HOUSE FINANCE COMMITTEE January 28, 1993 1:30 P.M. TAPE HFC 93-12, Side 2, #000 - end. TAPE HFC 93-13, Side 1, #000 - end. TAPE HFC 93-13, Side 2, #000 - #165. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:30 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Martin Representative Therriault Representative Navarre Representative Parnell Representative Hoffman was not present for the meeting. ALSO PRESENT Frank Turpin, Commissioner, Department of Transportation and Public Facilities; Ron Lind, Director, Plans, Programs and Budget, Department of Transportation and Public Facilities; Keith Gerken, Deputy Commissioner, Department of Transportation and Public Facilities; Keith Gerken, Deputy Commissioner, Department of Transportation and Public Facilities; Randy Simmons, Deputy Commissioner, Department of Transportation and Public Facilities; Charles Mahlen, Commissioner, Department of Labor; David Teal, Director, Division of Administrative Services, Department of Labor; Donald Study, Director, Division of Labor Standards & Safety, Department of Labor; Arbe Williams, Special Assistant to the Commissioner, Department of Labor. SUMMARY INFORMATION HB 55 FY 94 OPERATING BUDGET & LOAN PROGRAMS HB 56 APPROP: FORMULA/MANDATED PROGRAMS; LEASES OVERVIEWS: Transportation & Public Facilities Labor HB 55 FY 94 OPERATING BUDGET & LOAN PROGRAMS DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES 1 FRANK TURPIN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES (DOTPF), provided the Committee with a handout summarizing the Department's FY 94 budget. [Attachment #1 - on file]. Co-Chair Larson noted that DOTPF asked for $130.7 million dollars for the FY 93 authorized budget. The FY 94 request reflects a reduction of $2.65 million dollars less. Commissioner Turpin pointed out that the total drop in the projected budget incorporates a change with the Alaska Marine Highway System. Commissioner Turpin provided statistics from the past ten years illustrating financing for DOTPF. Funding sources which support DOTPF are: General fund dollars, AMHS revenues, international airports, highway working capital dollars and mixed funding. The majority of money spent by the Department (56%) goes to capital improvements. He added that most of the general fund monies go to maintenance and operations of highways, airports and buildings. Any cuts from DOTPF must be taken from either the Alaska Marine Highways (AMHS) or maintenance, even though both these Divisions are operating on a thin budget. Commissioner Turpin noted there was a large maintenance funding drop in 1987 from which the Department is currently trying to recover. He emphasized that the AMHS has seen a $1 million dollar decrease of funds since 1987. A $37 million dollar increase is necessary to reach the 1983 level. Representative Martin asked how many employees worked in the Department's administration. Commissioner Turpin explained there are thirty-one hundred people who work for DOTPF. Representative Martin asked for an employee division breakdown. Representative Grussendorf questioned the effects of the reduction to AMHS with a main line ferry currently in repair. Commissioner Turpin replied that service would be virtually unaffected although fares would be increased. Co-Chair Larson inquired if the Retirement Incentive Program (RIP) saved DOTPF money. Commissioner Turpin responded that the RIP Program forced DOTPF to loose a lot of valuable experience and there have been many hidden costs. He stated that the number of people do not tell the full story. Representative Navarre suggested more funds be shifted to 2 the maintenance and operations component of the proposed budget. Commissioner Turpin replied that the cut to that component was distributed statewide. Representative Navarre asked what comprised the reduction to maintenance and operations. Commissioner Turpin stated a secretarial and procurement clerk position would be eliminated in Anchorage. Representative Navarre requested an additional grater operator for the Kenai area and asked if there were any proposed reductions to the rural airports. Commissioner Turpin replied that the rural airport component and increased landing fees were left untouched this year. Representative Grussendorf noted that there is $61 million dollars of Intermodal Surface Transportation Enhancement Act (ISTEA) funds. He asked if those funds would be distributed to the organized boroughs through DOTPF. Commissioner Turpin clarified that there will be no change in the legislative approval of the DOTPF capital budget. Local projects and roads will be paid with federal funds and planned by local committees with assistance from the Department. Representative Therriault asked if the supplemental would include the Dalton Highway. Commissioner Turpin replied that the Dalton Highway problem has presented continuous difficulties including contraction of services due to record snowfalls. There is currently a request of $1.2 million dollars supplemental funds. In order to guarantee that further supplementals will not be necessary, DOTPF submitted a request for $1.8 million additional dollars for maintenance money for the Dalton Highway in the FY 94 budget package. Representative Therriault asked if those figures were reflected in the proposed budget. Commissioner Turpin stated they were not. Representative Navarre questioned the need of the additional allocation requested for the Dalton Highway for next year. Commissioner Turpin pointed out there will be a newly added one hundred-fifteen mile extension of highway which will require additional upkeep and maintenance. Representative Therriault questioned mail box damage in his district by snow removal equipment. Commissioner Turpin explained that maintenance control is a regional problem and is dealt with on a regional level by the Department. Co-Chair Larson noted that the Department of Transportation and Public Facilities Subcommittee would be Chaired by Representative Foster with members Representative Sanders, Representative Williams, Representative Phillips, Representative Mulder, Representative Menard, Representative 3 Mackie and Representative Navarre. (Tape Change, HFC 93 - 13, Side 1). DEPARTMENT OF LABOR CHARLES MAHLEN, COMMISSIONER, DEPARTMENT OF LABOR, provided the Committee with a handout summarizing the Department's FY 94 budget request. [Attachment #2 - on file]. He noted that the Department of Labor was submitting a proposed budget reduced by $600 thousand dollars. Co-Chair MacLean commented that over the past two years, general funds for the Department of Labor have been reduced by 15.6%. Representative Grussendorf asked if that included transfer of responsibilities to other departments. Commissioner Mahlen reviewed Attachment #1 and noted that the Department of Labor's operating budget is .5% of the State's entire operating budget. He added that the Department of Labor's mission established in Title 23 is to foster and promote the welfare of the wage earners in the State, improve their working conditions and advance their opportunities for profitable employment. The Department is composed of the Commissioner's Office and four divisions: * Administrative Services Division - 14% percent of FY 94 general fund operating budget request of division. * Worker's Compensation Division - 11% percent of FY 94 general fund operating budget request of the division. * Labor Standards & Safety Division - 11% of the FY 94 general fund operating budget request of the division. * Employment Security Division - 63% percent of the FY 94 general fund operating budget request of the division. The Employment Security Division budget is comprised of four components: * Employment/Unemployment Services * Alaska Work Programs (JOBS) * Governor's Committee on Employment of People with 4 Disabilities * State Training & Employment Program These funds originate from general funds ($243.3), federal funds ($29,405.9), other funds ($6,562.1) and the remainder of the Department. The Administrative Services Division is comprised of three sections: * Management Services * Labor Market Information * Data Processing The Office of the Commissioner is comprised of two sections: * Office of the Commissioner - The Commissioner's Office is the policy arm of the department and focuses operations on the purpose of the department which is to foster and promote the health, safety, and economic well being of Alaska's workers. * Alaska Labor Relations Agency - The Agency's principal role is to referee disputes between organized labor and public employers. The agency's methods can be informal, through conciliation, or formal, through quasijudicial administrative hearings. The Worker's Compensation Division is comprised of two sections: * Workers' Compensation * Fishermen's Fund program provides assistance with the costs for treatment and care of Alaska licensed commercial fishermen who are injured or become ill due to commercial fishing activities in Alaska. The Labor Standards and Safety Division is comprised of four sections: * Wage & Hour * Mechanical Inspection * Occupational Safety & Health 5 * Alaska Safety Advisory Council Co-Chair Larson asked if there were State requirements which exceed the federal requirements for Occupational Safety and Health Programs. Commissioner Mahlen stated no. All requirements have been made to the specifications of the federal requirements. Representative Grussendorf commented on the position of electrical examiners who are caught between the Department of Commerce and Economic Development (DCED) and the Department of Labor. Their position is tenuous as their grace period is about to expire. ARBE WILLIAMS, SPECIAL ASSISTANT TO THE COMMISSIONER, DEPARTMENT OF LABOR, advised that there is legislation drafted to establish a certificate for the electrical and mechanical administrators. The legislation proposes to establish a certificate under the Department's certificate of fitness program. She added, that there is a question wheather the public wants the protection granted with the certificate. Commissioner Mahlen added that the board is questioning if there should be a sunset clause added. Representative Brown questioned the effect on workers safety given the reductions to the Division of Occupational Safety and the Division of Wage and Hour. Commissioner Mahlen replied that the reductions would affect the Department's program but pointed out that those divisions were the only place where general funds could be reduced. (Tape Change HFC 93 - 13, Side 2). Representative Grussendorf asked if the bottom line for the Department is public safety. Commissioner Mahlen agreed that public safety is important to the Department, but a reduction was necessary. Representative Grussendorf reiterated his concern with decreasing public safety. DONALD G. STUDY, CSP, DIRECTOR, LABOR STANDARDS & SAFETY DIVISION, DEPARTMENT OF LABOR, pointed out that within the Occupational Safety & Health Unit, the Department is bound in a federal/state agreement for the funds and matching funds. If any matching fund positions are cut, the State would lose federal funds. Representative Grussendorf asked if the captured funds would contribute to public safety. Mr. Study stated that the funds are public safety related. Co-Chair Larson inquired about the report prepared by the Department regarding resident hire. DAVID TEAL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, 6 DEPARTMENT OF LABOR, noted that last year there was an appropriation of $50 thousand dollars to finance the preparation of a resident hire report. The FY 94 budget transfers that source of funding to the STEP program. Co- Chair Larson asked if the report would be completed this year. Mr. Teal stated that the report is due thirty days after the Legislature convenes and he would examine the status of the report. Co-Chair Larson requested more information on EO 85 which transferred the fish processor bonding program from the Department of Labor to the Department of Revenue. Commissioner Mahlen stated that the bonding issue had no significant ties with DOL, and because it was revenue collection, it should be transferred to the Department of Revenue. Co-Chair Larson noted that the Department of Labor subcommittee would be Chaired by Representative MacLean and members Representative Hudson, Representative Vezey, Representative Sitton and Representative Finkelstein. ADJOURNMENT The meeting adjourned at 3:05 P.M. 7