Legislature(2019 - 2020)SENATE FINANCE 532
02/22/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB20 | |
| Departmental Review: Health and Social Services | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 20 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 22, 2019
9:02 a.m.
9:02:25 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 Lyman Hoffman
Senator Peter Micciche
Senator Donny Olson
Senator Mike Shower
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Lacey Sanders, Budget Director, Office of Management and
Budget; Sana Efird, Administrative Services Director,
Department of Health and Social Services, Office of
Management and Budget; Senator Cathy Giessel; Senator Mia
Costello; Senator Elvi Gray-Jackson; Senator Gary Stevens.
SUMMARY
SB 20 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 20 was HEARD and HELD in committee for further
consideration.
Co-Chair Stedman remarked that the committee endeavored to
provide the senators and the public with a broader feel for
the budget due to the severe changes in policy. He informed
that the Department of Health and Social Services (DHSS)
Senate Finance Subcommittee would be chaired by Co-Chair
von Imhof. He thought there would be many subcommittee
meetings as DHSS was one of the state's biggest cost
drivers and the state was trying to better align its
expenditures with its revenues.
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."
9:05:08 AM
^DEPARTMENTAL REVIEW: HEALTH and SOCIAL SERVICES
9:05:08 AM
LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, introduced herself.
SANA EFIRD, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES, OFFICE OF MANAGEMENT and
BUDGET, relayed that she would discuss a high-level
overview of the major budget changes in the presentation
"State of Alaska; Office of Management and Budget; FY 2020
Governor's Amended Budget; Presentation to the Senate
Finance Committee; February 22, 2019; Budget Director Lacey
Sanders" (copy on file)."
Ms. Efird looked at slide 2, "Department of Health and
Social Services."
Ms. Efird turned to slide 3, "FY2020 Budget: Department of
Health & Social Services," which showed two bar graphs
entitled 'Funding Comparison,' and 'Budgeted Position
Comparison.' She specified that the slide depicted the
funding totals and a comparison of the FY 19 management
plan to the governor's FY 20 proposed amended budget. On
the left side, the graphs showed the FY 19 total budget was
$3,249,951,500; compared to the proposed FY 20 governor's
amended budget of $2,468,798,400, which was an
approximately 25 percent reduction.
Ms. Efird continued to address slide 3. She listed the fund
types and amounts and noted that the largest portion of
"other" funds were interagency receipts. The General Fund
(GF) $908,655,100 was composed of Unrestricted General
Funds (UGF) and Designated General Funds (DGF). The UGF
made up 90 percent of the GF total, and the other 10
percent was DGF. The largest portion of DGF was from
Pioneer Home resident receipts, Social Security child
support collections, background check fees, and other fees.
9:08:24 AM
Co-Chair Stedman asked if Ms. Efird could break down the GF
component of the FY 19 Management Plan.
Ms. Efird stated that in the FY 19 Management Plan, the UGF
funding was $1,146,733,100; and DGF was $87,213,100.
Co-Chair Stedman asked for Ms. Efird to review the position
count.
Ms. Efird elucidated that the right-hand graph on slide 3
showed the changes in budgeted positions. There was a loss
of 291 positions from FY 19 to the FY 20 amended budget.
The majority of the positions (about 268) were in the
Alaska Psychiatric Institute (API). She reminded that the
department was exploring different private management of
API in FY 20. The positions were shown as moving into a
contractual line and were not being deleted. The other
largest portion of positions being deleted was in the Nome
Youth Facility. There were 16 positions in the treatment
and detention services, 13 of which were proposed to be
lost. Eleven of the positions were currently filled.
Co-Chair Stedman asked Ms. Efird to help the committee
understand the reduction in federal funds.
Ms. Efird stated that generally the largest reduction in
federal funds from FY 19 to FY 20 was in the Medicaid
program.
Co-Chair Stedman asked if the reduction was allocated or
unallocated.
Ms. Efird stated that the reduction was allocated in the
Medicaid Services component, and OMB was currently working
on a plan to show specifics of what the reduction would be
allocated for.
Senator Wielechowski referenced Ms. Efird's remarks about
privatization of API. He noted that the change record
detail showed a shift of $28 million from personal services
to services and wondered if the amount signified the cost
for exploring privatization, or the cost of privatizing
API.
Co-Chair Stedman stated that the next slide would address
the subject of API.
9:12:34 AM
Ms. Efird advanced to slide 4, "FY2020 Budget: Department
of Health and Social Services Snapshot ($ Thousands)":
? Increase Behavioral Health Opioid Grants in the
offices of Epidemiology and Substance Misuse and
Addiction Prevention (+6,120.0 Fed)
? Alaska Psychiatric Institute:
? Explore Privatization of the Alaska Psychiatric
Institute (-$0.0, PFT -248)
? Alaska Pioneer Homes:
? Fund Alaska Pioneer Homes Payment Assistance
(+$15,000.0 GF)
? Implement Rate Increase to Cover Full Cost of
Care
? Realign Pioneer Home Funding (-$16,792.4 GF, -
$16,386.2 GF/MH)
? Medicaid:
? Implement Medicaid Services Cost Containment
Measures and Reforms (-$225,000.0 GF, -$450,000.0
Fed)
? Eliminate Adult Dental Medicaid Benefit (-
$8,273.6 GF, -$18,730.9 Fed)
? $271 million reduction from status quo
projections (inclusive of bullets above)
Ms. Efird addressed Senator Wielechowski's question. She
explained that the state was in a contract for management
services through the end of June, with the option of
continuing the contract. The fund shift reflected the
policy decision to continue the contract.
Senator Wielechowski asked if the $28 million shift to
services was for privatizing API, or if the funds were for
exploring privatizing API.
Ms. Efird stated that when the budget was put together, the
administration was exploring the option of privatization.
Since that time, the commissioner had declared an emergency
declaration for API and there was a contract for a private
entity to manage the facility.
Senator Hoffman asked about the $450 million reduction in
federal funds and asked if any federal approval was needed.
Ms. Efird explained that the department was working with
the Centers for Medicare and Medicaid Services (CMS) to
explore the possibility for another 1115 Demonstration
Project, which would require federal approval. There were
also other internal initiatives to examine ways to contain
and sustain the Medicaid budget.
Co-Chair Stedman asked about the significance of the 1115
waiver.
Ms. Efird explained that the 1115 waiver was an option for
states to compile a budget request to CMS to look at an
innovative way to look at covering eligibility groups or
additional services that needed to be approved.
9:15:46 AM
Senator Hoffman thought the administration was putting the
cart before the horse. He suggested that the waivers would
be obtained before the reduction. He asked what would
happen if the waiver was not granted, and the authorization
to receive the funds was not in the budget. He thought it
seemed like there was a major gamble being taken. He
commented on the seriousness of the situation.
Co-Chair Stedman asked for an explanation and for Ms. Efird
to comment on the flexibility the state had or did not have
pertaining to federal funds. He mentioned getting billed in
a supplemental.
Ms. Efird stated that the bill also contained additional
language requesting approval for allowing the department to
be able to use the current funds in the Statutory Budget
Reserve (SBR) (which she believed to be around $172
million) as a backstop if approval from CMS was not
received.
Senator Hoffman commented that in other pieces of
legislation there were fiscal notes that followed public
policy. He thought the public policy question of making the
changes described by Ms. Efird should be included in SB 20.
He thought that the budget presented should not be
contingent upon legislation. He asked why there was a
deviation from the norm when it was critical in health care
delivery to the citizens of the state.
Ms. Efird stated that there were many initiatives that the
department was exploring that would not require CMS
approval. The intention was not to harm Alaskans in any
way. The department wanted to provide the most sustainable
Medicaid program to cover low income Alaskans; but with the
policy direction for the current administration, the
department needed to match revenues to expenditures. She
reminded that Medicaid was one of the largest GF spends for
the state.
9:19:31 AM
Co-Chair Stedman asked if Ms. Efird could address the
reason why the SBR was used. He reminded that the state had
two major savings accounts - the Constitutional Budget
Reserve (CBR) and the SBR. He thought it seemed out of the
ordinary of historical practices to access the savings
account as proposed. He asked why it should be used and why
the committee should consider changing the proposal.
Ms. Sanders stated that the SBR fund was chosen as an
account within the state that had a sufficient balance to
meet the needs. She asserted that DHSS was undertaking a
significant list. The funds were proposed as a multi-year
appropriation that would cover FY 19 through FY 21 while
the department worked to get approval from CMS and
implement the changes.
Co-Chair Stedman expected the committee would take a
"jaundiced" look at accessing the SBR.
Senator Hoffman commented that the topic was federal funds.
He emphasized that the budget could not be balanced with
federal funds. He did not think the testifier's comments
were apropos to the question at hand of balancing the
budget. He thought the proposed budget was playing with
people's lives.
Co-Chair von Imhof considered the upcoming slides and
commented that it would be helpful if the timing of the
various proposals was explained. She did not think many of
the items could be rolled out July 1, 2019; and there were
critical components to accomplish first. She thought it was
important to include rationale behind each forthcoming
bullet point. She thought the proposed cuts were lacking
rationale.
Senator Shower referenced slide 3 and asked how many of the
proposed eliminated positions had been vacant.
Ms. Efird did not have the number at hand but restated that
the majority of the positions were from API. She reiterated
that the bulk of the positions were for the Nome Youth
Facility; and of the 13 positions, 11 were filled.
9:24:10 AM
Ms. Efird stated that the next two slides were high-level
overviews of major reduction proposed in the governor's
amended budget.
Ms. Efird spoke to slide 5, "FY2020 Budget: Department of
Health and Social Services Snapshot ($ Thousands)":
? Repeal Senior Benefits Payment Program (-$19,986.1
GF)
? Reduce Adult Public Assistance (-$14,700.0 GF)
? Move to 1983 standard for maintenance of effort
calculation
? Reduce Temporary Assistance for Needy Families
(TANF) Maintenance of Effort (MOE) (-$16,912.0 GF)
Work with federal partners to reduce MOE
requirements
? Repeal Hold Harmless Program (-$17,724.7 Other)
? Provide option to receive dividends through
monthly payments to minimize disruption to
assistance recipients
? Close Youth Detention and Treatment at Nome Youth
Facility (-$2,000.0 GF)
? Reduce Public Health Nursing (-$2,000.0 GF)
? Statewide Support Executive Branch 50% Travel
Reduction (-$448.6 GF)
Ms. Efird reminded of the opioid crisis in the state and
noted that the increased federal funds were to support the
opioid emergency. She restated that when the proposed
budget was being composed, there had been many
conversations about the right path to ensure safety for
patients and staff at API. There had been a number of
emergency situations at the institute, and API had been
under a corrective action plan and the commissioner had
declared an emergency. There was a contract in place for
management of API, through June 30. If deliverables were
met, there was a second phase to engage with a contractor
to take over management.
Ms. Efird continued to address slide 5. She discussed
Alaska Pioneer Homes, and noted that there would be a
proposed increase to residents that would reflect the
actual cost of providing the service. Along with the rate
increases, there would also be a budgeted $15 million as a
payment assistance grant program to ensure that no
residents were evicted, and low-income seniors would
continue to be admitted per regulation.
Ms. Efird discussed reductions to Medicaid as listed on
slide 4. She stated that the administration was working to
explore various options and ways that the department would
meet the reduction.
9:27:52 AM
Senator Wielechowski asked about the Medicaid reduction of
$225 million. He asked for further explanation about items
listed in the change record detail. He asked if there was
concern about how a rate change would impact physician
availability for Medicaid patients.
Ms. Efird did not feel qualified to discuss diagnosis-
related groups and other options being considered. She
stated that the department was working on a full plan that
would be provided to the committee that would outline the
exact steps and options that the department felt would be
achievable in FY 20. Additionally, the plan would outline
stages of implementation.
Co-Chair Stedman asked Ms. Efird to bring more detailed
information back to committee regarding Senator
Wielechowski's question.
Senator Bishop asked if there was going to be an increase
in fees for current residents of pioneer homes.
Ms. Efird answered in the affirmative and stated that the
proposed rates would be implemented July 1, 2019 for FY 20.
She noted that there would be a required regulation process
with public comment. She continued that the budget was
built on the rate increases going to into effect.
9:30:23 AM
Senator Micciche asked about the length of the previous
1115 waiver process.
Ms. Efird reminded that she had started in her current role
only a month previously. She recalled that the current
process had been ongoing for over two years. The 1115
waiver demonstration project had been approved for the
portion for substance use disorder treatment services, but
coverage of increased behavioral health services was still
awaiting approval from CMS.
Co-Chair Stedman thought more information was needed
regarding the pioneer home rates. He shared that he had two
family members that had passed away at the Pioneer Home and
had two members that were current residents. He assumed
that the state was not going to evict current residents.
Ms. Efird answered in the affirmative.
Co-Chair Stedman asked if the intention was to make the
homes self-supporting. He asked if there were plans to
liquidate, sell, or privatize pioneer homes.
Ms. Efird was not aware of plans to do what Co-Chair
Stedman asked.
Co-Chair Stedman understood that rates would be adjusted.
He recalled that Level 2 for mid-rate care cost
approximately $5,000 per month, which would be doubled.
Ms. Efird did not have the proposed rates available for
consideration. She believed that what Co-Chair Stedman
stated was correct. She shared that the department was
considering going back to five levels of care to more
accurately "levelize" the cost of care with the actual
needs of each resident. She did not know the amount of the
proposed rate increases but stated that the figures would
soon be released and open for the public comment process.
9:34:10 AM
Co-Chair Stedman recalled that residents produced a
financial disclosure and list of assets upon entry to the
Alaska Pioneer Home. He thought if a person had over
$10,000 in liquid assets a person would have to pay. He
thought most people's major asset was a home. He thanked
the department for working with individuals to sell homes
and pay the bill. He understood that under the new proposed
program, he a person had to be financially qualified to
move into the home. He asked about residents that did not
have resources to cover the fees.
Ms. Efird stated that under the proposal, with the Needs-
Based Assistance Grant Program, individuals would continue
to be supported in the Pioneer homes. The administration
was not proposing to evict Pioneer Home residents based on
income. The budget proposed to show the cost of the state
providing the service. She referenced a waitlist process.
Co-Chair Stedman asked if an individual could enter the
Alaska Pioneer Home if they had no resources.
Ms. Efird answered in the affirmative. She stated that
individuals would still be able to enter the homes based on
current regulations. The budget was trying to show the true
cost of providing the service and was requiring income
information so that those that could afford to pay the cost
would be billed.
9:37:41 AM
Co-Chair Stedman thought the practice Ms. Efird described
was already in place. He had run an account up to $50,000
before he sold his father's house. He asked Ms. Efird to
get back to the committee with a comparison of current
policy and what was proposed. He thought it seemed as
though what was being presented was a monthly increase. He
was personally concerned about Alaska Pioneer Home policy.
He recalled that the first home was constructed during
territorial days. He was concerned about a colossal policy
error with regard to caring for the state's elders.
Ms. Efird stated the department would provide more detail
during the subcommittee process. She addressed the topic of
privatization and affirmed that the department was
exploring contracting out hospitality services if cost
effective. The Juneau Pioneer Home did contract out laundry
services and other hospitality services.
Co-Chair Stedman asked Ms. Efird to provide the enrollment
of current Alaska Pioneer Homes by home with information as
to which residents were paying or were on payment
assistance. He commented that he had not seen extremely
wealthy people as residents of Pioneer Homes.
9:41:59 AM
Senator Micciche considered the $271 million in reductions
to Medicaid as proposed on slide 4. He did not see any
policy changes that would take a couple of years to be
approved. He asked if Medicaid eligibility would be changed
in Alaska to result in real reductions. He asked if the
administration was going to stop the mismanagement, such as
Indian Health Service (IHS) "leakage" that should not have
occurred. He thought what was proposed on the slide would
result in a supplemental budget rather than a real
reduction.
Senator Micciche continued his remarks and reiterated the
concept of a tax shift to local communities. He used the
example of emergency care in community hospitals.
Co-Chair Stedman asked for Ms. Efird to address the $200
million IHS issue when answering Senator Micciche's
question.
Ms. Efird stated that the intention of the department was
to provide the committee with very specific information on
what the department felt were achievable reductions in the
Medicaid program that could be implemented in FY 20 and for
the next few years. She noted that the department had been
looking at Medicaid reform for the past several years, and
continued reform initiatives would be "a heavy lift." She
stated that it was the department's intention to forward a
formal more solid plan, with consideration of the "backstop
language" included in the budget bill in the case that the
department was unable to meet the CMS approval timeframes.
9:45:31 AM
Senator Micciche thought that the department had fought
real reductions for years. He reiterated that real changes
took time. He did not know how the state could expect to
see the reductions in FY 20. He thought wholesale changes
in eligibility and the waiver process was extremely
unlikely to occur in FY 20.
Co-Chair von Imhof considered the proposed elimination of
the Adult Dental Medicaid Benefit as listed on slide 4. She
asked why the item was chosen for elimination in lieu of
other optional services items.
Ms. Efird affirmed that Adult Dental had been chosen as a
policy decision. There would still be emergency dental
services available under the Medicaid Healthcare Services
budget.
Co-Chair von Imhof was interested in policy. She noted that
there were 24 optional services, and not all states offered
all 24. She thought it might be useful to compare with
other states. When she talked to health care providers that
offered adult dental, they had found adult dental was often
something that would bring individuals into a clinic
because of the pain involved and could result in provision
of additional medical services. She thought that if adult
dental services were lost, important access to patients was
lost. She questioned the comparative importance of other
items on the optional services list.
9:48:46 AM
Senator Wielechowski asked about API. He had seen studies
that showed that privatization of API was the highest-cost
option. He thought that the change record detail in the
proposed budget showed a net savings through privatization.
He wondered how the savings was possible when research had
shown the opposite.
Ms. Efird stated that the budget did not show a savings as
a result of privatization of API. She thought Senator
Wielechowski observed the movement of dollar amount of all
items into the contractual line items. The department did
not contend that privatization of API would be a cost
savings. She contended that the basis for the policy
decision was for the safety of the patients and the staff.
Senator Wielechowski asked if there were provisions in the
collective bargaining agreements with API employees that
dealt with the issue of privatization.
Ms. Efird stated that there was a requirement for a
feasibility study within the bargaining agreement. There
had been a feasibility study prepared two years previously.
She was not included in the union discussion. She was sure
the unions were in conversation regarding the requirements.
Co-Chair Stedman stated that at a local level, when there
was a hospital closure or sale a termination study was
required. He mentioned the hospital in Sitka. He asked if
there would be a termination study so the committee would
thoroughly understand any termination costs with API. He
was interested in the same question applied to the topic of
the Alaska Marine Highway System (AMHS).
Ms. Efird was not aware of a termination study. She stated
that the department would be happy to provide more detail
on API during the subcommittee process.
9:51:55 AM
Senator Wielechowski was interested in considering the
withdrawal liability for API and AMHS, and he thought there
would be millions of dollars withdrawn from the Public
Employee Retirement System (PERS). He was also interested
in analysis of the cost of potential lawsuits due to lost
wages of employees. He addressed procurement issues and
thought there was a clear violation of procurement laws. He
asked if there had been an analysis of whether the
department had followed procurement laws.
Ms. Efird stated that the contract was procured under a
sole source procurement that was based on a declaration of
an emergency.
Co-Chair Stedman encouraged members to keep questions
related to financial matters. He thought the overall point
was the committee wanted to know about any financial
implications of closing the API facility, as well as other
liquidations.
Senator Bishop wondered about Alaska Retirement Management
Board projections into the future.
Co-Chair Stedman thought the subcommittee could address the
question.
Senator Olson agreed with Co-Chair von Imhof's comments
about adult dental care creating increased access to
patients. He asked if there were hospitals that were in
danger of closing due to the proposed Medicaid reductions.
He asked which hospitals had been identified.
Ms. Efird did not have the specifics of the proposed
Medicaid reduction, but would provide the information to
the committee. She stated there was no intention under the
reduction to close any of the state's critical care access
hospitals.
Senator Olson understood that closures were not planned but
thought it could be a result of the proposed budget. He
asked if it was true that there were six hospitals that
were in danger of closure.
Ms. Efird could not comment on Senator Olson's question.
9:56:06 AM
Ms. Efird went back to slide 5. She spoke to other
reductions, including repeal of the Senior Benefits Payment
Program and reduction of the Adult Public Assistance. She
noted that the reductions were based on the maintenance of
effort current calculation. The state was currently under a
total expenditures calculation. The department would need
to ask the Social Security Administration for a change in
the way the state currently calculated the funds to another
option. If approval was received, there would be a savings
of $14.7 million.
Ms. Efird continued to address slide 5. There was a
proposed reduction to TANF, and a proposed repeal to the
Hold Harmless Program. There had been a policy decision to
minimize disruption to assistance recipients.
Ms. Efird addressed the proposed closure of youth detention
and treatment at the Nome Youth Facility. Probation
services would be continued. She addressed a proposed
reduction to public health nursing by $2 million. She spoke
to the 50 percent travel reduction to statewide agencies,
which constituted a $448.6 million reduction for DHSS.
9:59:44 AM
Co-Chair von Imhof considered the bullets on the slide
addressing maintenance of effort. She asked if the federal
government had every approved a change to the maintenance
of effort due to economic hardship. She thought the change
was very difficult to achieve. She asked if the federal
government had indicated how long the change might take.
Ms. Efird stated that the program director for public
assistance had been in conversation with the federal
government. She did not have information about the latest
conversation. She was not aware of another state that had
made the change.
Co-Chair Stedman thought it was hard to claim a state of
poverty with $60 billion in the bank.
Senator Micciche reminded that he had wanted to reduce the
maintenance of effort for the previous three years. He
asked if the Hold Harmless Program was not possible, since
the state had been told the program could not be used for
credit.
Ms. Efird stated that the department was looking at the
option and working with the congressional delegation.
Senator Bishop mentioned TANF. He stated that there were a
number of schools in the Fairbanks Northstar School
District in which over 50 percent of children were at or
below poverty level; and qualified for federal lunch and
breakfast programs. He thought if the state were to cut
TANF, it would exacerbate the problem of child hunger.
Ms. Efird stated that she would communicate with the
director to see if there would be an effect as Senator
Bishop described.
Senator Bishop thought the state was trying to improve
educational outcomes and thought improved nutrition would
work towards the goal.
10:03:15 AM
Senator Wielechowski asked how many seniors would be
impacted by the loss of the Senior Benefits Payment Program
and asked about the average benefit. He wondered about
other social programs that might increase as a result of
the loss of the benefits.
Co-Chair Stedman asked for more information on the Senior
Benefits Program.
Ms. Efird informed that the Alaska Senior Benefits Payment
Program paid monthly cash benefits to Alaskans who were age
65 or over and had low to moderate income. The payment
levels were dependent upon available funding and on the
number of applicants. A little over 11,000 seniors received
payment through the program in 2018.
Co-Chair Stedman recalled that several years ago the
program was changed to be needs-based.
Senator Micciche stated that the program had been evaluated
and removed the top tier so that the neediest seniors would
receive the benefits.
Co-Chair Stedman stated that the program had been evaluated
to curtail costs and those still receiving the benefits
were the neediest. He asked for more detailed information
about recipients of the program, including location in the
state.
Ms. Efird agreed to provide the information.
Senator Wielechowski asked how much seniors were getting on
average and wondered where else the need would be met if
the funds were lost. He asked for similar additional
details on TANF recipients.
10:06:51 AM
Senator Hoffman discussed about the proposed $17 million
reduction for TANF and the maintenance of effort that
required working with federal partners. He asked about the
justification for the proposed reduction. He wondered if
the program was not working, or if the reduction was to
balance the state's budget.
Ms. Efird re-stated that there was a policy decision to
match expenditures with revenues, and the program was one
pot of GF money that the state spent to receive federal
TANF funding. The department was exploring changing the
state's share for the maintenance of effort for the
program.
Senator Hoffman asked if there were tribes that were
supporting implementation of the reduction.
Ms. Efird stated that seven tribes administered TANF
programs and received federal dollars directly. If a tribe
no longer wanted to administer the program, the recipients
that were still eligible would be administered through the
state.
Senator Hoffman asked if there were any tribes that
supported the reduction.
Ms. Efird had not heard from any tribal organizations in
support of the proposed cut.
Senator Hoffman was certain that tribes would be discussing
the proposed cut with the congressional delegation. He
thought there would be no support for the proposal.
10:09:43 AM
Senator Olson considered the impact of the maintenance of
effort change and wondered what would happen if the change
was not approved. He asked what services would be reduced.
Ms. Efird stated that the funds went directly to the tribes
to support TANF. She did not have specific information as
to how the funds were used but believed that some of funds
were used for benefits for recipients. She stated that if
the change was not approved, the state would have to meet
the maintenance of effort requirement.
Senator Olson asked when the proposed Medicaid reductions
were planned to be implemented.
Ms. Efird stated that the department would provide the
proposal to outline which year the reductions could be
achieved. The reduction listed on the slide was proposed
for FY 20, including backstop language that would help
support the program if the required initiative approvals
were not granted.
Co-Chair von Imhof asked about the department's plan in the
event that the large reductions for FY 20 did not go
through. She wondered where else the administration would
cut to balance the budget.
Ms. Sanders stated that it was the administration's intent
that the $172 million would support the programs through
the time that the agency could get the waivers or come up
with a plan to implement future changes. She continued that
if the state did not receive approval for the maintenance
of effort change, she believed the agency would be back
before the committee to discuss a supplemental request.
10:12:44 AM
Senator Micciche asked if Medicaid professionals were
involved in preparation of the budget, or if the budget
proposal was similar to other OMB efforts in other
departments.
Ms. Efird stated the Medicaid directors were involved in
the conversation about how the agency would meet the
proposed reduction.
Senator Micciche stated that the committee had prioritized
the DHSS budget in recognition of protecting Alaska's most
needy senior citizens and the seriously disabled. He
thought the committee had identified ideas for significant
reductions that could occur between $300 and $400 million
with current statutes. He saw that there were suggestions
that required significant multi-year effort in order to be
delivered, and that no longer prioritized the individuals
he mentioned. He asked if the administration was open to
looking at real cuts without an unallocated reduction.
Ms. Efird stated that the department welcomed the
committee's involvement and engagement in supporting any
innovative ideas to make the Medicaid budget sustainable
and affordable to cover low income needy Alaskans.
Co-Chair Stedman asked Ms. Efird about an unallocated
reduction.
Ms. Efird stated that the department's intention was to put
forward a plan that would allocate proposed reductions and
have the information to support what the department
believed what was achievable for FY 20.
Co-Chair Stedman did not want to see unallocated
reductions. He stressed that the committee wanted to see
what was going to impact the people of Alaska; and wanted
to look at the short term, long term, and historic policy
changes to make the best-informed decision.
Senator Hoffman asked about the proposed reduction to adult
public assistance and thought the record detail showed that
the implementation would go back to the move to the 1983
standard for maintenance of effort calculation. He asked
Ms. Efird to provide the committee with information about
the March 1983 standard as compared to the current amount.
Ms. Efird agreed to provide the information.
10:16:41 AM
Senator Wielechowski referenced the proposed elimination of
Community Initiative Matching Grants. He thought the grants
had provided a huge amount of funding for abused women's
aid in crisis, victims of domestic violence, homeless at-
risk youth, Catholic Community Services, homeless pregnant
women, and women with children. He asked if there was an
impact analysis of how the grant cuts would impact the
homeless in the state.
Co-Chair Stedman asked if Ms. Efird could expand on the
proposed elimination of the program.
Ms. Efird stated that the Community Initiatives Grant
Program was for small human social services non-profit
agencies. The program was proposed to be eliminated and was
currently $861,000. The funds went to many small non-
profits in the state to cover services mentioned by Senator
Wielechowski.
Co-Chair Stedman asserted that the sub-committee would look
at the proposed reduction. He suggested that the department
get back to the committee with more information.
Senator Hoffman wanted the department to address the
elimination of the hold-harmless provision. He asked if
legislation had been filed to change statute.
Ms. Efird thought a bill had not been formally filed.
Co-Chair Stedman thought the bill was coming.
Ms. Efird affirmed that the bill was coming.
Senator Hoffman thought the accelerated process of the
proposed budget was not expeditious. He requested that the
department provide a list of who would be affected by the
elimination of the provision by district so members could
understand the effect on constituents.
Ms. Efird believed the data was available and agreed to
provide it to the committee.
10:20:32 AM
Senator Olson referenced closing the Nome Youth Facility.
He asked about the decision process and asked where the
youth would go.
Ms. Efird stated that the facility had been under-utilized
for a number of years. The department had considered other
options to serve the community and the youth. The youth
would be transported to another youth facility in Bethel or
Anchorage.
SB 20 was HEARD and HELD in committee for further
consideration.
Co-Chair Stedman discussed the agenda for the following
week. He discussed the subcommittee process. He stated that
there would be forthcoming presentations from the
Legislative Finance Division as well as from the OMB
economist.
ADJOURNMENT
10:23:49 AM
The meeting was adjourned at 10:23 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY2020 Gov Amend Budget to SFC 2.22.19 DHSS.pdf |
SFIN 2/22/2019 9:00:00 AM |
SB 20 |