Legislature(2023 - 2024)SENATE FINANCE 532
03/27/2023 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB79 | |
| Presentation: Governor's Amendments to Fy 24 and Fy 23 Supplmental | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 79 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 27, 2023
9:01 a.m.
9:01:07 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
Senator David Wilson
ALSO PRESENT
Neil Steininger, Director, Office of Management and Budget,
Office of the Governor; Deb Etheridge, Director, Division
Public Assistance, Department of Health.
PRESENT VIA TELECONFERENCE
Cori Mills, Deputy Attorney General, Department of Law.
SUMMARY
CSHB 79(FIN) APPROP: SUPPLEMENTAL
CSHB 79(FIN) was REPORTED out of committee
with a "do pass" recommendation.
PRESENTATION: GOVERNOR'S AMENDMENTS TO FY 24 and FY 23
SUPPLMENTAL
Co-Chair Stedman discussed the agenda and introduced the
presenter. He asked the presenter to briefly explain the
Supplemental Budget.
CS FOR HOUSE BILL NO. 79(FIN)
"An Act making supplemental appropriations and other
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."
9:02:35 AM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced himself and explained
that HB 79 was a fast-track supplemental budget. He
explained that the supplemental budget addressed needs
within the current fiscal year that had emerged since the
time the budget was initially appropriated. He stated that
the fast-track supplemental addressed urgent needs that
could not wait until the end of the normal legislative
budget cycle.
Mr. Steininger addressed a presentation entitled "Fast
Track Supplemental Budget HB 79 and SB 76" (copy on file).
Mr. Steininger turned to slide 2 and spoke to a table that
gave an overview of the FY 23 fast track supplemental
budget. There was a summary of the appropriations that were
included in the bill, which totaled approximately
$5 million in undesignated general funds (UGF):
FY2023 Fast Track Supplemental Budget
Operating
Office of Public Advocacy - $3,110.2 UGF
Public Defender Agency - $1,583.8 UGF
Public Assistance Field Services - $3,088.7 UGF
$3,733.0 Federal Funds
Medicaid Services - -$3,088.7 UGF
HB79/SB76 Total - $4,694.0 UGF $3,733.0 Federal Funds
$8,427.0
9:04:47 AM
Co-Chair Stedman noted that the slide showed a negative
$3,088.7 for Medicaid Services. He understood that there
had been an acceleration in Medicaid claims coming into the
state in the past month. He asked about the projected
estimates for Medicaid and what the state planned to do if
funds came up short.
Mr. Steininger relayed that the most recent projections
showed approximately $10 to $11 million in excess UGF
funding within the program. He said that the $300 million
represented about a day's worth of funding in the program.
He said that the administration was confident that the
funds would be available for the transfer.
9:06:39 AM
Co-Chair Stedman asked Mr. Steininger to get back to the
committee towards the end of the budget cycle in the case
that there was a shortfall in the funding.
Mr. Steininger agreed.
9:07:11 AM
Senator Bishop requested that OMB provide details on what
was driving the accelerated Medicaid rates of use.
Mr. Steininger agreed to provide an updated projection of
the Medicaid program at a later point in the session.
9:07:49 AM
Mr. Steininger referenced slide 3, "Dept. of Administration
- Legal and Advocacy Services,":
FY2023 Fast Track Supplemental Budget
Office of Public Advocacy
HB 325 Supplemental - $2,285.2 UGF
Contractor Rate and Cap Increase - $825.0 UGF
Office of Public Advocacy Subtotal - $3,110.2 UGF
Public Defender Agency
HB 325 Supplemental - $833.8 UGF
One-time Backlog Contractor Support - $750.0 UGF
Public Defender Agency Subtotal - $1,583.8 UGF
Legal and Advocacy Services Total - $4,694.0 UGF
Mr. Steininger relayed that there was a backlog in trials
related to the Covid-19 pandemic. He related that resources
were necessary to respond to the backlog.
9:09:35 AM
Mr. Steininger reviewed slide 4, "Department of Health -
Public Assistance Backlog.":
FY2023 Fast Track Supplemental Budget
Public Assistance Field Services
Medicaid Eligibility Redeterminations and Public
Assistance Program - $3,088.7 UGF $3,733.0 Federal
Funds - $6,821.7 Total
Medicaid Services
Transfer to Public Assistance Field Services - -
$3,088.7
Department of Health Total - $0.0 UGF $3,733.0 Federal
Funds $3,733.0 Total
9:11:17 AM
Co-Chair Olson asked when the SNAP program backlog would be
resolved and when people could expect to receive SNAP
benefits so they can buy food.
Mr. Steininger deferred to Director Etheridge.
9:11:56 AM
DEB ETHERIDGE, DIRECTOR, DIVISION PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH, relayed that there was a dedicated
team of individuals working on the staff recertification
backlog. She expected the work would be done within the
next two months. She lamented that a cascade of backlog in
all programs was posing a challenge to the division.
Co-Chair Olson surmised that people could expect their
benefits to resume in June 2023.
Ms. Etheridge replied that several measures had been taken
to stop the growth of the backlog, which was comprised of
some 2,000 cases. She relayed that it would take two months
to be fully out of the backlog.
Co-Chair Stedman asked for Mr. Steininger to discuss
Section 5 of the bill, which contained the Constitutional
Budget Reserve (CBR).
Mr. Steininger explained that the other body had added a
section to the bill that had not been in the original
submitted by the governor. He explained that the language
was necessary to ensure that the original supplemental
appropriations were funded.
9:14:35 AM
Co-Chair Stedman asked about line 30, which stipulated the
appropriation was not to exceed $115,000,000.
Mr. Steininger explained that the bill included roughly $5
million in General Fund supplemental appropriations and
when the other supplemental appropriations in the
traditional supplemental bill were added the total was $115
million. He said that the language ensured that all
supplementals were funded. He said that the administration
was comfortable using the CBR to fully fund appropriations
in FY23.
9:15:45 AM
Co-Chair Stedman OPENED public testimony.
9:16:05 AM
Co-Chair Stedman CLOSED public testimony.
9:16:12 AM
Senator Kiehl appreciated the work that had been done on
the bill. He thought the request to catch up on public
assistance backlogs should be the priority.
9:16:44 AM
Senator Kiehl MOVED to report CSHB 79(FIN) out of Committee
with individual recommendations. There being NO OBJECTION,
it was so ordered.
CSHB 79(FIN) was REPORTED out of committee with a "do pass"
recommendation.
9:17:24 AM
AT EASE
9:17:48 AM
RECONVENED
^PRESENTATION: GOVERNOR'S AMENDMENTS TO FY 24 and FY 23
SUPPLMENTAL
9:18:07 AM
Mr. Steininger discussed a presentation entitled "March 7th
and 22nd Budget Amendments SB40, SB41, SB42 and SB54" (copy
on file).
Mr. Steininger showed slide 2, which covered the amendments
thnd
submitted by the governor on March 7 and March 22. The
amendments were related to the governor's education
package:
th
March 7 Amendments
FY2024 Operating budget (SB40)
Education and Early Development
Alaska Native Science and Enineering Program
Partnership
$4,000.0 UGF Permanent Full-Time Positions 0
Alaska Resource Education Center
$1,000.0 UGF Permanent Full-Time Positions 0
Career and Technical Education Incentive Grants
$3,000.0 UGF Permanent Full-Time Positions 0
Teacher Recruitment, Retention and Certification
Support
$3,000.0 UGF Permanent Full-Time Positions 0
Alyeska Reading Academy and Institute
$5,000.0 Permanent Full-Time Positions 12
Total - $16,000.0 Permanent Full-Time Positions 12
Mr. Steininger related that the supplemental requests were
for DEED and were also related to a recently introduced
piece of legislation related to teacher retention.
9:20:08 AM
Co-Chair Stedman asked about budget and amendment
timelines. He wondered whether the legislature should
expect additional amendments.
Mr. Steininger described the budget and amendment
timelines. He admitted that the March amendments were
issued after the normal deadline. He offered an explanation
and understood that consideration was being requested after
the deadline.
Co-Chair Stedman added that it was common for the
administration to submit amendments after the deadline and
were always considered by the legislature. He asked whether
the amendments would be necessary if the legislation
containing the appropriations did not make it to the
governors desk.
Mr. Steininger said that altogether the education
amendments were a package - but each could stand on its
own.
9:23:23 AM
Senator Merrick asked about the reading academy location.
Mr. Steininger deferred to Heidi Teshner.
9:23:50 AM
Heidi Teshner, Acting Commissioner, Department of Education
and Early Development replied that it would have its
beginnings in Anchorage, with an expectation that it would
eventually reach rural areas.
9:24:16 AM
Senator Kiehl asked about the cost per student at the old
Alyeska Central School.
Ms. Teshner said that the old school was a statewide
correspondence school, and the new school would be a brick-
and-mortar school. She stated that the $5,000.0 would be
used to hire staff and provide direct instruction to
students, as well as year-round training for instructors.
Senator Kiehl asked for startup cost versus base cost.
Ms. Teshner agreed to provide the information.
9:25:09 AM
Co-Chair Hoffman asked whether the establishment of the
academy required legislation.
Ms. Teshner replied in the negative.
Co-Chair Hoffman asked whether the effort to run the
academy would be ongoing by the state.
Ms. Teshner replied in the affirmative.
9:25:56 AM
Mr. Steininger referenced slide 3:
nd
March 22
FY2024 Operating Budget Amendments
Department of Revenue
Alaska Permanent Fund Corporation
Salary and Benefits for Investment Management Support
$547.0 Other Funds
Department of Transportation and Public Facilities
International Airports
Additional Mission Critical Incentive Pay $691.5 Other
Funds
Operating Total $1,238.5 Other Funds
FY 2024 Capital Budget Amendments
Department of Commerce, Community, and Economic
Development
Marine Exchange of Alaska Alaska Vessel Tracking
System Upgrade $1,200.0 Other Funds
Capital Total $1,200.0 Other Funds
9:28:19 AM
Co-Chair Stedman asked if there were any other uses for the
$1.2 million or if it had to go to the MEA.
Mr. Steininger informed that the funds had a federal
restriction and had to be used to benefit the vessels that
carried the people that generated the head tax. He said
that the funds could be used for something else if it
directly benefitted cruse ships that entered the state.
9:28:53 AM
Co-Chair Hoffman asked whether it was anticipated that the
funds would be ongoing or a one-time increment.
Mr. Steininger relayed that the two items would be ongoing.
The MEA item was in the capital budget and would be
reconsidered every year as part of the budget process.
9:29:46 AM
Senator Bishop asked about the $691,000 for Critical
Mission Pay. He thought that Fairbanks had been receiving
less pay than Anchorage and wondered whether Fairbanks
employees would be paid retroactively to catch up with the
Anchorage rate.
Mr. Steininger noted that the item was for FY 24 and
recalled that there was funding in the Supplemental Budget
to catch Fairbanks up with Anchorage.
9:30:36 AM
Co-Chair Olson shared that he had received a phone call
over the weekend from the assistant chief pilot at Northern
Air Cargo. He said that there was a lack of operators in
rural Alaska. He wondered if there was anything to help
with the lack of support in the area. He recalled that the
airport in Kotzebue had shut down for two days due to
illness. He asked about potential funds for Kotzebue and
Nome to keep their airports functional.
Mr. Steininger responded that the areas were "not in this
package." He noted that the Department of Transportation
and Public Facilities had brought the matter to the
attention of OMB only recently and the matter was under
consideration.
Co-Chair Olson asked when he could inform people in his
district that resources would be available to address the
issue.
Mr. Steininger relayed that he would need to speak to the
commissioner of DOT&PF.
9:32:44 AM
Co-Chair Hoffman requested that Mr. Steininger convey to
the commissioner that there were needs in the whole state
of Alaska and not only Anchorage.
Co-Chair Stedman asked Mr. Steininger to get back to the
committee with additional information on how the department
planned to provide equal support to all areas of the state.
9:33:28 AM
Mr. Steininger advanced to slide 4, which addressed
amendments to the FY23 Supplemental Budget. He pointed to
the first line which listed $3,717.3 in UGF spending for
Judgements, Settlements, and Claims against the state. He
said that the Supplemental Capital Budget showed a balance
from a prior year in the Division of Elections, which would
be reappropriated. He shared that the Department of
Transportation and Public Facilities (DOT&PF) had a balance
of $9,070.7, which would be reappropriated for emergency,
catastrophic events, and unforeseen critical maintenance
needs.
Co-Chair Stedman was sure the capital budget chairman was
happy to look at the proposed reappropriations for
consideration in the FY24 Capital Budget. He requested more
information regarding the judgements, settlements, and
claims.
Mr. Steininger noted that the Department of Law was online
for questions.
Co-Chair Stedman asked Mr. Steininger to discuss the cases
to the best of his ability.
Mr. Steininger listed:
Wilkerson v. State of Alaska, Department of Law
$1,484,329.17
Juneau v. Department of Transportation and Public
Facilities (Procurement Act Contract Claim)
$586,316.41 and $213,683.59(2 payees)
Estate of Aaron Thomas Smith v. State of Alaska, DPS
$300,000.00
Amaroq Resources, LLC v AOGCC $15,309.50
Thompson et. al v. Hebdon et al $582,789.20 and
$417,928.75 (2 payees)
9:37:14 AM
Co-Chair Stedman commented that in the operating budget
each year there was a section for Judgements and
Settlements, and Claims in which the state paid for being
on the losing end of court cases brought against the state.
9:37:42 AM
Senator Kiehl asked whether the case involved the City of
Juneau or an office in Juneau.
Co-Chair Stedman asked for further detail concerning the
$800,000 case.
9:38:05 AM
CORI MILLS, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW (via
teleconference), relayed that the case pertained to a
contractor that had entered into a lease agreement with the
state.
Co-Chair Stedman asked for a brief synopsis of the $1.5
million settlement.
Ms. Mills relayed that there was an employment case. The
employee had worked for the Department of Law (LAW) and her
employment had been terminated. The employee, Ms.
Wilkerson, sued for wrongful termination. Ms. Wilkerson had
been successful in the case and the jury had awarded the
attorney fees and costs of $1.5 million.
9:39:23 AM
Senator Merrick observed that some interest rates were at
7.5 percent and some at 3.25 percent. She wondered what
determined the interest rates.
Mr. Steininger believed the interest rates were determined
by the terms of the settlements but deferred to Ms. Mills.
9:39:50 AM
Ms. Mills explained that the different interest rates were
set by the court and were dependent on the action of the
court.
9:40:09 AM
Co-Chair Hoffman queried how much was spent on the cases
under discussion.
Co-Chair Stedman asked Ms. Mills to provide a breakdown of
the costs of the cases, including a brief synopsis of each
case.
Ms. Mills agreed to provide the information and assumed
that the committee wanted the internal costs of each case.
Co-Chair Stedman replied in the affirmative.
9:41:10 AM
Mr. Steininger thanked the committee for hearing the
amendments after the statutory deadline. He noted that
bargaining unit contracts were still pending, and once
concluded, monetary terms of agreement (MOA) would be
submitted to the legislature.
Co-Chair Stedman asked Mr. Steininger to keep committee
staff posted on the range of potential judgments and
settlements.
Co-Chair Stedman thanked OMB and other department
representatives for their time.
Co-Chair Stedman discussed housekeeping.
ADJOURNMENT
9:43:18 AM
The meeting was adjourned at 9:43 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 23.03.27 OMB March 7th and 22nd Amendments Overview SFIN.pdf |
SFIN 3/27/2023 9:00:00 AM |
SB 40, SB 41, SB 42, SB 54 |
| HB 79 23.03.27 OMB Fast Track Supplemental Budget Overview SFIN.pdf |
SFIN 3/27/2023 9:00:00 AM |
HB 79 |