Legislature(2025 - 2026)ADAMS 519
03/07/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB53 || HB55 | |
| Subcommittee Closout Reports | |
| Department of Commerce, Community and Economic Development | |
| Department of Education and Early Development | |
| Department of Health | |
| Department of Military and Veterans Affairs | |
| Department of Corrections | |
| Department of Transportation and Public Facilities | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 53 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 53
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making reappropriations; 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."
HOUSE BILL NO. 55
"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."
1:36:09 PM
^SUBCOMMITTEE CLOSOUT REPORTS
1:36:12 PM
^DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT
1:36:16 PM
LISA KELLER, STAFF, REPRESENTATIVE ALYSE GALVIN, reviewed
the subcommittee recommendations for the Department of
Commerce, Community and Economic Development (DCCED)(copy
on file):
The House Finance Budget Subcommittee for the
Department of Commerce, Community and Economic
Development submits the following recommended
operating budget for FY26 to the House Finance
Committee.
RECOMMENDATIONS
Fund Source: (dollars are in thousands)
Unrestricted General Funds (UGF) $17,342.0
Designated General Funds (DGF) $68,706.9
Other Funds $63,208.0
Federal Funds $42,438.0
Total $191,694.9
Compared to the FY26 governor's amended budget
proposal, subcommittee recommendations represent an
increase of $577.2 (+0.3 percent) in Unrestricted
General Funds (UGF).
Positions:
Permanent Full-time 575
Permanent Part-time 0
Temporary 27
Total 602
Compared to the FY26 governor's amended budget
proposal, recommendations represent an increase of 3
positions (+0.5 percent).
BUDGET ACTIONS
The House Finance Budget Subcommittee for Department
of Commerce, Community & Economic Development reviewed
the FY26 budget request and adopted all items and
added:
An increment of $577.2 in UGF to establish an Office
of Entrepreneurship to develop and lead efforts to
diversify and grow Alaska's economy. This action adds
3 full-time positions to the Department of Commerce,
Community and Economic Development. The office will
promote innovation-based economic development, new
venture and job creation in emerging sectors, and
facilitate engagement of startups with the State of
Alaska to increase the use of local and Alaskan
sources of goods and services. This funding enables
the state to act on our 2022-2027 Comprehensive
Economic Development Strategy.
There were 4 items in the budget (numbers 20, 21, 22,
and 23) that were not under the purview of the
subcommittee. These items are related and are
technical fixes.
RECOMMENDED INTENT LANGUAGE
The subcommittee is forwarding the following pieces of
intent language for consideration:
It is the intent of the legislature that the Alaska
Oil and Gas Conservation Commission prepare and submit
a report to the co-chairs of the Finance Committee and
the Legislative Finance Division by February 15, 2026.
The report shall include a timeline that includes key
goals and milestones for the carbon storage project
and an estimated date of the revenue realization
point.
It is the intent of the legislature that the Office of
Entrepreneurship prepare and submit a report to the
co-chairs of the Finance Committee and the Legislative
Finance Division by February 15, 2026. The report
shall include a comprehensive business plan with a
timeline and an update on the progress standing up the
office.
SUBCOMMITTEE AMENDMENTS
The chair set an amendment deadline and welcomed
amendments from all members. The subcommittee received
one amendment. The amendment failed.
ATTACHED REPORT
The House Finance Budget Subcommittee for the
Department of Commerce, Community and Economic
Development adopted the attached report:
House Finance Department of Commerce, Community and
Economic Development Budget Action Report
1:40:01 PM
Representative Tomaszewski thought the committee was not
doing intent language. He referenced a conversation at the
beginning of the subcommittee process related to intent
language. He expressed confusion over why intent language
was included.
Co-Chair Josephson answered that finance subcommittees
principally looked at numbers not language. The committee
allowed recommendations for intent language. Theoretically
a member of the committee could offer an amendment to the
budget with intent language during the amendment process
that would take place in a couple of weeks.
1:41:12 PM
Representative Hannan was interested in the intent language
related to carbon storage. She recalled that the Alaska Oil
and Gas Conservation Commission (AOGCC) had control of the
appeal to get a certain kind of wells authorized and once
authorized the state would have primacy over a certain type
of well.
Co-Chair Josephson interjected that the wells were "class
6."
Representative Hannan continued her question. She stated
her understanding that the Department of Natural Resources
(DNR) would do an analysis of when the state would get
revenue. She considered the intent language and suggested
the legislature may want to look at a couple of agencies
working together to provide a full picture that was not
limited to the work AOGCC had done on class 6 wells. She
wondered whether the discussion had come up.
Ms. Keller replied that there had been some discussion
about AOGCC. The subcommittee had not received answers and
wanted to ensure AOGCC was on track for what it had
promised.
Representative Stapp looked at line 8 pertaining to the
office of entrepreneurship. He believed it was in a piece
of legislation. He had no problem including things that the
legislature wanted to pass in bills to ensure there was
funding space in the operating budget. He assumed it was
the intent to try to pass the legislation. He asked if the
operating budget was accounting for a certain number of
bills the committee was looking to pass. Alternatively, he
asked if it was a unique line item.
Co-Chair Josephson stated that his understanding of the
question was whether everyone with legislation should seek
to add it in the budget. He stated probably not. He noted
that the conference committee would not double fund
something.
1:43:58 PM
Representative Galvin replied to the question by
Representative Hannan. She thought it was a good point that
the legislature may need to be inclusive of DNR's report as
well. She stated it was hard to know whether the market was
even present. Currently funds were being used for legal to
write regulations and another part being used for a
geologist. The questions at the subcommittee level were
about what was going on and that legislators thought that
by now, money would be coming in to pay for it. The
subcommittee had been told by the department that it was
not set up yet. She relayed that more than one department
may weigh in with a report on the status of the particular
program. Secondly, she clarified that the bill
Representative Stapp was referring to was different and
included a much higher number and different scope.
1:45:33 PM
Representative Stapp noted that the line item language was
"establish Office of Entrepreneurship." He believed HB 30
would create an office of entrepreneurship. He had not
looked at the fiscal note on the bill. He did not have
issues with the line item. He was trying to determine if
the committee was making sure there would be space in the
operating budget in the anticipation of bills that were
passed.
Co-Chair Josephson stated his understanding that in early
May, finance and conference committee legislators would get
a sense of legislation that was moving and what needed to
be funded in order to budget accordingly.
Representative Johnson stated there were two pieces, which
she thought was beyond the purview of the budget. She noted
that the item established a new office of entrepreneurship.
She highlighted that it was a policy piece. Additionally,
the recommendations added three full-time positions. She
read from a document that "the office will promote
innovation based economic development, new venture and job
creation in emerging sectors and facilitate engagement of
startups in the State of Alaska to increase the use of
local Alaska sources for goods and services." She remarked
that it was beyond the purview of the budget. She looked at
intent language specifying it was the intent of the
legislature that the office of entrepreneurship prepare and
submit a report to the co-chairs that would include a
comprehensive business plan with a timeline and update on
progress of standing up the office. She stressed that the
intent was far more than asking for a report on something a
department was already doing. She underscored that it gave
direction to a department that did not exist and put money
into establishing a department. She stated that the work
was a big policy lift. She thought it would result in a
substantial change in the budget process if the committee
began inserting policy and establishing things like the
Office of Entrepreneurship in the budget. She wondered if
it was constitutional.
Co-Chair Josephson replied that he was not terribly worried
about the constitutionality of the language. He offered to
hear from the Legislative Finance Division (LFD).
1:48:50 PM
Representative Johnson needed an answer before they voted
on the idea or accepted the recommendation.
Co-Chair Josephson noted they did not take votes on the
reports.
Representative Johnson believed it was a worthy question.
Co-Chair Josephson agreed.
ROB CARPENTER, DEPUTY DIRECTOR, LEGISLATIVE FINANCE
DIVISION, noted that he was not a lawyer. He stated that
the committee was making an appropriation for a purpose, in
the current case it was for an economic development office
of entrepreneurship. He stated there were appropriations
all of the time throughout the budget for policy purposes.
He believed the [separate] legislation had substantially
more details on what the office was supposed to do. It did
not prevent the legislature from making an appropriation,
it happened all of the time in the capital budget and
throughout the budget. The item was an appropriation to do
something, which in the current case was to create an
office within an existing part of the budget called
economic development.
Co-Chair Foster asked what would happen if the bill did not
pass and the money was still in the budget. I reasoned that
if there was no office, the money could not be used.
1:50:25 PM
Mr. Carpenter replied that he did not know the bill. The
item was appropriating money for a purpose the legislature
deemed relevant. He stated that the legislature did not
necessarily need statute; the legislature was appropriating
money that would be in the budget. He used an example of
making an appropriation to an agency in order to do
something the legislature would like to have done. He
considered a situation where the separate legislation
progressed that contained a fiscal note and there was
duplicative funding in the operating budget, LFD would be
on top of the issue and would inform the legislature that a
decrement was needed in the operating budget or that the
fiscal note should not be funded.
Co-Chair Foster stated his understanding that if the
separate legislation did not pass, there would be no office
and the money would likely lapse. He believed that if it
looked like the bill would not pass, the conference
committee would be aware and would likely not accept the
increment.
1:52:01 PM
Co-Chair Josephson noted that a Knowles decision in the
early 2000s had defined what was meant by an appropriation
item [Alaska Legislative Council v. Knowles 2001]. He
explained that it was defined as money and a purpose. He
stated that the item under discussion was money and a
purpose. He was inclined to ask for a legal opinion.
Representative Johnson stated her concern that the intent
language specified that the increment was to establish an
office. She stated that if the bill did not pass, the
budget would still include a line item to establish the
office and provide a description of what the new department
would do and jobs it would create. She would defer to
whatever the co-chair wanted to include, but she had been
given plenty of instruction that it was not something that
was allowed in the budget.
1:53:28 PM
Representative Stapp clarified that he did not have an
issue with entrepreneurship, he believed it was a good
idea. However, he was intrigued by the statement. He
considered that perhaps someone may want to establish an
office of spur line development and direct the legislature
to establish the office through intent language. He asked
if it would be considered an appropriation item as well.
Mr. Carpenter answered that the wording to establish an
office was adding confusion. He explained that the item was
appropriating money for three positions to perform a duty
related to entrepreneurship efforts.
Co-Chair Josephson asked Representative Galvin if there was
a request for an office of advocacy in one of the
departments she oversaw [in subcommittee].
Representative Galvin answered affirmatively. She would
report on that in a separate report for the Department of
Education and Early Development (DEED). The governor and
DEED had requested an Office of Advocacy. The request had
been to hire two employees for a purpose.
Co-Chair Josephson recognized there may be differences
based on a governor's executive order or decree and
legislative action.
1:56:01 PM
Representative Johnson stated there was not an office at
the moment and the bill [to establish an office of
entrepreneurship] may or may not go forward. She did not
have any problem with figuring out where double charging
was occurring. She explained that if the bill did not pass,
the committee was adding three positions to DCCED and it
was additional money the department could use to fund other
things. She did not know the legislature could give
specific direction through the budget to tell the
department how to spend the money. She stated that the
legislature could give the department some idea on how to
spend the money, but it seemed like they were just adding
money to the department. She asked if she was incorrect.
Co-Chair Josephson answered that the topic had come up in
the conversation the in the past couple of days. The
discussion had been that LFD and the legislature tracked
the items during the interim and at some point, word would
get around that the legislature funded a program that did
not exist. There was always a risk when the legislature
appropriated that the department could use money as it
wanted, particularly if it was an allocation that was not
walled off by an appropriation.
Representative Johnson understood how it worked but did not
know they legislature could set up new departments in the
budget. She was concerned that the action was just giving
money to the department. She did not want the legislature
to do its business by word getting around the building. She
liked to know what exactly was happening.
1:58:08 PM
Co-Chair Foster directed a question to Mr. Carpenter. He
stated his understanding that the item funded $577,000 to
provide funding for three positions to work on
entrepreneurial things. He remarked that DCCED had the
ability to bring positions on to work on a particular issue
even if there was not an office. He observed that the
subcommittee language specifically stated the funding was
to establish an office of entrepreneurship that would
include the three positions. He asked if DCCED could
establish its own office without a bill. He asked if
departments could create offices within their department
without needing a bill.
Mr. Carpenter stated his understanding that the legislature
was making an operating appropriation for an agency. There
were allocations/appropriations that represent the purpose
of the money. Under the current situation, it pertained to
the economic development allocation. He did not recall the
whether the funding was restricted to that area under the
appropriation structure. The intent of the appropriation
was for economic development. He explained that departments
had the executive privilege to use the money to establish
an office and hire people. He clarified that the money and
intent behind it drove what the department could do with
the funding. He stated that it was different if the
legislature wanted to take it further and set up statute
outlining specifically what the department was allowed to
do legally, which is what the bill would cover. The
legislature could also make an appropriation with intent
and guidelines around the appropriation. He highlighted a
capital project as an example where the legislature was
very specific that funding was required to be used for
resurfacing a bridge in Juneau versus an appropriation for
road work in Southeast Alaska. Depending on how specific
the appropriation was drove the department's ability to
spend the money.
Co-Chair Josephson relayed that he would seek a legal
opinion on the topic.
2:01:24 PM
^DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT
2:01:32 PM
LISA KELLER, STAFF, REPRESENTATIVE ALYSE GALVIN, reviewed
the subcommittee recommendations for the Department of
Education and Early Development (DEED)(copy on file).
The House Finance Budget Subcommittee for the
Department of Education and Early Development submits
the following recommended operating budget for FY26 to
the House Finance Committee.
RECOMMENDATIONS
Fund Source: (dollars are in thousands)
Unrestricted General Funds (UGF) $103,458.0
Designated General Funds (DGF) $33,463.1
Other Funds $38,757.3
Federal Funds $266,705.2
Total $442,383.6
Compared to the FY26 governor's amended budget
proposal, subcommittee recommendations represent an
increase of $1,550.0 (+1.5 percent) in UGF.
Positions:
Permanent Full-time 281
Permanent Part-time 13
Temporary 12
Total 306
BUDGET ACTIONS
The House Finance Budget Subcommittee for Department
of Education and Early Development reviewed the FY26
budget request and adopted all items and changed the
following:
A decrement of $1,000.0 from UGF to Alaska Native
Science and Engineering Program (ANSEP).
An increment of $1,000.0 in UGF for Alaska EXCEL.
An increment of $500.0 in UGF for Parents as Teachers.
An increment of $400.0 in UGF for Imagination Library.
An increment of $650.0 in UGF for Statewide Library
Electronic Doorway (SLED).
SUBCOMMITTEE RECOMMENDATION
The subcommittee is forwarding the following
recommendation for the full committee's consideration:
That the Public Library Assistance Grant Program be
maintained at $7.0 per service outlet for each
library. There are currently 82 outlets, at a total
cost of $574.0.
SUBCOMMITTEE AMENDMENTS
The chair set an amendment deadline and welcomed
amendments from all members. The subcommittee received
six amendments. Three amendments were withdrawn and
three amendments failed.
ATTACHED REPORT
The House Finance Budget Subcommittee for the
Department of Education and Early Development adopted
the attached report:
House Finance Department of Education and Early
Development Budget Action Report.
2:04:24 PM
Representative Hannan was confused by the subcommittee
recommendations on the library assistance grant. She asked
if it was included in the budget action items.
Ms. Keller replied that it was already in the budget and
there had been some problems the previous year where the
program felt threatened; therefore, the subcommittee chair
wanted to ensure the funding would be maintained. The
subcommittee had received assurances the increment would be
maintained.
Representative Hannan stated her understanding that the
subcommittee recommended full funding of the library grant
program again in FY 26. She asked for verification the
subcommittee recommendation was flagging the item to ensure
the full committee was aware of the item.
Ms. Keller replied affirmatively.
Co-Chair Foster realized that the amendment process would
be the time to debate the merits of increments and
decrements. He saw an increment for EXCEL for $1 million
and increments for Parents as Teachers, SLED, the
Imagination Library, the statewide library Electronic
Doorway. However, he observed there was a decrement for
Alaska Native Science and Engineering Program (ANSEP). He
knew the executive director had been in Juneau asking for
funds. He found the decrement surprising and wondered why
it had been included.
Ms. Keller replied that it had been a painful discussion.
She relayed that ANSEP was well loved. She detailed that
the program was in the base budget. She noted that EXCEL
was not in the base budget, and it was facing a loss of
federal funds. The program was struggling. The subcommittee
had learned that EXCEL served a lot more students and kids
without a minimum acceptance criterion. The subcommittee
was in strong support of ANSEP, but it had been a painful
decision to decrement a program in order to save another
one.
Co-Chair Foster asked for verification that the EXCEL
program targeted students who needed to be more challenged,
similar to a gifted and talented program.
2:07:58 PM
Ms. Keller clarified it was the opposite. She explained
that ANSEP was for gifted and talented students whereas
EXCEL involved many kids from rural areas who could live on
campus. She stated it was a very inspiring program to see.
She clarified that kids did not need to meet a minimum
criteria and targeted kids from rural areas who may need a
bit more help to get them placed correctly as they grew
older. She noted that some of the students went on to
vocational technician programs and some went on to college.
Co-Chair Foster asked if the primary focus of the EXCEL
program was for rural kids.
Ms. Keller replied affirmatively.
Representative Stapp stated that typically ANSEP funding
went to the University of Alaska Fairbanks and other public
entities. He asked if EXCEL programs were nonprofit based,
state based, or a combination.
Ms. Keller replied that the particular ANSEP program under
discussion was for high school students who were likely
heading for college. She did not know whether EXCEL was a
for-profit or nonprofit entity. She could follow up with
the information.
Representative Stapp clarified that he did not need to know
the details. He noted that the ANSEP program was through
public school. He wondered whether funding to the EXCEL
program was a public or private direction of money.
Ms. Keller deferred to Representative Galvin.
Representative Galvin answered that it was a nonprofit
serving 902 students the previous year. The program was
open to 7th to 12th graders and there was no specific
minimum GPA necessary.
2:11:10 PM
^DEPARTMENT OF HEALTH
2:11:23 PM
ERIN PAGE, STAFF, REPRESENTATIVE ANDY JOSEPHSON, reviewed
the subcommittee recommendations for the Department of
Health (DOH)(copy on file):
The House Finance Budget Subcommittee for the
Department of Health held a total of five meetings
consisting of department and division budget
presentations and discussions on the Governor's
proposed and amended budget. Based on those
considerations, the Subcommittee made some changes to
the Governor's operating budget items and added
several new items. The Subcommittee submits the
following recommended operating budget for FY26 to the
House Finance Committee:
RECOMMENDATIONS
Fund Source (dollars are in thousands)
Unrestricted General Funds (UGF) $1,076,026.3
Designated General Funds (DGF) $48,780.9
Other Funds $109,023.0
Federal Funds $2,602,272.9
Total $3,836,103.1
Compared to the FY26 Adjusted Base, the Subcommittee
recommendation represents an increase in Unrestricted
General Funds of $32,475.7 (3.2 percent) due to the
Governor's items and an increase of $33,665.0 (3.3
percent) related to the Subcommittee's items. The
combined UGF increase is $66,140.7 (6.5 percent). For
other funding sources, the Subcommittee recommendation
reflects a decrease of $6,162.1 (-11.2 percent) in
Designated General Funds, an increase of $11,143.7
(11.4%) in Other funds, and an increase of $253,600.9
(10.8%) in Federal funds. The increase across all fund
sources is $324,723.2 (9.2 percent).
POSITIONS
Permanent Full-Time (PFT) 1566
Permanent Part-Time (PPT) 2
Temporary 55
Total 1623
Compared to the FY26 Adjusted Base, the Subcommittee
recommendations represent an increase of 19 PFT
positions (1.2 percent) within the Department, all of
which are the result of items in the Governor's
Proposal. There are no changes in PPT or Temporary
positions.
BUDGET ACTIONS
The Subcommittee members reviewed the Governor's
proposed transactions in detail. After consideration,
the Subcommittee made changes to two of those
transactions. The Subcommittee added several new
transactions.
Highlights (dollars are in thousands):
The following two items in the Governor's proposal
were adjusted by the Subcommittee:
• Reversal of $250.0 UGF (GF/MH) decrement that
removed support for Aging & Disability Resource
Centers. This reversal funds the final year of a
temporary increment supporting aging and
disability resource centers. Restoring this
funding aligns with the recommendation of the
Mental Health Trust.
• Reversal of $45.0 UGF (GF/MH) decrement that
removed support for continued work on the State's
implementation and use of the National Core
Indicators, an effort among states to standardize
the collection of performance and outcome
measures for home and community-based services.
Restoring this funding aligns with the
recommendation of the Mental Health Trust.
The following items were added by the Subcommittee:
• $7,725.0 UGF increment to continue support for
child-care grant programs for place-based and
home-based childcare centers. This item
corresponds to several years of previous
temporary increments with a small adjustment for
inflation. It is intended to provide direct
operating grants through the Child Care Grant
Program, in the Child Care Program Office.
• $75.0 UGF one-time increment to support a safe
gun storage media campaign. This funding is
appropriated to the Division of Public Health in
its Chronic Disease Prevention and Health
Promotion allocation.
• $1,500.0 UGF increment to community grant funding
in Senior & Disabilities Services. This item is
intended to support adult day services and
respite care.
• $3,000.0 UGF increment to community grant funding
in Senior & Disabilities Services. This item is
intended to restore senior center services and
hours that have been cut due to insufficient
revenue.
• $2,700.0 UGF increment to account for the effects
of inflation on early intervention & infant
learning programs. This allocation has not been
adjusted since 2017.
• $1,100.0 UGF increment to support an increase in
the daily rate for temporary assisted living
facilities, as covered in the General Relief
allocation. This item is intended to be used by
the Department to increase the daily rate in
those facilities from just over $109.32 to $120.
• $500.0 UGF and $500.0 Federal Funds temporary
increment intended to support a rate increase for
private-duty nurses, who provide in-home care for
medically fragile patients who would otherwise
need to be hospitalized. This rate has not been
adjusted since 1998. The increase is temporary
because these services are expected to be rebased
in the next 2 to 4 years.
• $13,750.0 UGF temporary increment intended to
support provision of certain highly- utilized
clinic behavioral health services subject to the
upper payment limits of the Centers for Medicare
& Medicaid Services (CMS), such as individual
therapy, crisis services, and integrated mental
health and substance abuse disorder assessment.
The increase is temporary to facilitate re-
evaluation of these rates after re-basing occurs
in these and other behavioral health services.
SUBCOMMITTEE AMENDMENTS
The Chair set an amendment deadline and welcomed
amendments from all members. The chair received 48
amendments. The subcommittee adopted one amendment and
rejected eight amendments. Thirty-nine amendments were
not offered or withdrawn.
Adopted Amendment (dollars are in thousands):
• $3,020.0 UGF increment intended to expand grant
funding for early intervention services for
infants and toddlers with disabilities and their
families under Part C of the federal Individuals
with Disabilities Education Act (IDEA). This
funding is intended to extend service provision
to infants and toddlers with delays of 25 percent
or more in one developmental area. Because of
funding constraints, current service provision is
limited to infants and toddlers with delays of 50
percent or more.
ATTACHED REPORTS
The House Finance Budget Subcommittee for the
Department of Health adopted the attached Budget
Action Report for the Department of Health. This
report incorporates agency totals, transaction
comparisons for the FY26 Adjusted Base to the House
Subcommittee Proposal, and transaction comparisons for
the FY26 Governor's Amended Proposal to the House
Subcommittee Proposal.
2:18:57 PM
Representative Stapp looked at line 72 adding temporary
funding to increase rates. He observed the request was
accompanied by federal matching receipts. He asked if the
rate increase would take the reimbursement rate higher than
the upper payment limit allowed to provide the service.
Typically, it meant amending the state plan for Medicaid.
He elaborated that amending the reimbursement rate above
the upper payment limit it was an automatic denial from the
Centers for Medicare and Medicaid Services (CMS). He asked
if there had been consideration of putting the item in the
grants line instead of the Medicaid line. He asked if the
subcommittee had received clearance on the upper payment
limit with the department.
Ms. Page answered that to her knowledge it was not subject
to the upper payment limit. She stated it was an expected
Medicaid rate. She offered to look into whether there would
be any impact on the neutrality.
Representative Stapp believed it looked like the same line
item for Medicaid Services on line 73. He observed that
there was no federal match listed. He believed the service
would fall under the innovation/1115 waiver.
Ms. Page replied that it would not fall under the 1115
waiver. She clarified that the services to be funded were
explicitly outside the waiver and would not impact the cost
neutrality of the programs. She elaborated that the funding
would support items that went above rates that exceeded the
upper payment level supported by Medicaid. There would be
no federal match.
Co-Chair Josephson referenced line 72 and noted there had
not been a rate adjustment in 27 years. He relayed that his
office could follow up on whether there was any breach of
the upper payment limit.
Ms. Page added that the rate had been supported by the
Division of Health.
2:22:12 PM
Representative Tomaszewski observed that just over $33
million had been added to the DOH budget. He asked where
the money was coming from.
Co-Chair Josephson answered that it could come from new
revenue. He noted that the other body was entertaining new
revenue. The funding could also come from the
Constitutional Budget Reserve (CBR), or other cuts.
Representative Stapp looked at line 42 related to the safe
storage media campaign. He stated that the department had a
robust budget for marketing, which was in the millions. He
noted that $75,000 was not a large ask for funding a
marketing campaign, but he wondered whether there was a
reason to not use existing funds used by the department for
marketing. He asked if it was a messaging appropriation to
do a specific thing.
Co-Chair Josephson replied that officials at the
Municipality of Anchorage were looking at a similar program
and recommended between $50,000 to $100,000. The State of
Texas had a $500,000 campaign called Keep Them Safe. He
relayed that the subcommittee chose the middle number [of
the range] given by municipal officials.
2:24:25 PM
^DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
2:24:31 PM
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
reviewed the subcommittee recommendations for the
Department of Military and Veterans Affairs (DMVA)(copy on
file):
The House Finance Budget Subcommittee for the
Department of Military and Veterans Affairs submits
the following recommended operating budget for FY2026
to the House Finance Committee:
RECOMMENDATIONS:
Fund Source: (dollars are in thousands)
Unrestricted General Funds (UGF) $17,664,600
Designated General Funds (DGF) $28,500
Other Funds $13,951,200
Federal Funds $34 582 000
Total $66,226,300
The Unrestricted General Fund difference from FY26
Adjusted Base to the House Subcommittee budget
recommendation is a decrease of $359,000 of
Unrestricted General Funds, which is 2 percent below
the FY26 Adjusted Base.
Positions:
Permanent Full-time 282
Permanent Part-time 0
Temporary 3
Total 285
BUDGET ACTION:
The House Finance Budget Subcommittee for the
Department of Military and Veterans Affairs reviewed
the FY2026 Governor's budget request, including
amendments, and recommends the following actions:
• Accept the Department's transaction for Homeland
Security and Emergency Management. This includes
the following items:
• Replace $800.0 thousand of excess Federal
Authority with Interagency Receipts and Capital
Improvement Project Receipts.
• Approve the transaction for $200.0 thousand of
Interagency Receipts for State Active Duty for
Counterdrug Training, Outreach, and Education for
Drug Prevention.
• Approve the structure change creating a new
allocation for the Facilities Rent - Non-State
Owned to in accordance with Alaska Statute
37.07.020(e)
The Subcommittee took the following additional actions
in the Department of Military and Veterans Affairs
FY2026 Governor's budget request:
• Denied the following for Office of the
Commissioner:
o A new position and transfer authority for a
Program Manager to oversee the Alaska State
Defense Force.
o $175.0 thousand for expanding the operations
Alaska State Defense Force, Naval Militia,
and Civil Air
• Removed all funding for the Alaska State Defense
Force
o $359.5 thousand of Unrestricted General
Funds
o $40.7 thousand of Interagency Receipts
ATTACHED REPORTS:
The House Finance Budget Subcommittee for the
Department of Military and Veterans Affairs adopts the
attached report:
The House Finance Subcommittee for the Department of
Military and Veterans Affairs Budget Action Report
2:28:25 PM
Representative Stapp referenced the deletion of the State
Defense Force. He knew there was at least one former member
of the legislature who would be disappointed to see the
decrement because he was a member. He knew the defense
force had been active in disaster response across the
state. He asked if its deletion would impact the ability to
respond to emergencies.
Co-Chair Foster agreed. He stated that a lot of the work
[of the defense force] went to efforts for rural Alaska. He
had voted against the removal of the funding. He stated it
had been a bipartisan effort to remove the funding in order
to spend funding elsewhere.
Mr. Anderson added that the department agreed that early
disaster response could be impacted by the removal of the
Alaska State Defense Force. The department was on the
record during the subcommittee stating that early
deployment of assets on the ground could be impacted.
2:30:16 PM
Representative Tomaszewski asked for examples of some of
the things the defense force had recently responded to. He
thought that some people may not be familiar with the
entity's work.
Mr. Anderson replied that a recent example was the early
deployment in response to the Typhoon Merbok storm in
western Alaska [in 2022]. He elaborated that the defense
force had arrived earlier than all other deployments.
Additionally, anytime wildfires required roads to be
blocked off and traffic to be diverted the work was done by
the defense force in order for wildland and public safety
officers to be utilized for other portions of the response.
Co-Chair Schrage did not know a lot about the defense
force. He thought many of the duties being described
sounded like things that were typically handled by the
National Guard. He asked if the redundancy had been
discussed. He had recently heard anecdotal testimony that
in some of the recent deployments of the defense force that
local communities did not know who they were. He stated
there had been confusion over the work and who the defense
force was. He clarified he was not saying the defense force
did not do good work.
2:32:12 PM
Mr. Anderson confirmed that the conversation arose. He
addressed duplicity of services and agreed there were some
duplicative services; however, it also posed the question
about at what point national guardsmen were activated in
volunteer status. He relayed the department had testified
that early on it was easier to get the defense force
individuals out first followed by the National Guard.
Another issue pertained to the availability of the National
Guard for volunteer status. He explained that if for some
reason the National Guard was activated and deployed in
other areas [outside of Alaska], the defense force would be
the only response available [to issues in-state]. He stated
the department understood there was an optical issue with
some of the assumptions that could be made when the defense
force was deployed. He confirmed that anecdotally it was a
challenge, and he believed the department would try to
improve on it.
^DEPARTMENT OF CORRECTIONS
2:34:10 PM
HUNTER MEACHUM, STAFF, REPRESENTATIVE SARA HANNAN, reviewed
the subcommittee recommendations for the Department of
Corrections (DOC)(copy on file):
The House Finance Budget Subcommittee for the
Department of Corrections submits the following
recommended operating budget for FY26 to the House
Finance Committee:
RECOMMENDATIONS
Fund Source: (dollars are in thousands)
Unrestricted General Funds (UGF) $434,792.1
Designated General Funds (DGF) $13,980.6
Other Funds $28,725.3
Federal Funds $9,071.5
Total $486,569.5
Compared to the FY26 governor's amended budget
proposal, subcommittee recommendations represent an
increase of $567.5 (+0.1 percent) in Unrestricted
General Funds (UGF).
Positions:
Permanent Full-time 2,124
Permanent Part-time 0
Temporary 0
Total 2,124
BUDGET ACTION
The House Finance Budget Subcommittee for the
Department of Corrections reviewed the FY26 budget
request and adopted all items and added:
• An increase of $567.5 in UGF in the Population
Management Appropriation, Regional and Community
Jails Allocation to partially address the
shortfall for community jails.
Some budget items of note are: (dollars are in
thousands)
• $3,904.7 increase in UGF for supervisory standby
pay granted to supervisors by the Alaska Public
Employees Association Supervisory Union's
collective bargaining agreement.
• $249.0 increase in UGF for tablet program for
inmates.
• $195.0 increase in UGF to fully fund the
Dillingham jail.
Recommended Intent Language
I am forwarding the following pieces of intent
language for consideration:
• It is the intent of the legislature that the
Department of Corrections prepare a report to the
legislature that analyzes the possibility of
closing an institution and submit it to the Co-
chairs of the Finance Committees and the
Legislative Finance Division by December 20, 205.
The report should examine which institutions
would produce the most cost savings if they were
closed, estimate the long-term cost savings
associated with closing those institutions, and
what transition costs would be needed, including
capital costs.
• It is the intent of the legislature that the
Department of Corrections submit a report to the
Co-chairs of the finance committees and to the
Legislative Finance Division by December 20,
2025, which includes the following: the total
annual cost of operating each community jail that
delineates fixed and marginal costs, the average
utilization of each jail for state and local
inmates, and the amount that each community jail
received in fiscal year 2025. The report should
also include a proposed formula for the Community
Jail allocation that fully funds the fixed costs
of each community jail, and the marginal costs
associated with state inmates.
ATTACHED REPORT
The House Finance Budget Subcommittee for the
Department of Corrections adopted the attached
report:
House Finance Department of Corrections Budget
Action Report
2:38:11 PM
Co-Chair Josephson asked what was meant by marginal cost
[associated with inmates].
Ms. Meachum deferred the question to LFD.
CONNOR BELL, FISCAL ANALYST, LEGISLATIVE FINANCE DIVISION,
replied that regional community jails housed people
incarcerated on local and state charges. The marginal cost
was the fixed cost of running an institution as well as the
incremental cost for each person in the facility on state
charges versus local charges. The intent was not to
reimburse community jails for inmates housed on local
charges.
Co-Chair Josephson asked if the only communities with local
charges were Juneau and Anchorage.
Mr. Bell replied that he would follow up on the question.
Representative Hannan referenced whether a person was being
held on state or local charges. She believed there were 14
community jails and in her mind some of them did not have
the ability to do local charges that would hold a person in
jail; however, the phrase continued to come up. She relayed
that she was recommending the intent language but
understood the subcommittee did not have control over that.
She stated there had been substantial dialog on the topics
in subcommittee. She highlighted that the DOC budget had
grown substantially in recent years. There was a lot of
interest and talk about holding the cost down, but the
legal obligations the state had to people in its custody
were substantial in terms of conditions and services
provided. She remarked that the state could not merely shut
a jail without knowing what it would cost. She highlighted
there had been intent language included in the budget the
previous year, but it had been asked in a "yes or no" way;
therefore, the department had responded that it would not
save the state money to shut a jail. The intent language in
the current recommendation asked for more specifics in
order for the legislature to learn why the state would not
save any money by shutting an institution.
2:41:35 PM
Ms. Meacham clarified that the language was identical to
language in the prior year budget, but DOC did not answer
with a sufficient analysis.
Representative Hannan believed DOC would understand that
members of the subcommittee were not satisfied with the
department's short answer. The intent was to ask the
question again to receive details for the legislature to
understand the situation. She noted the flip side was the
legislature continued to hear that communities with
community jails were carrying a burden that the state had
an obligation to fund. She explained that if communities
shut their community jails the cost would be completely
borne by the state. She detailed that there had been a back
and forth conversation about the topic between the
legislature and the department in the past several years.
She stated there had been some resolution and a few of the
communities felt much more satisfied with the amount of
reimbursement; however, members of the subcommittee
continued to ask why there were different rates of
reimbursement. The subcommittee believed there were areas
that should have some more detailed evaluation and a single
year's finance ability to drill down on the topic was
limited.
2:43:08 PM
Representative Stapp reminded the committee that the LFD
director had talked to the committee about the prior year's
intent language, which appeared to match the current year's
intent language. He thought the department was
intentionally woefully out of compliance with the direction
it was given the previous year. He thought the committee
should consider what sort of action to take when a
department was willfully not obeying the directions it
received through the legislature. He asked if the
subcommittee had given any thought to the issue.
Representative Hannan stated that it was her understanding
that intent language in the budget was never binding on an
agency. She stated there had been a lot of discussion
between the subcommittee and department that the
legislature was not satisfied with the information provided
and that the subcommittee would reprise that. The
subcommittee had taken a field trip to Lemon Creek
Correctional Center the previous day. She explained it was
one of the facilities where the number of beds was vastly
different from the number of beds that were operational
because there was currently major renovation due to a
facility collapse security risk. The subcommittee had been
told there was one 20-bed unit with one person in it
because the individual was a maximum security female inmate
who had to be held separately from other females. She
furthered that if the goal was to save money overall, they
needed an understanding of the entire system. She did not
think it was a malicious intent of the department to defy
the legislature. She believed DOC felt so strapped with the
ongoing issues they faced that they thought the answer was
satisfactory. She believed the department now understood
that the answer was not satisfactory. She elaborated that
the Community and Regional Affairs Committee would continue
to look at the topic and she believed if there was not a
much better explanation and understanding to all members of
the legislature that the recommendation from the
subcommittee in one year's time would be vastly different.
^DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
2:46:51 PM
TIM CLARK, STAFF, REPRESENTATIVE SARA HANNAN, reviewed the
subcommittee recommendations for the Department of
Transportation and Public Facilities (DOT)(copy on file):
The House Finance Budget Subcommittee for the
Department of Transportation and Public Facilities
held a total of five meetings and submits the
following recommended department operating budget for
FY26 to the House Finance Committee.
Unrestricted General Funds $122,719.9
Designated General Funds $52,132.3
Other Funds $468,824.0
Federal Funds $5,599.9
Total $649,276.1
Compared to the FY26 Governor's Amended budget
proposal, the Subcommittee recommendations represent
an increase of $114.6 (0.1 percent) in Unrestricted
General Funds, for a total of $114.6 (0.0001765
percent) in all funds.
Positions: 2,334
Permanent Full-Time 2,334
Permanent Part-Time 223
Temporary 96
Total 2,653
BUDGET ACTIONS
The subcommittee adopted all of the governor's
proposed Budget Action items and added one item:
• Item 7: Adds One Vehicle Inspection Position at
Richardson Highway Northbound Weigh Station to
Expand Operational Hours.
• This added position requires an additional
appropriation of $114.6 in Unrestricted General
Funds.
Additional Budget Items of Note
• Item 6: This funds the development of a Dalton
Highway Safety Training program to equip
personnel with the necessary skills to manage
hazardous materials, perform accident response,
and maintain safety in the event of incidents
involving LNG and other heavy cargo being
transported along the highway. ($250.0 UGF One
Time Increment)
• Items 3, 10, 14, and 20: Across all regions of
the state, these items increase funding for
planners and engineers to monitor degradation
over time, prioritize projects, and make informed
funding decision that support the long-term
sustainability and safety of Alaska rural
airports. ($100.0 AirptRcpts Increment)
• Item 22: This funding change returns the $2.9
million cost of operating the Whittier Tunnel to
the federal government. The department was
successful in arguing that the Whittier Tunnel is
a necessary road for the Alaska Marine Highway
System, allowing for I 00 percent federal funds
participation for operations.
Mr. Clark elaborated on Item 22 and characterized it as a
win for DOT. He explained that the department was
successful in arguing that the Whittier Tunnel was a
necessary road for the Alaska Marine Highway System (AMHS),
allowing for 100 percent federal funds participation for
operations. He expounded that there was a two-year period
where the operational costs were shunted to the state.
Following an appeal, the federal government was resuming to
pick up the cost. He continued to review the subcommittee
recommendations.
• Items 23 through 29: These items transition the
Alaska Marine Highway System from a calendar-year
fiscal year to the July-through-June fiscal year,
with two-year (FY2026- FY2027) appropriations.
The multi-year structure would maintain the
planning advantages inherent in calendar-year
budgeting while eliminating the cost and
administrative burden of twice-per-year agency
closeouts of the budget.
SUBCOMMITTEE AMENDMENTS
The chair welcomed amendments from all members. One
was offered and debated and was not adopted.
RECOMMENDED INTENT LANGUAGE
The chair forwards the following intent language to
the Finance Committee for its consideration:
It is the intent of the legislature that the
Northern Region Director position shall be
filled. The position should be the sole job title
held by this individual within the Department of
Transportation and Public Facilities.
Explanation:
It is the subcommittee's understanding that the
responsibilities of the Northern Region Director are
now borne by an individual who is filling significant
multiple roles at the agency. The subcommittee
anticipates the duties of the Northern Region Director
will be more effectively fulfilled by someone not
already burdened with significant additional
responsibilities.
ATTACHED REPORT
The House Finance Budget Subcommittee for the
Department of Transportation and Public Facilities
forwards the attached report:
The House Finance Subcommittee for the Department of
Transportation and Public Facilities Budget Action
Report
2:52:16 PM
Representative Stapp supported the intent language and
thought it was sad the legislature had to tell the
department to fill a director position. He asked about item
7 pertaining to an additional position for the Richardson
Highway Northbound Weigh Station. He stated it was located
across the street from his house. He did not know why
another person at the specific weigh station was needed. He
asked what the subcommittee discussion had been on the
topic.
Mr. Clark replied that the weigh station was currently
short staffed. He detailed that other weigh stations in the
region could be open from 14 to 16 hours per day or longer
whereas the Richardson station was only currently open
about 8 hours per day. The hope was that additional
staffing would mean the weigh station could increase its
operational hours and cover more vehicles.
Representative Stapp remarked that there were also weigh
stations located in Tok and Fox and the odds of not
weighing at some point along the route were very slim. He
asked if the department had requested an additional
position or if it had been added by the subcommittee.
Mr. Clark replied that the amendment came from a member of
the subcommittee with close knowledge of the situation.
2:54:29 PM
Co-Chair Foster stated his understanding that Item 7 was
different than the governor's proposal. He looked at the
additional budget items of note included in the above
narrative and assumed the items had all been included in
the governor's budget.
Mr. Clark agreed.
Co-Chair Foster looked at Item 22 and believed the $2.9
million in state UGF would be replaced with federal
funding.
Mr. Clark replied it was also his understanding. He would
defer to LFD if the answer was different.
2:55:49 PM
Co-Chair Josephson confirmed the committee was receiving
indication from LFD that Mr. Clark's answer was correct.
Representative Bynum asked who had provided the intent
language in the report.
Co-Chair Josephson asked if he was talking about the DOT
subcommittee report.
Representative Bynum replied affirmatively.
Mr. Clark replied that the intent language originated with
Representative Ashley Carrick.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson reviewed the schedule for the following
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 53 Op Budget SubC Closeout Reports 030725.pdf |
HFIN 3/7/2025 1:30:00 PM |
HB 53 |