olson replied that it cost hundreds of millions of
dollars to provide adequate and equitable funding in
Alaska. He advised the finance committee to be very
cautious about addressing the situation.
Co-Chair Stedman would bring up the question with the
Commissioner of DEED.
Senator Micciche referenced slide 9 and slide 10. He asked
the chairman to bring the committee back to the point of
transparency by separating general fund by UGF and DGF. The
administration continued to discuss user fees which meant
Alaskans paying their own way through DFG. He thought
eliminating transparency by combining UGF and DGF was
problematic. He noted that in the additional slides on
page 2 UGF and DGF were separated. He would like to see
both highlighted in the future.
Co-Chair Stedman thought it was clear that members wanted
to see the funds separated. He had expressed the
committee's desire to both LFD and OMB. He believed it was
necessary to look at both GF sources and then combine them
to see all state spending. He noted there were items in the
budget that were self-funded and were proposed to be
eliminated. Not all UGF were the focus of the state fiscal
footprint reduction. He indicated that if Senator Micciche
wanted any further bifurcation to let him know.
9:57:27 AM
Ms. Arduin directed attention to slide 2 "Balancing the
Budget: Fiscal Summary" from the additional slides, where
undesignated general funds (UGF) and designated general
funds (DGF) were separated.
Ms. Sanders relayed that the fiscal summary had both the
FY 19 management plan and supplementals compared to the
FY 20 governor's amended budget. She highlighted that UGF
and DGF fund sources were separated out and also the total
fund source amount was listed.
Co-Chair Stedman asked for specifics regarding the change
in DGF restricted revenues from $1.1 billion to $932
million. Ms. Sanders stated that the increase in restricted
revenue from FY 19 over FY 20 had to do with supplemental
spending that was added in FY 19 including a few items in
the capital budget: An Alaska Marine Highway deferred
maintenance project and a capital project within the
Department of Environmental Conservation.
Co-Chair Stedman asked if Ms. Sanders was referring to the
third row from the top, where $1.1 billion went down to
about $933 million. Ms. Sanders answered in the
affirmative.
Co-Chair Stedman thought it was important to note if the
amounts were combined, the impacts of the marine highway
could not be seen.
Ms. Sanders discussed slide 11, " UGF and DGF By Department
- 12/14 Budget vs 2/13 Sponsor Substitute," which showed a
bar graph. Undesignated general fund spending was in dark
blue, and the DGF budget was in yellow; comparing the
December 14th budget to the February 13th budget. She
offered that OMB could re-run the graph to compare the
management plan. Co-Chair Stedman responded that the
comparison would be helpful.
10:00:50 AM
Senator Wielechowski referred to the University of Alaska
budget. He observed that $150 million was transferred from
UGF to DGF or receipt authority. He asked what receipt
authority was being contemplated. Ms. Sanders stated that
there was a fund source change within the UA budget of $155
million which was moved from UGF to receipts. The
University could develop a plan to collect the receipt
amount.
Co-Chair Stedman asked Ms. Sanders to provide a greater
explanation for the public of the fund source change,
specifically, the UGF and DGF distinction and why members
would have an interest in the difference between the two.
He drew attention to the UA bars on the chart. They were
almost equal. He wanted the public to understand the
difference.
Ms. Sanders explained that UGF dollars came from general
fund revenue and could be spent dollar-for-dollar. She
continued that restricted revenue dollars (DGF dollars)
were more limited in their use. Typically, UGF dollars had
statutory designations placed on them and could only be
used for the purposes they were collected. For example, the
tuition fees collected at the University would be used for
paying tuition.
Co-Chair Stedman provided a hypothetical scenario in which
the designated fund category equaled $1 billion rather than
$300 million. He concluded that it would not affect the
state's cash flow if additional sales could not be
generated. He asked if he was correct.
Ms. Sanders answered in the affirmative. She noted that
there were instances in which the state had designated
funds that did not require dollar-for-dollar collections in
receipts. Part of the administration's look working with
LFD over the next interim would be to identify where
funding sources were receipt supported and $1 had to be
collected in order to be expended. There were several
instances where the dollars were available and not having
to be collected.
Co-Chair Stedman thought the issue existed for the Alaska
Pioneer Homes. It was referred to in committee as hollow
receipt authority.
10:03:39 AM
Senator Wielechowski stated that the president of UA had
stated that the proposed cut would require the closing of
several campuses or approximately doubling tuition rates
for UA students. He wanted to see an analysis by OMB of how
many students would be forced to leave the University
because of not being able to pay a double tuition rate. He
aske if an analysis had been done. Ms. Arduin answered in
the negative.
Co-Chair Stedman stated that the committee would be asking
the economist the question. The question could also be
posed to UA on the following Tuesday.
Senator Wielechowski asked if Ms. Arduin and her office had
done any sort of analysis on the impacts of the cuts to
Alaskans. Ms. Arduin stated that OMB's chief economist
could present the implications of all of the budget
decisions to the committee including the governor's
proposal to pay full dividends through the PFD. The
economist could also provide analysis of all of the
positive economic impacts that would result in getting the
state's fiscal house in order.
Co-Chair Stedman asked if Ms. Arduin was referring to Mr.
King. Ms. Arduin responded, "Correct." Co-Chair Stedman
indicated the committee would add to the list of things to
cover in his presentation.
Senator Wielechowski asked if the analysis had already been
done prior to the release of the governor's budget.
Co-Chair Stedman suggested asking the economist when he was
before the committee.
Senator Wielechowski asked Ms. Arduin if the analysis had
already been done. Ms. Arduin responded that when the
economist was before the committee he would present the
analysis he had available.
Co-Chair Stedman suggested incorporating a timeline. It was
his understanding that some of the analysis had been done,
and some of it had not been completed.
10:06:25 AM
Co-Chair von Imhof appreciated slide 11. She thought it was
interesting to have federal funds and other state funds
listed along with DGF and UGF because, in the past, it had
been a habit of state government to cost shift UGF into
federal funds. In particular, it had occurred within the
Department of Health and Social Services (DHSS). She noted
there had been tribal compact agreements in which programs
that remained in existence were being funded differently.
She thought it was important to add two more colors to the
graph to represent other state funds and federal funds. She
asked for the rationale of comparing the December 14, 2018
budget (Governor Walker's exit budget) versus using the
FY 19 enacted budget.
Ms. Arduin stated that slide 11 was an overview slide. The
administration was showing how the governor was proposing
to solve the $1.6 billion deficit. She continued that the
$1.6 billion deficit was a comparison of the past
administration's proposed budget and Governor Dunleavy's
budget. She suggested that there would be slides for each
of the agencies showing all of the funding sources in the
FY 19 management plan, the December 14th budget, and the
proposed FY 20 budget.
Co-Chair von Imhof reported that in looking at the FY 20
governor's amended budget compared to the FY 19 budget, the
magnitude of the reductions were less.
Co-Chair Stedman thought the committee was interested in
comparing the FY 19 management with the FY 20 governor's
budget dated February 13th and little interest in the
previous governor's budget submitted in December. He
thought including the December 14th budget was a
distraction and not relevant. He would work with members on
how they wanted to see the data presented. He agreed with
Co-Chair von Imhof and other members as to how the data
should be presented. He did not want data to be skewed one
way or another. The decisions the legislature was going to
have to make would be difficult.
10:10:20 AM
Senator Wielechowski asked about oil tax credits. He
wondered if the amount of oil tax credit payments by the
state from AIDEA had increased by $227 million. Co-Chair
Stedman asked for the senator to clarify what information
he was referring to. Senator Wielechowski was looking at
pages 68 and 69 of the budget beginning on page 68, line
29. He read directly from the referenced pages and lines.
Co-Chair Stedman explained that the committee was trying to
get a general feel for the budget in the current meeting,
rather than getting into the line item detail.
Ms. Arduin stated that OMB would have a presentation on the
issue and would provide information on the details of the
budget in the current day and into the following week. She
reported that the statutory minimum for oil and gas credits
was proposed to be paid in the budget for FY 20, as well as
the remainder of the unpaid statutory minimum for FY 19.
Co-Chair Stedman stated that the matter would be addressed
in more detail in subsequent meetings, as well as the
matter of the bond package.
Ms. Arduin spoke to slide 12, "FY2020 Budget: Policy
Groupings ":
? Reducing dependence
? Business process realignment
Unleashing entrepreneurialism
? Program reform
? Maximizing return on assets
? Outsourcing
? Reducing regulatory burden
? Eliminate duplication
? Non-essential programs
? User pay
Ms. Arduin noted that the slide showed additional guiding
principles for formulating the proposed budget. She
reviewed the list on the slide.
Co-Chair Stedman asked if Ms. Arduin would discuss the
substantial amount of legislation coming forward to help
enact the proposed budget. He asked her to provide an
overview of expectations, as the budget bill was not the
entire package. Ms. Arduin stated that not all the bills
accompanying the budget had been introduced. There were
several bills that would enforce the proposals in statute.
For example, if the administration proposed to eliminate a
program in the appropriations bill, it would be followed
with a statutory proposal to eliminate the program in
statute.
Co-Chair Stedman's impression was that OMB would provide
documents that would make it easier for committee members
and the public to understand all of the components. He
asked if he was correct. Ms. Arduin answered in the
affirmative.
Co-Chair Stedman asked for an estimated time-frame when the
bills would be submitted. Ms. Arduin asked if the Senator
was talking about all of the bills.
Co-Chair Stedman asked if the information would be
presented all at once on the following Monday or over the
following several weeks. He was not trying to hold Ms.
Arduin to a specific date, rather to provide a larger
picture. Ms. Arduin responded that on the following Monday
OMB was scheduled to discuss statewide items including the
legislative proposals. However, she could not give a
timeline as to when all of the bills would be drafted and
presented to the legislature. She would present an outline
for the committee in the presentation on the following
Monday. Co-Chair Stedman added that that it would begin on
Monday and for however long thereafter.
10:15:52 AM
Senator Bishop asked if Ms. Arduin had heard anything from
the state's credit rating agency since the budget was
presented. Ms. Arduin stated that OMB and the Department of
Revenue were scheduled to discuss and review the budget
proposal with the credit rating agency, as was the
customary practice on the part of the state.
Senator Bishop wanted Ms. Arduin to ask how the proposed
budget would impact the credit rating of local municipal
governments.
Co-Chair Stedman suggested when the committee was dealing
with the forthcoming package of potential changes needed to
implement the proposed budget, OMB had done a very good job
of encouraging departments to provide a list of priorities.
It was important to have a basis for making decisions. He
was curious when committee members would be given that data
for their subcommittee work.
Ms. Sanders stated that agencies had prepared their
priority lists which were available. She would make sure to
provide them to the subcommittees.
Co-Chair Stedman stated that the legislature had been
waiting for years to see prioritized lists from the
agencies. The legislature had never been able to get the
departments to prioritize a list. The committee was very
interested in the information and would take them under
advisement.
Senator Olson requested that, in addition to the economist
from OMB, the committee invite economists from the
Department of Labor and Workforce Development and from ISER
to make a presentation.
Co-Chair Stedman encouraged members to communicate with the
co-chairs as to who they might want to have come before the
committee. He relayed that the Department of Public Safety
would be up next. He reviewed the protocol for hearing from
the individual agencies.
Co-Chair von Imhof stated that there had been conversation
about forthcoming bills to accompany the budget. She
referenced crime bills that were currently in committee.
She asked if testifiers could address whether the bills
with fiscal notes that had not been passed but were in play
were included in the budget. If they were not included, she
wanted to know about the fiscal impacts.
Co-Chair Stedman wanted to strive for clarity in the entire
budget. He acknowledged Senator Gary Stevens and Senator
Shelley Hughes in attendance.
10:21:59 AM
DAN SPENCER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF PUBLIC SAFETY, OFFICE OF MANAGEMENT and BUDGET, conveyed
Commissioner Price's apologies for not being in attendance,
as she had to go up North unexpectedly. He moved to slide
14, "FY2020 Budget: Department of Public Safety," which
showed the budget changes in the FY 20 governor's amended
budget from the FY 19 management plan. He reported a
decrease of about $3.1 million in general funds, an
increase of about $620,000 in other funds, and an increase
of about $9.2 million in federal funds. He noted that there
was a very small change in positions. There was a reduction
of two permanent full-time positions in the FY 20
governor's amended budget, and there was no change in the
number of part-time positions or non-permanent positions.
Co-Chair Stedman clarified that looking at the middle graph
reflecting the FY 20 Governor's plan from 12/14/19 there
was an increase of two people. Mr. Spencer answered in the
affirmative. Co-Chair Stedman asked about vacancy issues.
Mr. Spencer was not sure what the vacancy issues were for
the non-trooper positions. However, there were currently 40
trooper vacancies. He relayed that there was an academy
starting at the end of the month with 18 recruits signed up
for the training.
Co-Chair Stedman asked if the 40 vacancies were included in
the 807 positions listed on the graph. Mr. Spencer replied
in the negative. He indicated that the 807 depicted
positions rather than persons.
10:24:15 AM
Senator Micciche clarified that the 40 positions were
included in the 807. The number reflected all positions
budgeted for the department. He asked if he was correct.
Mr. Spencer answered, "That's correct."
Co-Chair Stedman asked about the comparison between the
FY 19 management plan to the FY 20 governor's budget
(2/13). Mr. Spencer stated that on the left-hand side of
the page it showed a decrease of about $3.1 million in
general funds, an increase of $620,000 in other funds, and
an increase of $9.2 million in federal funds.
Co-Chair Stedman wanted Mr. Spencer to clarify that the
department would have more money for the FY 20 budget and
that there would be more cops rather than less. Mr. Spencer
confirmed that the department would have more money to run
the budget. He reported DPS would have fewer general fund
dollars and more of all other funds.
Senator Micciche asserted that the number one concern of
Alaskans was the issue of crime. There were four
administration crime bills and a couple of non-
administration crime bills to address the issue. There was
a demand for additional law enforcement resources around
the state. It appeared that the state was only adding two
positions. He was unsure if two additional positions and
the filling of the other 40 vacancies would satisfy the
expectations of Alaska's public. He asked Mr. Spencer what
legislators should say to Alaskans that are focused on the
issue.
Mr. Spencer responded that he would tell Alaskans that the
department would not ask for money it would not use.
Currently, with the 18 individuals coming into the Alaska
State Troopers academy and the Alaska Wildlife Troopers
academy and the individuals planning to attend the Fall
academy all of the trooper positions would be filled. Only
after all of the positions were filled would the department
request new positions. Historically, there were extremely
high vacancy rates for state troopers. Neither the Office
of Management and Budget nor the commissioner wanted to
request money for positions that could not be filled. He
would bring up additional funding once all the vacancies
were filled.
Co-Chair von Imhof asked why the positions had been
difficult to fill and why Mr. Spencer was confident the
positions could be filled in the coming Fall. Mr. Spencer
was uncertain why the recruitment unit had difficulty
filling the positions. In the current year, the Alaska
State Troopers had its largest academy in years. He
highlighted that there were more municipal employees
attending the next academy than state troopers. He had seen
downturns in recruitment. He would respond back to the
committee on the reason for the increased enrollment.
Co-Chair Stedman asked about a previous legislative concept
that included a salary increase for state troopers with a
2-year step increase.
10:28:31 AM
Mr. Spencer stated that in the previous year for the Alaska
State Troopers, there was a classification increase for
Alaska State Troopers. The increase had the effect of
increasing the troopers salary by 7.5 percent on average.
In addition, there were letters of agreement with the
Public Safety Employees Association for an additional
increase in salaries, about another 7.5 percent, and a
couple of other smaller changes to salaries. He referenced
an ongoing issue of other police departments in Alaska,
such as the Anchorage Police Department, having wages
higher than Alaska State Troopers. The state had lost some
state troopers to that. Wages in the Lower 48 had
increased, also adding to the problem of losing troopers to
other employment opportunities. He reported that in exit
surveys he had consistently seen comments about wages paid
in other places. The intent was to address the issue of
wages and to help with recruitment. He was uncertain if the
reasons he had mentioned were driving recruitment.
Co-Chair Stedman recalled a two-year implementation and
asked if there were any changes in it. Mr. Spencer stated
that the information the Senator had remained in the
budget.
Senator Micciche thought it was important that the public
knew that there had been a study which had made clear that
in order for the state troopers to be on par with other law
enforcement organizations, an increase was necessary.
Otherwise, the gap was too great for individuals to be
interested. He thought the changes had made a difference in
morale and had increased the numbers in the academy.
Co-Chair Stedman asked if the increase was included in the
FY 20 budget. Mr. Spencer responded that it was in the FY
20 budget. He noted there was a separate section in the
operating budget bill that addressed salary increases.
Senator Olson noted Mr. Spencer had witnessed the Village
Public Safety Officer (VPSO) numbers fluctuate. Currently,
the numbers were down significantly. He asked if the same
considerations had been provided, such as exit surveys with
VPSO personnel to find out their reasons for leaving
service.
Mr. Spencer did not know if DPS had conducted surveys. He
reminded the audience that VPSOs were not state employees.
Rather, they were employees of the regional non-profits or
the one municipal government that ran a VPSO Program. He
noted that in FY 12 VPSO salaries were increased and in
FY 19 VPSO salaries were increased by 6 percent. The state
offered a retention bonus of $5,000 for VPSOs that stayed
for a minimum period of 3 years. There was one other salary
incentive. The state recognized that the VPSO Program had
many of the same challenges as the trooper program. He
would be addressing the VPSO Program being down in numbers
later in the presentation.
10:32:44 AM
Mr. Spencer spoke to slide 15, " FY2020 Budget: Department
of Public Safety Snapshot":
? Training Academy - Interagency Receipt Authority for
Anticipated Training
Academy Revenues (+$500.0 Other)
? Statewide Support Executive Branch 50% Travel
Reduction (-$103.8 GF)
? Align Village Public Safety Officer Funding (-
$3,000.0 GF)
? Reverse State Support for Civil Air Patrol (-$302.3
GF)
? Federal Receipt Authority for the High Intensity
Drug Trafficking Areas Program (+$5,000.0 Fed)
? Council on Domestic Violence and Sexual Assault
Federal Receipt Authority for Victim of Crime Act
Grant Award (+$4,000.0 Fed)
Mr. Spencer noted that the training academy was in Sita
where the state troopers, many municipal police officers,
and VPSOs received their training. He drew attention to the
$500,000 other increase was for interagency receipts -
payments that would come from the Alaska State Troopers and
the Alaska Wildlife Troopers to the academy (a separate
component because of the increased enrollment). There was
also a $150,000 general fund program receipt that was not
bulleted on the slide for additional collections from
municipalities for sending their law enforcement officers
to the academy.
Co-Chair Stedman asked about the capacity of the police
academy. Mr. Spencer did not know the answer. He estimated
40 recruits as the maximum class size.
10:34:27 AM
Mr. Spencer continued to address slide 15. He pointed to
the 50 percent reduction to travel within statewide
support. He explained that most of DPS was not affected by
the decrease. The travel reduction applied to the
commissioner's office, the administrative services
division, information services, the crime lab, and the
academy.
Ms. Arduin added that the 50 percent travel reduction was a
statewide reduction that would be reflected in other agency
budgets. Certain functions were exempt from the travel
reduction such as law enforcement.
Mr. Spencer noted the reduction to VPSO funding of
$3 million which was a continuation from a supplemental
appropriation. The reduction was not a comment about the
VPSO Program. The sum reflected the amount lapsed in the
past. In each of the previous 2 years about $3 million was
left over. The amount had been about $800,000 in each of
the 2 years before that.
Mr. Spencer continued to discuss the proposed reduction to
VPSO funding. He reported that at the end of January 2019,
the VPSO Program had 42 people in it. At its high point and
very briefly, the program had 101 VPSOs. Since then, the
program had been in a steady downward trend. The funding
over the previous 4 years, after a brief reduction in
funding at the start of the prior governor's
administration, had been relatively flat. The number of
VPSO that were being employed by non-profits in the
Northwest Arctic Slope Borough continued to decline. The
department would like to see the numbers improve, as it was
the job of the department to promote and provide public
safety. The state had viewed the VPSO Program as a partner.
The state was also looking at other innovative ways to
improve public safety overall instead of only the law
enforcement aspect. He recalled that the VPSO Program,
started in the '70s and was not as much about law
enforcement as it was about other things related to public
safety such as search and rescue, fire, and emergency
medical response. The department wanted to get the VPSO
Program doing what it was intended to do and taking full
advantage of the available funding in order to make a
difference in communities.
10:38:57 AM
Senator Olson referenced the VPSO Task Force that he had
chaired. He noted that one of the strong recommendations
was for the legislature to provide compensation for VPSOs
equitable to the compensation the unionized state troopers
received. He wondered if the recommendation was followed
and whether Mr. Spencer remembered the amount recommended
during the VPSO Task Force era.
Mr. Spencer could not speak to the previous four years, as
he was not with the department during those years. He
reiterated that VPSOs had received a salary increase. He
agreed that the Alaska State Troopers were state employees
and were represented by a bargaining unit. The Village
Public Safety Officers were employees of various non-
profits. The state had a salary schedule which included
merit increases. He could get back to the committee in
terms of what happened over the past several years. He did
not know.
Senator Wielechowski did not understand the rationale for
the proposed reduction to the VPSO Program He argued that
the legislature had a constitutional obligation to provide
public safety to both rural and urban areas. The wages and
benefits were set so low that it was difficult to attract
qualified VPSOs, yet the administration cut the funding. It
appeared as though the department was admitting to failure.
Mr. Spencer rebutted that the department was not admitting
to failure or reducing funding for VPSO salaries. The
department was basing its reduction on historical patterns.
The VPSO Program had not been able to fill all of its
positions or use all the money that was appropriated. The
governor's commitment was to not ask for money that was not
going to be spent. If the VPSO Program had enough VPSOs
onboard and it appeared the program needed additional
funding, he was certain the governor would reevaluate the
program. The administration's attitude had been that the
state would fund the positions if the non-profits could
fill them. Senator Olson did not agree with Mr. Spencer.
10:42:10 AM
Senator Wielechowski thought there was a problem in saying
"Don't even try." He suggested that if the VPSOs came up
with a solution in July, August, or September, they did not
have the funds to fill the positions. He thought Mr.
Spencer was saying, "Give up. Don't even try." He wondered
what would be wrong with putting the funds into the budget
and urging the program to find solutions. If the money was
not spent it could be rolled back into the general fund.
Ms. Arduin stated that the department was trying very hard
to work on the issue. The issue had been around for many
years. The administration would welcome any proposals
legislators might have to try to improve the situation. She
reiterated that if the program filled all of its positions,
the administration would be asking for expenditure
authority.
Co-Chair Stedman suggested that the committee wait for the
attendance of the commissioner to have a dialogue regarding
the VPSO Program. He thought there was concern that some of
the small villages needed additional assistance. In some
cases, some of the villages had gone a long time without a
VPSO. In some instances recruitment was difficult. He
wanted to speak further with the commissioner about
attracting more participation. The smaller communities were
very concerned about the safety of their children and
families. If there were more people interested in becoming
VPSOs, he believed the legislature would support additional
funding.
Senator Olson considered budget deficits, and asked Mr.
Spencer about any potential plans for VPSO aircraft. He
recalled when he started there was a Jet Ranger and
currently there were two A-Stars, one of which was moth-
balled in Fairbanks or was being readied for liquidation.
He asked for confirmation.
Co-Chair Stedman thought some of his questions could be
posed to the commissioner. He asked Mr. Spencer to comment.
Mr. Spencer had not had the opportunity to have discussions
with the commissioner regarding the aircraft. He thought
the question would be better answered by the commissioner.
10:45:42 AM
Mr. Spencer continued his remarks on slide 15. He drew
attention to the reversal of funds for the Civil Air
Patrol. He recalled that in the previous year the
legislature put in a one-time appropriation of $302,300
general fund dollars. The item had not been added back in -
one of the differences between the FY 19 funding and the
FY 20 proposed funding.
Co-Chair Stedman asked if the one-time funding had been
historically in the budget. Mr. Spencer answered in the
affirmative, although the amount varied. There had been
many discussions over the years whether the state should
continue to fund the program. The legislature made the
choice to include the appropriation in the budget in FY 19.
He was unsure of the history of the requests.
Mr. Spencer discussed the federal receipt authority for the
High Intensity Drug Trafficking Area (HIDTA) Program. The
president gave the state the designation of a HIDTA
Program. The state had already received $2.5 million in
federal grant funding and would receive another $2.5
million in federal FY 19. He was expecting the state would
receive $2.5 million each year into the foreseeable future
and possibly more. The department was asking for additional
receipt authority so that when the funds came in they could
be spent. The department was working with law enforcement
around the state to try to do something to reduce the crime
rate, the drug abuse rate, and associated crimes.
Co-Chair Stedman asked if the funds could be used for drug
interdiction with drug dogs to help with mail coming from
various delivery sites. Mr. Spencer understood that
anything was fair game to stop the flow of drugs coming
into the state.
Co-Chair Stedman had heard from his district that drugs
were flowing into small communities that did not have much
of a law enforcement presence. He used Prince of Wales
Island as an example. He thought it tied in with VPSO needs
along with working with drug enforcement to close the gaps.
He advocated for additional drug dogs.
10:49:16 AM
Co-Chair von Imhof thought it was good news that the state
had received some of the grant funds. She wondered if the
funding would flow into FY 20. She noted the $5 million for
the HIDTA program and the Victim of Crime Act Grant Award
of $4 million for the Council on Domestic Violence and
Sexual Assault (CDVSA). She observed that although there
were additional funds of $9 million, there were not many
additional employees. She wondered how the money would be
spent. If the money was going to be spent on programs, she
asked who would be running the programs.
Mr. Spencer stated that there were joint agreements with
several agencies. The department would spend funds on a
variety of things. An example was reimbursing municipal
police officers for some time. The department might
purchase equipment or drug dogs. It was not always
necessary to hire more individuals. Much of the time the
department could do more with the individuals it already
had with more funding. He would be able to provide
additional detail in the finance subcommittee.
Mr. Spencer addressed the last item on slide 15, which was
the Council on Domestic Violence and Sexual Assault federal
receipt authority for the Victim of Crime Act (VOCA) Grant
Award of $4 million in federal funds. The funding included
$500,000 for prevention efforts, safe housing, and
shelters, particularly in rural areas. The department had
requested receipt authority from the Legislative Budget and
Audit Committee for these funds.
Mr. Spencer noted that in the previous year the legislature
had made a change that allowed Permanent Fund Dividend
criminal funds, funds from convicted felons, to be used for
domestic violence and sexual assault. He reported that
$215,000 of authority was added to the CDVSA budget.
Co-Chair Stedman discussed the schedule for the following
day.
SB 20 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:53:57 AM
The meeting was adjourned at 10:53 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY2020 Gov Amend Budget to SFC 2.14.19.pdf |
SFIN 2/14/2019 9:00:00 AM |
SB 20 |
| FY2020 Gov Amend Budget to SFC 2.14.19 Additional Slides.pdf |
SFIN 2/14/2019 9:00:00 AM |
SB 20 |
| SFIN-2-15 Dept. of Law Vacant Positions.pdf |
SFIN 2/14/2019 9:00:00 AM |
SB 20 |
| 2.14-15.19 OMB Response.pdf |
SFIN 2/14/2019 9:00:00 AM |
SB 20 |
| FY19 Mgt Plan to FY20 Gov Amend Federal Funds Comparison.pdf |
SFIN 2/14/2019 9:00:00 AM |
SB 20 |
| Dept Chart All Funds.pdf |
SFIN 2/14/2019 9:00:00 AM |
SB 20 |