Legislature(2023 - 2024)ADAMS 519
01/30/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB40 | |
| Overview: Capital Budget by the Office of Management and Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 40 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HOUSE BILL NO. 40
"An Act making appropriations, including capital
appropriations and other appropriations; making
supplemental appropriations; making
appropriations to capitalize funds; and providing
for an effective date."
1:36:16 PM
^OVERVIEW: CAPITAL BUDGET BY THE OFFICE OF MANAGEMENT and
BUDGET
1:36:18 PM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, provided a PowerPoint presentation
titled "State of Alaska Office of Management and Budget:
Capital Budget HB40 and HB41" dated January 30, 2023 (copy
on file). He relayed the capital budget had been released
on December 15 and was split between the primary capital
budget bill, HB 40, and the mental health budget, HB 41. He
began with a table on slide 2 reflecting that the vast
majority of the funding was in HB 40. Additionally, HB 41
included $10 million in mental health related unrestricted
general fund (UGF) capital projects. The total proposed
general fund capital was $276.4 million, which leveraged
about $1.7 billion in federal funds for a total of $2.1
billion in overall capital spending. The budget included
funding to match core federal programs and certain
infrastructure bill projects resulting from Infrastructure
Investment and Jobs Act (IIJA). He noted the house
districts listed in the bills reflected districts prior to
redistricting. He explained that the official file that
came from the Division of Elections had not yet been
finalized and incorporated into the budget system.
1:38:09 PM
Mr. Steininger moved to a bar chart illustrating a capital
budget five-year history on slide 3. He highlighted there
had been fairly constrained UGF funding in the FY 20 and FY
21 capital budgets and much smaller amounts of federal
funding (reflected in light blue). The growth in the light
blue portions of the bars in FY 22 and FY 23 represented
appropriations of IIJA funding. He highlighted a
significant increase in the state's receipts through the
Village Safe Water Program, the Aviation Improvement
Programs, and the Department of Transportation and Public
Facilities (DOT) Surface Transportation Program. He
remarked that the state funding had increased federal
funding.
Mr. Steininger pointed out that UGF funding was fairly low
in FY 21 because there had only been a partial capital
budget appropriated. He explained that the legislature was
mid-session when the COVID-19 pandemic hit, and the capital
budget had been left uncompleted. He relayed that much of
the funding was made up in the FY 22 budget for core
programs.
Co-Chair Edgmon stated there had been many unknowns the
previous year when the legislature had been going through
debate on the federal infrastructure bill. He noted it had
taken until mid-session or later to get a good handle on
the funds. He recalled that the $1.2 trillion included $600
million [billion] or less for formula programs with the
remainder for competitive grant programs. He asked if the
governor had hired someone to take Mr. Miles Baker's
position as the coordinator of the infrastructure program.
Mr. Steininger answered there was more information known
about the infrastructure program since the previous year.
The state had learned that many of the opportunities were
competitive. He stated there were a couple of new items for
the Alaska Energy Authority (AEA) added into the capital
budget; however, there were not as many items as the
initial optimistic estimates had indicated the state would
receive. There had been appropriations the previous year to
enable some of the agencies to chase the federal rewards.
He highlighted the Alaska Marine Highway System (AMHS) as
an example of an agency seeing a recent release of rewards.
He noted the news was very recent and was not included in
the current capital budget. The governor's office had an
acting infrastructure coordinator who may not be the
permanent coordinator.
1:42:12 PM
Mr. Steininger continued to review slide 3 and noted that
the dark blue bars reflecting UGF were much larger in FY 22
and FY 23 than in other years. He expounded there were
substantial surpluses when the FY 23 budget had been
developed. He explained that much of the surplus funding
had gone to discretionary capital budget items with pent up
demand over a long time period of fairly constrained
capital budgets. The FY 24 capital budget decreased because
there had not been room for a discretionary capital budget
of the size seen in FY 23.
Mr. Steininger advanced to slide 4 titled "UGF Capital
Minimum Match." The slide addressed the amount of money
necessary in order to match to core federal programs and
how it had changed over the past couple of years. He
highlighted the increase in federal rewards coming in due
to IIJA. The dark blue portion of the bars represented the
base capital budget (the base match for core federal
programs). The light yellow bars reflected matching funds
leveraging federal funding and discretionary funds for
state funded programs. He remarked there had been a
significant increase in the general funds needed to fund
and leverage federal dollars. The FY 24 proposed budget
included about $167.4 million for core recurring projects
listed on slide 4:
Baseline/Minimum match projects include:
• Community Block Grants
• Alaska Energy Authority Energy Projects
• Village Safe Water and Wastewater
• AHFC Housing Programs
• Surface Transportation and Aviation State Match
Mr. Steininger elaborated that the Village Safe Water and
Surface Transportation and Aviation Programs saw
significant increase from IIJA, which drove a corresponding
increase in the need for matching funds in the capital
budget. He highlighted the match amount was roughly double
what it had been in FY 20 and FY 21. He noted it was not an
entirely fair comparison because the state had used other
mechanisms in FY 20 and FY 21 to cobble the matching funds
together. He explained that money had been reallocated from
older completed projects with funding remaining.
1:45:32 PM
Mr. Steininger turned to slide 5 titled "Capital UGF
Unobligated Appropriations." He reported that per statute,
capital projects had a five-year time horizon before the
funding lapsed. The projects could be administratively
extended annually if there was activity on a project within
the course of the year. He used a hypothetical road project
as an example and explained that if the construction
process was taking longer than the five-year timeframe, the
project could be extended as long as there was active work
taking place. Slide 5 showed the amount of funding left on
aged projects.
Mr. Steininger remarked that as expected, there was
significant funding remaining for FY 23 projects because
they had just become active on July 1, 2022. He noted that
many of the projects for FY 22 had only become effective at
the end of June of 2022. He pointed out there was still
unspent money on projects that went back greater than ten
years. He explained that some of the projects had been
completed under budget and had unobligated money remaining.
He detailed that the Office of Management and Budget (OMB)
produced an annual capital appropriation status report
detailing every project reflected on slide 5, the remaining
funding, whether a project had been extended and the reason
for the extension, or if the money was unspent and
available for reappropriation or lapse back into the
General Fund.
1:47:46 PM
Representative Hannan observed the graph on slide 5 did not
distinguish money still needed to complete projects that
had taken longer than five years from money that was
available for reappropriation because a project had been
completed and had funding remaining. She asked if the
information would be presented to the committee. She was
particularly interested in the information for the projects
in the six to ten-year range.
Mr. Steininger replied that the capital appropriation
status report included many of the different data points to
get a better idea on which of the projects were still
moving forward and which projects may have funding
available for reappropriation. The report also included the
project location and details.
Representative Hannan asked for clarification on whether
she needed to dig through the report to determine whether
there was $1 million laying around in a project that had
not been noticed or whether $1 million was needed to
complete a project. She reasoned that if the state had
already invested the vast majority of the funding for a
project, most people would conclude the funding would be
used to complete a project. She thought there should be a
pretty good handle on whether there was funding available
that went back ten years. She pointed out that a few
million dollars here and there made a difference for new
projects. She asked if committee members should look for
the funding or if that was up to OMB.
Mr. Steininger answered that part of OMB's development
process for the amended and supplemental budgets often
involved looking at old projects to identify which ones
could be reappropriated for different uses or to fund state
match for federal programs. He elaborated that OMB
identified some of the old projects [with remaining
funding] that the administration felt could be moved to a
different use. He relayed there was the opportunity for the
legislature to review the [capital appropriation status]
report and locate projects to propose for an alternative
use.
Co-Chair Edgmon asked if any of the two bars on the far
right of the slide 5 were affiliated with COVID-19 capital
funds that were still on the books.
1:51:31 PM
Mr. Steininger answered the chart should filter out any of
the Coronavirus Relief Fund (CRF) or American Rescue Plan
Act (ARPA) dollars that had been appropriated directly to a
capital project. He would confirm and follow up.
Mr. Steininger reviewed FY 24 capital project highlights
[by department] beginning on slide 6 [through slide 10]. He
noted the slides did not cover every project included in
the capital budget. The slides included projects that were
either new, had a unique quality, or were a priority of the
administration. He began with the Department of Commerce,
Community and Economic Development (DCCED). He relayed the
Alaska Gasline Development Corporation (AGDC) had been
pursuing a project to make Alaska a hydrogen hub. He
detailed that $10 million in federal receipts would be
available in case the pursuit was successful. There was
still a question on whether the project would be viable,
and he was anticipating additional information from the
agency in the future. The second project was $1.8 million
for AEA pertaining to a statewide grid resilience and
reliability. The item was new and was $12 million in
federal receipts from IIJA.
Representative Stapp asked if a state match had been
identified for the $10 million in federal funds for the
hydrogen hub.
Mr. Steininger answered it was too early in the planning
stages to know.
Mr. Steininger continued to review DCCED projects on slide
6. The third project was $2.5 million of business licensing
corporate filing fees to build a public engagement and
customer relationship management system for the Division of
Corporations, Business and Professional Licensing (CBPL).
The budget also included $3 million in a named recipient
grant to build out three-phase power extensions and
upgrades in the Delta Farm Region. The item worked towards
the governor's Food Security Initiative. The last DCCED
item was $5 million for statewide marketing and economic
development to market Alaska as a place to do business and
market items made in Alaska to those outside of Alaska. He
moved to the Department of Corrections (DOC) and
highlighted a $3 million UGF increment for the Point
Mackenzie Correctional Farm Produce Processing Plant. The
goal was to provide food to the entire correctional system
by processing the food grown at the plant.
Co-Chair Edgmon remarked it had been just a couple of years
ago when the last two economic development staff had been
transferred from DCCED to the governor's office. He asked
if the staff were returning to DCCED to administer the $5
million [for statewide marketing and economic development].
Alternatively, he asked if the increment anticipated the
creation of new staff.
Mr. Steininger answered that the appropriation was for new
activities at DCCED. He was uncertain whether the incumbent
staff would be transferred back to DCCED. He would follow
up on the question. The idea behind the increment was to
restart some of the activity that had been tapered down and
eliminated over the years of budget cuts. He stated the
transfer of positions had occurred during a different
economic time for the state. He remarked that things had
changed considerably in two years.
1:55:54 PM
Representative Josephson asked about the program receipts
of $5 million for the statewide marketing and economic
development initiative under DCCED. He wondered what made
them program receipts.
Mr. Steininger replied that the $5 million came from
business licensing fees, which were classified as program
receipts and designated general funds (DGF). He explained
that CBPL was responsible for collecting the fees.
Representative Josephson asked what the receipts had been
used for in previous years.
Mr. Steininger answered that the business licensing
receipts had been suspended during COVID-19 for a period of
time. The fees could be utilized for the proposed activity
as the need to have the fees suspended began to go away.
1:57:04 PM
Representative Tomaszewski looked at the three-phase power
extensions and upgrades to Delta Farm region. He asked if
any other farm regions had applied for grants for that
purpose.
Mr. Steininger answered that he was not aware of any other
regions that had applied for the funding. He relayed the
project had been identified as a specific need through
community engagement.
Co-Chair Johnson stated she had recently heard about
additional federal funding for AMHS. She asked for detail.
Mr. Steininger replied that the state had received notice
the previous week that it was being awarded a significant
amount of capital funding for AMHS. The current capital
budget did not include matching funds. The administration
believed a couple of the appropriations could be applied to
the match for some of the projects. He explained that OMB
was still working through how much additional match the
state would need. He noted the committee could anticipate
seeing amendments related to the funds.
Co-Chair Johnson asked for verification the state did not
know the matching requirement for the federal funds.
Mr. Steininger believed the dollar amount was known, but he
did not have it on hand. He relayed that OMB did not yet
know how much additional appropriation would be needed to
cover the incoming funds.
1:59:30 PM
Co-Chair Edgmon believed it illustrated the "gargantuan"
infrastructure act was still unfolding before the state's
eyes. He believed there would likely be additional
instances where the arrival of things like the ferry
funding came unexpectedly and would require budget
amendments.
Representative Hannan looked at the funding for the
statewide marketing and economic development initiative
under DCCED coming in the form of program receipts. She
asked how to anticipate the program receipts for the
license fees that had been waived for two years and
reinstated. She highlighted that most business licensures
were on a two-year cycle. She considered a scenario where
license holders had to pay their fees in the current year
and it brought in $10 million. She noted that the proposed
increment was $5 million. She asked if the funding was to
be spent over a period of five years or one year only. She
asked for the total anticipated program receipts for the
current and next fiscal years. She stated that one issue
had been ensuring the program receipt funding was available
for a two-year cycle of investigation of boards receipts
malfeasance. She explained that program receipts had to
cover operations. She remarked that when the fees had been
waived for two years the state dropped out of sync of
knowing what the incoming funding would be in the next
fiscal year. She wondered if $5 million in one year
represented 50 percent of anticipated program receipts or 1
percent.
Mr. Steininger deferred to DCCED for detail.
2:01:38 PM
HANNAH LAGER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, OFFICE OF
THE GOVERNOR (via teleconference), replied that the license
receipts were collected every year for corporations and
businesses. They were slightly different than fees that
were collected every two years. The most recent revenue
projections were just over $5 million for a full fiscal
year. The increment [on slide 6] was a one-time capital
appropriation with a five-year collection period.
Representative Hannan asked what the department would
anticipate in terms of any restraints for the department to
do its job if the $5 million in fees were diverted entirely
from operation to capital.
Ms. Lager answered that corporations filing receipts had
been collected during the COVID-19 pandemic and had been
sufficient to fund ongoing operations.
Representative Ortiz asked if the legislature could expect
an amended capital budget from the governor's office.
Mr. Steininger answered that per statute the governor's
office had until the 30th day of session to release
amendments to any of the budgets (operating, capital, and
mental health). The deadline was February 15 in the current
session.
Representative Ortiz asked if the legislature could expect
to know the state matching requirement in order to receive
the $285 million for AMHS. He asked for verification the
request would come from the administration the amended
budget.
Mr. Steininger replied affirmatively.
2:05:03 PM
Representative Coulombe looked at the increment for the
Point Mackenzie Correctional Farm Produce Processing Plant
under DOC. She remarked that DOC had already received $1.5
million for the plant and the request was for an additional
$3 million. She asked if the additional funding was due to
building cost increases.
Mr. Steininger confirmed the increment was in addition to
the [previously funded] $1.5 million to complete the
processing plant. He deferred to the department for
additional detail.
2:06:53 PM
TERI WEST, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT OF
CORRECTIONS, OFFICE OF THE GOVERNOR (via teleconference),
replied that DOC had solicited and negotiated a contract
with an engineer to complete a bid-ready design. She
explained that additional costs had been identified during
the process. Additionally, the cost of construction and
equipment had risen since the original review.
Representative Coulombe asked if the initial ask for $1.5
million was only for planning and design. She asked if
anything had been built yet.
Ms. West replied that she would follow up with the
information.
2:07:35 PM
AT EASE
2:08:11 PM
RECONVENED
Co-Chair Edgmon asked the previous speaker to identify
herself for the record.
Ms. West complied.
Mr. Steininger turned to slide 7 and continued to review
capital highlights. He reviewed an increment of $100,000 to
build out ambient air monitoring shelters within the
Department of Environmental Conservation (DEC) budget. The
item was associated with an operating budget request to
increase the ability to monitor pollutants coming into the
state from outside sources. Under the Department of Fish
and Game (DFG), the budget included $1 million UGF and $2
million in federal funds for Arctic fisheries. He
elaborated that as the Arctic waterways opened up more,
there may be opportunity for commercial fisheries in the
region. The increment would fund associated research.
Mr. Steininger reviewed a $10 million increment for the
Office of the Governor for legal, expertise, and
consultation services to support statehood defense.
Co-Chair Foster referenced the DFG budget. He stated his
understanding the governor had included money for the
collapse of the salmon fisheries on the Yukon. He asked if
the increment was perhaps located in the operating budget.
Mr. Steininger replied that there were other capital
projects for DFG. The [Arctic fisheries] item had been
selected for the slide because it was a new initiative.
The budget did include appropriations related to research
for other fisheries around the state. He noted there were
capital and operating appropriations to look at the
particular region. He deferred to DFG for further detail.
Co-Chair Foster requested additional detail.
2:11:07 PM
MELISSA HILL, ACTING ADMINISTRATIVE SERVICES DIRECTOR,
DEPARTMENT OF FISH AND GAME, OFFICE OF THE GOVERNOR (via
teleconference), asked to for the question to be restated.
Co-Chair Foster restated his question. He asked if the
capital budget included an increment related to the salmon
collapse on the Yukon.
Ms. Hill replied that she would follow up. She noted there
were some capital projects regarding Yukon research. The
department was also utilizing some food security monies
received during COVID for research as well.
Representative Josephson referenced the legal and expertise
dollars for the Office of the Governor on slide 7. He
remarked that the project summary on page 68 [of the
capital budget backup information] clearly indicated the
funding was for human capacity and personnel. He asked if
it would be more appropriate to include the funding in the
Department of Law's (DOL) operating budget for
transparency.
Mr. Steininger answered that the location of the
appropriation had been discussed during the development of
the budget. The prior two appropriations for statehood
defense went to DOL directly. The administration had
included the increment under the Office of the Governor
because some of the activities fell outside of DOL's
purview. For example, a case requiring research, science,
or data collection would be better done by the Department
of Natural Resources (DNR) and the Office of the Governor
could use a reimbursable services agreement (RSA) to
transfer some of the funding to DNR to support the work. He
stated DOL was probably the largest piece of the activity
because it was primarily litigation or hiring outside
counsel. He noted that if the appropriation was made to DOL
it could be managed the same way. He stated that including
the money under the Office of the Governor provided for the
slightly expanded scope of what the money could be used
for.
2:14:28 PM
Representative Josephson was interested in DOL's batting
average in prevailing in the cases. The legislature was
seeing a steady increase in the item every year and he
wanted to know more about it.
Representative Stapp referenced the increment for Arctic
fisheries and read the backup information specifying the
funding was for potential study of commercial fishing for
Arctic fin fish. He had never heard about the concept of
commercial fishing in the Chukchi Sea or other. He asked if
there was a contact his office could reach out to for more
information on the need for the study.
Mr. Steininger answered that the commissioner of DFG
[Commissioner Doug Vincent-Lang] was interested in the idea
as an opportunity for the state. He indicated the
commissioner would be a good person to speak to. He
clarified the fisheries did not currently exist; the
commissioner saw the fisheries on the horizon as a result
of waterways opening up.
Co-Chair Edgmon believed it was broader than just the
opening of waterways. He pointed out it included warming
ocean trends moving fish farther north along the coast. The
state was seeing certain species that had not been seen in
areas before and salmon being caught in the northern part
of the state where they had not previously been.
2:16:48 PM
Representative Hannan referenced the statehood defense
funding under the Office of the Governor. She asked if the
$10 million was for new or ongoing litigation. She referred
to a court ruling impacting Southeast trollers targeted in
the multistate treaty related to salmon harvest. She asked
if there was potential for the state to intervene in the
case with some of the funding.
Mr. Steininger answered there was a report of current
litigation and where DOL saw the next steps for litigation.
The overall list was far greater in estimated costs than
$6.5 million appropriated in the prior two years could
support. Part of the increment pertained to continued
litigation and part pertained to new litigation as issues
arose. He deferred to DOL for discussion of specific cases
or issues. He stated OMB could provide reports on current
ongoing cases. He referred to Representative Josephson's
earlier question about the success rate of prior
initiatives and relayed the information could be provided
to the committee.
2:19:06 PM
Mr. Steininger reviewed the increments for the Department
of Labor and Workforce Development (DLWD) at the bottom of
slide 7. The budget included $1.3 million UGF for the
Business Enterprise Program, which provided startup capital
to blind and disabled businesses. He explained that the
fund that funded the program was part of the sweep. He
elaborated funding was generated through payments back from
income earned by the blind and disabled businesses. The
administration included the funding in addition to another
$620,000 for a childcare facility pilot program at the Mat-
Su Regional Hospital to look at expanding childcare. He
explained the total funding was equal to the amount swept
from the program into the Constitutional Budget Reserve
(CBR).
Representative Josephson asked for verification the
increments were replacing dollars in an account that had
been swept.
Mr. Steininger replied affirmatively.
Representative Josephson asked if the funds had been swept
seven months back at midnight on June 30, 2022.
Mr. Steininger answered affirmatively. He detailed the
increments reflected an appropriation of UGF to a capital
project, which would be considered obligated and not
subject to the sweep at the end of the current fiscal year.
Representative Josephson asked if the funds were part of
tens of millions of dollars like the Higher Education Fund
(that disappeared into the CBR) or relatively small
accounts.
Mr. Steininger would provide the committee with the list
from the state's financial report. He noted only the
unaudited list was available at present. The list would
include the amounts swept from individual funds, which were
primarily smaller funds. The prior budget had replaced the
use of the funds with UGF where they supported state agency
operations to account for the sweep. The issue pertaining
to the funding for DLWD had not been resolved in the prior
budget and had come to the administration's attention over
the summer. He stated it was different solution to a
problem caused from the same action.
2:22:29 PM
Representative Josephson asked if the funds would not have
needed to be backfilled if the House had voted in favor of
the CBR draw.
Mr. Steininger replied that if the CBR sweep had been
reversed, the Business Enterprise Program would have
retained the $2 million and could have continued program
operations.
Co-Chair Edgmon recalled that the three-quarter vote that
happened on the last day of session [in 2022] pertained
solely to the additional funding for the Permanent Fund
Dividend; it had not been the traditional three-quarter
vote that would have reversed the annual sweep of the
plethora of smaller funds. He asked if it was Mr.
Steininger's recollection as well.
Mr. Steininger replied that he would have to follow up to
determine whether there had been sweep language.
Co-Chair Edgmon stated to his knowledge there had not.
Representative Galvin asked about the $10 million increment
for legal expertise under the Office of the Governor on
slide 7. She looked at the backup documents and indicated
the increment was almost entirely for the purpose of legal
counsel. She thought it appeared the work that would be
beyond DOL also pertained to people. She asked why it had
been included in the capital budget.
2:25:24 PM
Mr. Steininger believed the question came down to what was
classified as a capital project versus an operating
project. He stated there were a couple reasons the
administration had proposed the increment as a capital
project. He detailed that some of the cases took an
indeterminate amount of time; the court system did not
operate on the same timelines as the fiscal year structure.
He explained that capital appropriations lapsed after five
years rather than one year, which provided more
flexibility.
Representative Galvin asked if it was out of the realm of
possibility to come back if more was needed in the
following year if the increment was included in the
operating budget. She noted that when she looked at many of
the numbers, she saw numerous unused funds. She reasoned
that when looking for unused funds it seemed to be good
practice to tighten up a bit to reduce the number of
"hanging loose funds." She was trying to draw a balance
between allowing for the extended time to spend the funds
for what appeared to be a general statement about how the
funds would be spent and helping the public appreciate
capital versus operating needs. She was struggling to
understand why the funds needed the coming year would not
be included in the operating budget. She suggested that if
there were extended legal battles, the funding could be
requested in a future operating budget or from other
unspent funds.
2:28:21 PM
Mr. Steininger understood the question and the desire to
take the situation year by year. He stated that function in
operating budgets for the state was a year-over-year
decision. He explained that the specific situation was a
bit unique because of the need to enter into long-term
contracts for professional services. The administration had
proposed the item as capital to make the operational
function easier and would avoid running the risk of having
a single year appropriation for a project that may take
multiple years. The goal was to provide resourcing to DOL,
DEC, DFG, and DNR in order to defend the state's right to
develop its lands. The budget proposal was one mechanism to
get to that goal.
Co-Chair Edgmon noted they were about halfway through the
slides. He suggested picking up the pace.
2:30:25 PM
Mr. Steininger moved to slide 8 and continued to review FY
24 capital budget highlights. There was a $1 million UGF
increment with $6 million in federal match for construction
completion of a certified veterans cemetery in Fairbanks
within the Department of Military and Veterans Affairs
(DMVA) budget. The DNR budget included $2.4 million for
construction of new public use cabins, $2 million for
sanitation upgrades to parks (i.e., providing for newer,
cleaner bathrooms and sanitation systems), and $2 million
for bison range restoration to clean up and clear out space
for a heard of bison to work towards food security
initiatives looking to provide for feed stock for other
farmers.
Mr. Steininger moved to slide 9 and continued to review FY
24 capital budget highlights beginning with a handful of
increments for the Department of Public Safety (DPS). There
were numerous projects throughout DPS to maintain and
upgrade some of the facilities. There was funding for
training academy maintenance and updates; classroom and
offices in the DPS Bethel hangar; forensic equipment in the
State Crime Lab; Fairbanks Post remodel and expansion
including the evidence, storage, and impound lot; and
Criminal Justice Information System modernization. Under
the Department of Revenue (DOR) there was an increment for
the Alaska Housing Finance Corporation (AHFC) Rural
Professional Housing Program. He elaborated that the
program had previously been limited to health
professionals, teachers, and public safety professionals
and had been funded at the $1.75 million level from the
AHFC dividend. The increment added another $3.25 million
UGF and had expanded it to cover all rural public
professionals.
2:33:24 PM
Mr. Steininger turned to slide 10 and continued to review
FY 24 capital highlights for the departments. The budget
included $1.7 million for Alaska Land Mobile Radio System
(ALMR) in-vehicle radio replacements under the Department
of Transportation and Public Facilities (DOT). The amount
reflected approximately one-third of the cost of replacing
all vehicle radios. The replacement was necessary because
ALMR was moving to a more modern technology; the system
could not switch to the modern technology until all of the
radios were compatible. The DOT budget also included $2
million for Dalton Highway delineators. He explained that
delineators are reflectors on the side of the road. Federal
code required the delineators to be white in color, but
during a snowstorm on the Dalton Highway white reflectors
were challenging for truck drivers to see. The increment
was funded with state funds because the new reflectors were
not covered by the federal program.
Mr. Steininger reviewed two increments for the University
of Alaska on slide 10. The budget included $2 million for a
capital buildout for a Washington, Wyoming, Alaska,
Montana, and Idaho (WWAMI) Program health facility, which
helped add ten additional seats in the program.
Co-Chair Johnson asked about the reflectors for DOT. She
asked it meant there would be white reflectors in addition
to reflectors in another color. She wondered if the state
would be taking over the installation and maintenance of
the reflectors in general.
Mr. Steininger deferred the question to DOT [there was no
one from DOT available online].
2:35:22 PM
Mr. Steininger would follow up with the information.
Co-Chair Johnson would like to know more about the issue.
She suggested adding the new color to the white reflector
in order to prevent the state from bearing the entire cost
of the project.
Representative Hannan remarked there were other areas in
Alaska that would have the same snow issue as on the Dalton
Highway. She asked for follow up.
Mr. Steininger continued to review capital highlights for
the University on slide 10. The budget included $10 million
for the drone program. He stated the funding was in
addition to $10 million provided to the program the
previous year.
Representative Galvin looked at the WWAMI Program shown on
slide 10. She stated her understanding the increment would
allow space for 10 additional positions. She noted the item
was identified as phase 2. She asked if it was phase 2 of
2.
Mr. Steininger replied that he would follow up. The item
allowed for the addition of 10 new seats.
2:37:48 PM
Mr. Steininger highlighted increments for the Judiciary at
the bottom of slide 10. The budget included $2.4 million
item for justice technology upgrades and courtroom
modernization, in addition to $3 million for court security
projects.
Representative Josephson speculated that the administration
could ask for and receive more in the area of rural
housing. He did not see funding for school major
maintenance/construction and deferred maintenance listed in
the presentation. He noted the legislature had been eager
to do work on school major maintenance. He surmised the
governor had been less eager because he had vetoed a fair
amount of the funding. He asked for the administration's
position on the items.
Mr. Steininger answered that it was not reflected on the
slides, but the budget included some funding for deferred
maintenance on state facilities including the Office of the
Governor, in coordination with DOT. The budget did not
include funding for school major maintenance. He explained
that in light of facing a multiple hundred million dollar
deficit, it had not been included.
Representative Galvin asked if the deferred maintenance
funding in the DOT budget included K-12 and the University.
Mr. Steininger answered the funding was for state owned
facilities. He stated the University was included in the
distribution in most years. He elaborated that in some
years the University had received a direct appropriation
for a specific project or a more general need. If
appropriated as had been proposed, the administration would
likely distribute a portion of the funding to the
University for its highest priority projects.
2:40:34 PM
Co-Chair Edgmon looked at a chart showing capital UGF
unobligated appropriations on slide 5. He asked if some of
it pertained to deferred maintenance.
Mr. Steininger assumed there was some. He relayed that
appropriations for statewide deferred maintenance through
the Office of the Governor were classified as DGF and were
not reflected in the slide. There was a bit left that had
not been distributed to projects and some projects had
received funding but had not been completed. A small
portion was generally withheld in case some projects went
over budget. The unobligated balances would be two years
old, not five to ten years old.
Co-Chair Edgmon stated that the previous year the
legislature passed $100 million in statewide deferred
maintenance, $100 million in school construction
maintenance, and $50 million in University maintenance. He
explained that the governor had pared the funds back
considerably. He believed the statewide maintenance had
been reduced to around $27 million.
2:42:17 PM
Mr. Steininger turned to slide 12 showing a snapshot of the
capital budget split out by agency. He relayed that
agencies with a larger number of facilities tended to have
more funding in the capital budget. Additionally,
departments with larger federal match programs like DOT and
DEC accounted for the bulk of the capital budget.
Representative Stapp asked for the current total deferred
maintenance liability for all state facilities.
Mr. Steininger believed the figure was around $700 million.
He would follow up with the precise number.
Mr. Steininger turned to a table showing the FY 24 capital
budget broken out by House district. He noted the
information was based on legacy House districts, not the
new district after redistricting. He pointed to the bottom
row showing statewide districts and explained that some of
the funding would be distributed across districts once a
determination had been made about how the DOT Statewide
Transportation Improvement Program (STIP) would be
distributed. The slide showed a preliminary view of the
distribution.
2:44:28 PM
Mr. Steininger turned to a 10-year lookback of the capital
budget on slide 14. The slide showed a time period from FY
16 to FY 21 where UGF capital budgets (shown in dark blue)
were fairly constrained due to lack of revenue.
Co-Chair Foster looked at slide 9 and a DOR increment for
AHFC rural professional housing. He asked if it was also
referred to as the teacher health aide in DPS. He asked Mr.
Steininger to elaborate on the project. He thought the
Office of Children's Services (OCS) may have been included.
Mr. Steininger confirmed it was traditionally the teacher
health professional public safety housing. The expansion
came back to the recruitment and retention of state
employees. He elaborated that one of the greatest
impediments to recruitment and retention was a lack in
available housing for any agency with a presence in rural
Alaska. He listed OCS, DFG, and DNR as examples with a
large presence in rural Alaska. He explained that the
agencies had not been covered under the previous program.
He elaborated that when determining how to solve the
problem, expanding an existing program made sense. The
administration was working with AHFC to determine if the
existing grant program rules made sense for the new
structure. The administration was looking to expand beyond
the traditional group, but it wanted to ensure the original
users such as DPS and nursing were not crowded out as the
scope was expanded.
2:47:10 PM
Co-Chair Foster thought it sounded like the program would
be expanding to include professionals working for the State
of Alaska in rural Alaska.
Co-Chair Edgmon reviewed the schedule for the following
day.