MINUTES SENATE FINANCE COMMITTEE April 14, 1999 9:13 AM TAPES SFC-99 # 90, Side A and Side B CALL TO ORDER Co-Chair Sean Parnell convened the meeting at approximately 9:13 AM. PRESENT Senator John Torgerson, Senator Sean Parnell, Senator Randy Phillips, Senator Dave Donley, Senator Loren Leman, Senator Gary Wilken, Senator Al Adams, Senator Pete Kelly and Senator Lyda Green. Also Attending: MICHAEL NIZICH, Administrative Director, Division of Administrative Services, Office of the Governor; DAN SPENCER, Chief Budget Analyst, Office of Management and Budget, Office of the Governor; SHARON BARTON, Director, Division of Administrative Services, Department of Administration; JUANITA HENSLEY, Administrator, Division of Motor Vehicles, Department of Administration; DWAYNE PEEPLES, Director, Division of Administrative Services, Department of Corrections; KAREN REHFELD, Director, Education Support Services, Department of Education; BARBARA FRANK, Director, Division of Administrative Services, Department of Environmental Conservation; KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game; JANET CLARKE, Director, Division of Administrative Services, Department of Health and Social Services; REMOND HENDERSON, Director, Division of Administrative Services, Department of Labor; KATHRYN DAUGHHETEE, Director, Administrative Services Division, Department of Law; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Military and Veteran's Affairs and Department of Natural Resources; KEN BISCHOFF, Director, Division of Administrative Services, Department of Public Safety; JEFF JESSEE, Executive Director, Alaska Mental Health Trust Authority, Department of Revenue; NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Utilities; CHRIS CHRISTENSEN, Staff Council, Alaska Court System; GINGER BLAISDELL, Fiscal Analyst, Division of Legislative Finance. SUMMARY INFORMATION SB 30-OPERATING BUDGET APPROPRIATIONS SB 31-MENTAL HEALTH APPROPRIATIONS HB 50-OPERATING BUDGET APPROPRIATIONS HB 51-MENTAL HEALTH APPROPRIATIONS The full committee heard subcommittee closeout reports. SENATE BILL NO. 30 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; 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." SENATE BILL NO. 31 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." CS FOR HOUSE BILL NO. 50(FIN)(brf sup maj fld) "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; and providing for an effective date." CS FOR HOUSE BILL NO. 51(FIN) "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." Operating Budget Subcommittee Closeouts Co-Chair Sean Parnell gave an overview of what the committee planned to do this meeting. The recommendations would not be adopted at this time. The committee would not enter a detailed discussion with any of the departments. Senator John Torgerson gave the subcommittee closeout for the DEPARTMENT OF FISH AND GAME. The members of the subcommittee included Senator Dave Donley, Senator Rick Halford, Senator Jerry Mackie, Senator Lyman Hoffman and himself as chair. They were directed to make a reduction of $1,315,400 from the FY99 budget. The subcommittee began by extending the austerity measures that the Governor had put on the table to help alleviate the budget problems for FY99. That was a total of $623,000. The majority of that was taken from the fisheries management headquarters office, at the recommendation of the department. Part of the balance was taken from the Glacier Bay Defense project. The department did not need that money because of the recent lawsuit filed on the matter. Beyond that, the subcommittee needed to reduce $767,000. The recommendation to the full committee was that the reductions be applied to the fisheries management headquarters office. An additional $383,000 in federal receipt authority was given with the understanding that the federal government was more than likely to contract with the State Of Alaska to continue doing work in high-impact federal areas for subsistence. If the state passed a subsistence constitutional amendment the state would get an additional $11 million. If not, the federal government would get that money. If the federal government took over fisheries management, there would no need for the state to spend that money. The other $383,000 the subcommittee recommended through other legislation that the fees be increased for the commercial fisheries crew licenses. The current resident cost was $30, and the recommended increase would be to $60. The nonresident fees would increase from $90 to $125. This increase would go into the fish and game fund. The subcommittee then recommended giving the department additional program receipt authority to collect that money. He said this was one of the hardest budgets he had since the commercial fishing industry brought revenue into the state. The subcommittee felt these changes were the least impact on the department. It was reasonably certain that the department could collect those increased licensing funds so the impact would be negligible. Senator Al Adams noted for the record that his silence on the reports was not a reflection of his agreement of the recommendations. He needed a chance to review the information and would return to the committee with amendments. He appreciated the cooperation given by the subcommittee chairs. Co-Chair John Torgerson noted that the overall budget of Department of Fish and Game actually did increase through the use of federal funds. There was room for funds to be shifted to make up for some of the shortfalls. He then presented the subcommittee report for the DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES. The subcommittee consisted of himself as chair, Senator Jerry Mackie and Senator Lyman Hoffman. The mandate was a reduction of $2,290,000 from the Governor's request. In many cases, the subcommittee took the austerity measures proposed in the Governor's budget and extended those further. He broke the recommendations down by region. The subcommittee recommended a reduction of $47.4 thousand to the commissioner's office budget. This was an austerity measure In the Central region, the snow hauling and street sweeping budget was reduced by $150,000; approximately 20 percent. The subcommittee recommended a fund shift transfer from general funds to 470 funds for the environmental monitoring of waste oils in the streets of Anchorage. The federal Environmental Protection Agency mandated this. The fund transfer would require an amendment to another bill currently in committee, but he knew of no opposition to the change. Funding for the program that produced line striping on the road was transferred to use federal funds after discussion with the department. Because it was a safety item, it would qualify for the federal funding. The subcommittee recommended the region surplus a back-up grader and a dump truck to realize a saving of $50,000. The department would be directed to examine maintenance stations and close one station to find $125,000 in savings. A small reduction of $11,000 was made to the funding for calcium chloride. They were given program receipt authority of $500,000 to reopen the Adak Airport, should the federal government decide to grant funds for that purpose. The subcommittee also gave statutory receipt authority for late-night arriving airplanes when department employees were called out. In the Northern region, the subcommittee added $15,000 in an attempt to close the Harborview facility. They suggested that a one-time capital budget appropriation of $150,000 be made to build a wall between the state-run portion and the Valdez Hospital. If that appropriation were not made, $235,000 would be required simply to maintain the facility. The subcommittee took the austerity recommendation from the Governor's budget to not open certain roads in the region until after the snow naturally melted. Co-Chair John Torgerson noted the matter had been debated during discussions regarding the FY99 supplemental budget. This would result in a total saving of $316,000 for FY00. The subcommittee did give designated receipt authority of $150,000 for private parties who wished to have specific roads opened earlier. He understood that the Canadian government or the tourism industry might want to pay the cost. The subcommittee suggested closure of parts of the Denali Highway for a maintenance period for a realized saving of $100,000. The road would receive the current amount of maintenance to the last residence along the road but the forty-miles of road that crossed the pass would be shut down permanently. A $60,000 transfer of funds would be made to cover paint projects. There would be a closure of one maintenance station for saving of $125,000. The subcommittee recommended reductions to the Southeast Region to include reduction in janitorial service from the current five days a week to three days a week. This would result in $125,000 of savings. This is something that the Northern and Central regions had been doing. Regarding the Marine Highway component, the subcommittee took the recommendations of the Governor to cut $180,000. This would remove the M/V Kennicott from two weeks of scheduled service and transferring it to the Bellingham route. This would leave the M/V Columbia in dry dock for the two additional weeks. The service of the M/V Taku would be reduced by one week and would save $146,000. Funding for linens, aprons and blankets would be also reduced by $44,000. Finally, a $10,000 reduction was made to maintenance and repair items. Senator Al Adams appreciated the report. He requested that the subcommittee chairs make note of any accompanying legislation and/or capital budget items that would go along with the changes proposed to the operating budget. BREAK 9:27 AM / 9:28 AM Senator Dave Donley gave the subcommittee report for the DEPARTMENT OF LAW. Members of the subcommittee included The subcommittee had been requested to make an $800,000 reduction based on the FY99 budget. The subcommittee looked at changes made in the House of Representatives for suggestions. The priorities the subcommittee wished to address were those that protected children and also the historical decline in the effectiveness of the Prosecutor's office vis-a-vis the budget increases to the public defenders agency. Therefore, the subcommittee added one prosecutor and one paraprofessional position for the Smart Start program. In the Civil Division, the subcommittee made a general reduction of $125,000 with the intent that it applies across the board. General funds were reduced in the Environmental Law Section by $100,000 Most increments in the Governor's request were denied. However, the Fair Business Practices Section was increased with the addition of one attorney position. The Governmental Affairs Section was reduced by $95,700. The Human Services Section was granted the requested $291,000 for two additional attorneys. Also added, were the funds necessary to annualize the positions that were adopted the previous year. The subcommittee recommended a reduction from the Governor's general fund request for the Mental Health Lands Section by $47,000. The subcommittee paralleled a House of Representatives' proposal to reduce the Governor's proposed general fund allocation for the Statehood Defense by $25,000. Most of the cuts occurred in the Oil and Gas Litigation Section. The subcommittee utilized the same transfer formula proposed by the House to transfer $983,000 from the general fund to permanent fund corporate receipts. In the Oil and Gas Services Section, the subcommittee reduced the Governor's request by $80,000, which would delete one vacant position and one telephone line. The subcommittee re-prioritized the department's budget to reemphasize criminal prosecution, protection of children and consumer protection. Co-Chair Sean Parnell noted the Department of Public Safety budget was separate from the original packet. Senator Dave Donley gave the subcommittee report for DEPARTMENT OF PUBLIC SAFETY. The target was a cut of only $4,800 from FY99. While that may seem easy to do, he noted that the Governor had requested a $2 million increase and the Legislature had consistently increased the budget over the last five years. The intent in past years had been to place new troopers in the field. The department was somewhat successful in doing this, but there had been unanticipated costs that affected the number of positions actually realized. He pointed out that the costs were nobody's fault and could not have been budgeted. He compared the Governor's request for a $2 million increase and the House's grant of a $1 million increase. The subcommittee was directed to find a reduction. He detailed those proposed reductions. The subcommittee denied most all the increments requested except in the area of fire service training, which used statutory designated receipts of $37,800. There was a small increment of $15,000 to create a new Fish and Game safeguard component that was granted. Senator Dave Donley told the committee that was a very successful program that had been dropped out in the past. It was anticipated to save money in the long run. Senator Dave Donley stated that the Trooper Detachments component could be the most problematic area because it was so dependent upon other support services throughout the budget. The subcommittee denied the increment because it was based on the number of troopers funded the prior year rather than the number actually placed. The subcommittee recommended a change in funding sources for the Violent Crimes Compensation Board and for the Council on Domestic Violence. The board would be funded at a higher level and entirely from the prisoner's seized permanent fund dividend receipts. It was determined that was the best use for those funds. The council would get a substantial increase because the department attained additional federal funds. Some of those federal funds would be used for an added position in the crime lab for DNA testing. There was a federal grant accepted for the Batterers Intervention Program. He mentioned that a controversy between the program and the council had been resolved. Using monies saved through the use of prisoner's PFDs for the council's budget, the subcommittee added a $100,000 increment to fund Victim's for Justice. The program would continue at a baseline to increase troopers in the field although not as much as proposed by the House. Some of the problems with the crime lab were also addressed as well as victim's programs. Senator Loren Leman gave the subcommittee report for the DEPARTMENT OF REVENUE. He commended the department's cooperation. He pointed out that the spreadsheet before members did not reflect the reduction goal because there were other technical changes needing to be made. To reach the allocation of $11.35 million, the subcommittee made some fund shifts in CSED consistent with changes done in the FY99 supplemental budget. The salary for the 12- month position for the Welfare to Work program was reduced with the approval of the Mental Health Trust Authority. The subcommittee recommended that Oil and Gas Audit merge with Income and Excise Audit. The department requested the merger be delayed to April 2000 rather than July 1999. The savings would be $400,000 for Oil and Gas Audit and $100,000 for Income and Excise Audit. The subcommittee was working on amendments to get $300,000 restored in the Oil and Gas Audit. One area of remaining contention was the Permanent Fund Corporation. The subcommittee recommended denying the increment request of $225,000 for a new staff person and recommended a decrease of $175,000 for office efficiencies. The department had come up with list of 29 things they could do to be more efficient. The subcommittee members were Senator Jerry Ward, Senator Al Adams and Senator Loren Leman. He then gave the subcommittee report for the DEPARTMENT OF ENVIRONMENTAL CONSERVATION. The subcommittee was allocated $12.2 million general funds and proposed a budget using slightly over $11.3 million. He felt the proposal would allow both the department and the Legislature to accomplish their mission. The department had requested over $2.4 million of increments for 15 new positions. The subcommittee's recommendation denied all new net positions and suggested reallocation of existing staff positions. The department could then prioritize and address programs. In the Division of Environmental Health, the Food Safety and Sanitation was denied its request of $330,000 by the subcommittee. However, $1.47 million statutory program receipts were approved. The result would mean an increase in fees to those businesses that got inspected. The subcommittee would introduce legislation to allow for a local option for larger municipalities to take over the inspections and receive the fees. He noted that Anchorage already did this. The subcommittee and the department were working on a transition. The request for one position to distribute drinking water information for utilities across the state was denied. The subcommittee accepted federal fund receipts but denied matching funds and directed the department to find funds within for the Salmon Habitat Protection increment. Four additional staff positions were also denied. The request for one new staff position for the National Pollutant Discharge Elimination System was denied and the subcommittee told them to use existing personnel. The subcommittee recommended approval of an increment for facility construction and operations for replacement of federal funds and increased loans audit servicing. This would be a contracted service. Because of the substantial success of Alaska's senior senator in Washington, DC to obtain federal funds for the Village Safe Water Program, the department was expecting an increase in funds. They requested four new engineer positions to manage the additional monies, which the subcommittee denied but did approve contractual services. Senator Loren Leman spoke of his experiences with the program, noting its success. The subcommittee recommended a reduction of $873,000 to the Spill Prevention Response Program by combining the Storage Tank Assistance Program and the Contaminated Sites Program and reducing 15 employees. He said the programs would be in a phase-down mode anyway and the merger was appropriate, but the department felt this was too early. Co-Chair Sean Parnell noted Senator Gary Wilken was the chair of the Department of Education subcommittee, but that the foundation formula was to be considered by the full committee. The Longevity Bonus Program was also held out for consideration. Senator Gary Wilken gave the subcommittee report for the DEPARTMENT OF ADMINISTRATION. The subcommittee members were himself, Senator Lyda Green and Senator Kim Elton. He listed the significant changes in order of their BRU. The subcommittee recommended a $310,000 reduction for electronic efficiencies in the Division of Finance as a challenge accepted by the department. At the department's recommendation, a $916,000 decrement in the Leases program was suggested. The subcommittee also challenged the department to find $1.25 million in additional leasing revenues. Public Broadcasting Television was reduced by $51,200 but would not affect the ability to keep the stations on the air or to maintain federal funds. A new component called Satellite Infrastructure (ARCS) would keep public TV on the air. A $444,000 protection insurance policy would no longer be funded due to increase in the technology in fiber optics. Any outages would be in the middle of the night. The subcommittee directed the department to go to the University of Alaska-Alaska Three to obtain funding to increase distance delivery. An appropriation of $63,000 was added for the Aries Grant, which was the reading radio program. The subcommittee recognized the Administration's recommended increase of $2.364 million for the Pioneer Homes. This would add 50-60 additional caregivers and apply across the budget. Senator Gary Wilken pointed out $636,000 in reductions across the department. The subcommittee recommended funding an $150,000 increment for general relief grants. Funding for the Citizens Foster Care Review Panel was eliminated ($296,000.) The intent was to either fully fund the program to make it operable or shelve it until a future time when it could be properly funded. The Public Defenders Agency and the Office of Public Advocacy were funded at the FY99 level not including the supplemental request. This was causing concern at the subcommittee level as well as the user level. He would work with the Public Defender Agency to reconcile the differences of opinions. He felt the matter would have to be addressed in the future to establish an adequate level of funding. The subcommittee recommended accepting the $238.000 request for the Alaska Oil and Gas Conservation Commission. The Alaska Public Offices Commission was reduced by $50,000. The subcommittee recommended collapsing four components of the Division of Motor Vehicles into one and implementing a four-percent cost effectiveness reduction of $350,000. Senator Gary Wilken then gave the DEPARTMENT OF EDUCATION (except the K-12 formula) report. Subcommittee members were Senator Randy Phillips, Senator Kim Elton and Senator Gary Wilken. The subcommittee reduced the $1.5 million Governor's request for the Teaching and Learning Support to $1.096 million. Senator Gary Wilken wanted to make sure that the Legislature supported the Administration and the Department of Education's efforts to do the Exit Exams. These funds would be used with those granted the prior year to ensure that the test is as good as possible when it was administered to high school students. Belt tightening proposals were spread across the budget. A 15-percent department wide travel reduction was recommended. The subcommittee recognized the Governor's request for an increase of $250,000 increase for the District Support Services. This was a result of encouragement of the department to audit school district financial statements for the future adequacy study. State support was eliminated for the Kotzebue Technical Center. The subcommittee encouraged the University of Alaska, the industry and the City of Kotzebue to keep the center open. Alaska Vocational Technical Center would have a change in funding authority in the amount of $770,000 from general fund to statutory designated receipts. Authority was given to raise their tuition. Senator Gary Wilken analyzed that the center had considerable overhead and could reduce its costs to realize more from its operation and tuition. An increment of $150,000 was added to the Mt. Edgecumbe School for increased janitorial service. The subcommittee recommended rejection of an $190,000 increment for the Vocational Rehabilitation program. The subcommittee recognized an increment request of $100,000 for Alaska Libraries and Museums for library materials. A general reduction of $71,000 was made to Library Grants. Under the Alaska Postsecondary Education Commission, the contract fees to WAMMI were reduced by $150,000. That was not expected to affect the tuition support for FY02, 03 and 04, but would require the program to reassess the contract relationship between the University of Washington and the State Of Alaska. Senator Gary Wilken gave the ALASKA COURT SYSTEM subcommittee report. Senator Drue Pearce, Senator Dave Donley, Senator Robin Taylor Senator Al Adams and Senator Gary Wilken were members. The department was funded at FY99 level across the board with no increases. Senator Pete Kelly gave DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS subcommittee report. The subcommittee was able to meet the budget objective and address childcare programs and the rebate program, which was eliminated. A $200,000 general fund increase, $800,000 in tobacco settlement funds plus federal receipts transferred from the Department of Health and Social Services for childcare was denied in the subcommittee recommendation. The subcommittee discovered there was a quality portion of the childcare grant that needed to be replaced. That would be done in full committee and use inter-agency receipts to have no impact on general funds. The subcommittee denied the Governor's request for a Headstart program increment. However, the subcommittee recommended funding Headstart at $100,000 more than in FY99. The subcommittee rejected the $25,000 general fund match for a Bio-energy Grant for the Division of Energy. This would result in a loss of $34,000 in federal funds. There had not been many results from the Alternative Energy Program in resolving power problems in rural Alaska so the subcommittee recommended eliminating the project completely. The subcommittee initially did not recommend funding the RUBA grant portion of the Division of Municipal and Regional Assistance, which would result in the loss of federal funds as well. In talking to the department, other funds were found that could fund the state match and thus capture the federal funds. He would propose an amendment to make that change. Tape: SFC - 99 #90, Side B Senator Pete Kelly continued saying the subcommittee increased funding for the Headstart program by $100,000. The subcommittee also accepted the Governor's proposed $2 million increase for Daycare Assistance. Co-Chair Sean Parnell noted that he had asked the subcommittee to not address the Municipal Assistance Revenue Sharing portion of the department's budget. Senator Pete Kelly pointed out the subcommittee's recommended budget was a decrease of $4,200,000 from the Governor's proposed budget. The DEPARTMENT OF HEALTH AND SOCIAL SERVICES subcommittee report would not be closed out until the afternoon. Senator Pete Kelly gave a brief status report. The subcommittee was directed to limit the increase of funds to $11 million from FY99. Not including the formula portion, the recommended budget actually showed a $1.4 million reduction. There was a projected increase of $12,791 in the Governor's budget for Medicaid. The subcommittee denied that increment and took out a general fund portion of $4 million. He discussed the discrepancies of the Legislature and the Administration in Medicaid projections. Alcohol and Drug Abuse administration would have a reduction of $841,000 from the Governor's request. The department received an increase in federal funds that would allow for a 20-percent growth even with the state cuts. The subcommittee would address the matter of maintaining an adequate match to capture the federal funds. The subcommittee recommended funding the Governor's request for Adult Public Assistance at $2 million over the FY99 budget. Full funding was also recommended for the Denali Kid Care Program. The foster care component was funded with $19,280,00 over the FY99 budget. The funded projects exceeded the Governor's proposed level. The subcommittee recommended funding the annualized cost of the 28 social workers addressed the prior year. There was still some problems with CAMA that should be resolved in the afternoon's subcommittee meeting. He would provide the full committee a more detailed report after the subcommittee finished its closeout. Senator Lyda Green gave her subcommittee report for the DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT. The Tourism Development and the Alaska Tourism Marketing Council were removed from consideration as the issues were being addressed in separate legislation. The department recommended a cost allocation plan, which the subcommittee accepted. They requested $134,800 general fund reductions, but the subcommittee reduced that by $94,100. The statutory required foreign trade development locals in Japan and Korea were reduced by $80,000 by the subcommittee. The subcommittee recommended eliminating two specialist positions in the Division of Trade and Development. One was for mining and the other for big business. She noted there were other specialists and she hoped they would enlarge and combine their missions. The Commissioner's Office increment request for $94,100 was denied in the subcommittee report. Accepted, was a Nurse Aid Investigator position request that had been included in legislation the prior year but was later dropped. The subcommittee denied a requested increment to increase the Database Programmers Support in the Division of Occupational Licensing. Two data processing positions for the Division of Insurance were denied. A request for one Analyst Programmer II position in the Division of Banking, Securities and Corporations was approved. The committee denied three other increments for personnel. However, in the Cost Allocation Plan, there was an additional analysis position that could supplement that operation. Senator Lyda Green pointed out that HB 53 would allow the division to increase the funding that would come to them, which could possibly allow another position to be added in the future. The subcommittee met the target and appreciated the work of the department representatives. Members of the subcommittee beside herself were Senator Tim Kelly and Senator Georgianna Lincoln. She then gave the DEPARTMENT OF LABOR subcommittee report. This was difficult because of its small general fund portion. The subcommittee included Senator Sean Parnell, Senator Al Adams and Senator Lyda Green. The subcommittee recommended an overall reduction of $350,000 general funds. Four positions were eliminated, one new position request was denied and one full-time position was changed to part time. The subcommittee listened to the department's recommendations of where the cuts should be made, which were accepted. One vacant position in the commissioner's office was eliminated. In the Wage and Hour administration, two positions were eliminated with discretion left to the department as to which positions would be cut. The department chose to take their austerity belt tightening in the Division of Workers Compensation, the Labor Market Information and in Management Services. The subcommittee denied $80,000 for Mechanical Inspections denied for a Fairbanks Boiler Inspector position. The subcommittee met the goal of a $350,000 reduction. Senator Randy Phillips gave the subcommittee report for the DEPARTMENT OF MILITARY AND VETERANS AFFAIRS. The subcommittee consisted of himself, Senator Al Adams and Senator Dave Donley. The subcommittee proposed a $301,000 unallocated reduction to the department as directed by the full committee. He had some concerns with that amount, but he felt the full committee could address later. The House of Representatives recommended an amount that was only $125,000 below FY99. He commended the assistance of the commissioner and department staff. He would work with the commissioner. Senator Randy Phillips then gave the subcommittee report for the DEPARTMENT OF NATURAL RESOURCES. The members of the subcommittee included Senator Pete Kelly, Senator Georgianna Lincoln and himself. The subcommittee was given a cap of $38.280 million but actually went below the cap by $116,000. Land Development in Division of Lands was reduced by $1,008,500. Essentially, the planning section was eliminated and represented a 13.7 percent reduction in the division. The subcommittee recommended the Oil and Gas Development be reduced by $100,000. The Water Development was reduced by $125,000. This would not effect the hydrology section he stressed. The subcommittee accepted the Governor's proposed reduction of $75,000 for the University of Alaska-Fairbanks, Export Certification Program of the Division of Agriculture. He again commended the members of the subcommittee, the department and the commissioner. He added that he recommended to the committee two bills SB 140 to move the Division of Governmental Coordination to the Division of Lands and would have cost savings. The other bill would move the Animal Industries from Department of Environmental Conservation into the Division of Agriculture. This had the support of the farming industry and would bring efficiencies and cost savings to state government. Senator Al Adams asked about the $1 million reduction to the Division of Lands. He recalled the Taylor Plan that called for the sale of 250,000 acres and was to generate $350 million. This would require considerable land assessment and evaluation. Would that not be considered in the division's budget, he wondered. Senator Randy Phillips responded that, if and when the bill passed, it would be supported. Co-Chair Sean Parnell announced the next meeting agenda to address the **. He noted the committee was on target for reductions. Senator Randy Phillips asked if that was $21 million below the FY99 adjusted figures. He was told it was slightly below the targets. Senator Al Adams asked if the debate for education funding and municipal assistance and * would be held in full committee. Co-Chair Sean Parnell announced that the next meeting the committee would address the University of Alaska, the Legislative Affairs Agency, the Office of the Governor and the Department of Corrections. The process was still on target in that the proposed budget was $73 million below the Governor's request. The figures were about $21 million below the funding for the FY99 adjusted base. Senator Al Adams asked about the Municipal Assistance and Revenue Sharing programs. He said there were some conflicting population figures that were effecting the education funding. He wanted to work with the Department of Education to correct those figures. Senator Gary Wilken commented that he had to remind himself that he volunteered for the position on the Senate Finance Committee. It was difficult but he appreciated the assistance of his staff and the departments. Co-Chair John Torgerson asked if the remaining closeouts were all the committee would hear at the next meeting. Co- Chair Sean Parnell said it depended on bill drafting. There would be a public testimony meeting at 6:00 PM. All members should plan to attend. Break 10:22 AM / 10:22 AM Co-Chair Sean Parnell announced that the overview information would be posted on the Internet by noon. Impact statements from the departments would be posted as soon as available. Senator Al Adams asked to have them delivered to members' offices. ADJOURNED Senator Parnell adjourned the meeting at 10:23 AM. SFC-99 (19) 4/14/99