Legislature(2025 - 2026)ADAMS 519
03/26/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Amendments | |
| 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 | |
| += | HB 56 | 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."
^AMENDMENTS
1:37:37 PM
Co-Chair Josephson WITHDREW the motion to adopt Amendment L
4 [see minutes from 3/25/25 at 1:30 p.m. for detail].
1:37:54 PM
Co-Chair Schrage MOVED to ADOPT Amendment N 14 (copy on
file):
Agency: Various
Appropriation: Various
Allocation: Executive Branch
Transaction Details
Title: Delete funding for all UGF Governor amendments
Section: Section 1
Type: Dec
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: -85,056.6
-85,056.6
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund -85,056.6
Explanation
Returning the budget to reflect the Adjusted Base in
UGF by removing all Governor UGF increments.
Representative Stapp OBJECTED.
Representative Stapp asked for clarification on Amendment
L 4. He remarked that the amendment was a substantial
language amendment and he understood that the intention was
for the committee to move forward to discuss numbers
amendments. He asked if Amendment L 4 would be reconsidered
before or after the rest of the language amendments had
been considered.
Co-Chair Josephson responded that he planned to return to
Amendment L 4 and the other language amendments that sought
to amend Amendment L 4 after the committee considered
Amendment N 14.
Co-Chair Schrage explained that Amendment N 14 deleted all
funding for all unrestricted general fund (UGF) governor
amendments in the budget. He stated that it was a rather
painful amendment for him to offer given the size of the
decrement. He stated that he had looked at the stack of 96
amendments that had been offered in the committee and he
observed that there was clearly an appetite from the
committee to make significant reductions to the budget. He
stated that there had been discussion in the committee and
elsewhere about the need for the state to live within its
means and to not unsustainably draw from savings. He stated
that he had noticed a lack of willingness to discuss
alternative ways to fund the budget.
Co-Chair Schrage stated that the amendment allowed the
committee to make some progress in "right-sizing" the
budget and it would allow members to prioritize the most
important items for the government to focus on in the
budget, including the education of children. He remarked
that the committee was aware that the Base Student
Allocation (BSA) bill [HB 69] had been passed out of the
House and was currently moving its way through the Senate.
The amendment allowed the committee to ensure that Alaskans
who were in need and who were supported by the Permanent
Fund Dividend (PFD) were able to receive a meaningful and
sustainable check.
Co-Chair Schrage stressed that it pained him to offer the
amendment because it would mean that there would be
substantial reductions in the legislature's ability to
serve people throughout the state. He reiterated that he
had offered the amendment because the committee seemed to
have a strong interest in making reductions to the budget,
especially in light of the revenue forecast that had come
out a couple of weeks prior. He stated that the amendment
was an unallocated cut that would demonstrate to the
administration that the state should return to the budget
totals that were passed by the legislature in 2024.
1:41:31 PM
Representative Stapp relayed that the way he read the
amendment, it deleted all UGF for governor amendments. He
understood that Co-Chair Schrage's explanation indicated a
return to the prior year's budget to reflect the adjusted
base in UGF by removing all government increments. He
thought that it did not appear to be an unallocated cut. He
asked if Co-Chair Schrage could list the itemization of
what the effect of the amendment would be.
Co-Chair Schrage requested that Legislative Finance
Division (LFD) staff come forward and address the question.
1:42:28 PM
CAROLINE HAMP, STAFF, REPRESENTATIVE CALVIN SCHRAGE, stated
that she had recently given Co-Chair Schrage a list of all
the items that were in the governor's amendments in UGF.
She relayed that she could go through the list if it was
the will of the committee.
1:42:54 PM
AT EASE
1:43:43 PM
RECONVENED
Co-Chair Josephson recognized that Representative Elexie
Moore was present.
Co-Chair Schrage apologized for the confusion and noted
that he had skipped a step in the process. He stated that
when he had originally requested the amendment to be
drafted, it was his intent for it to be an unallocated cut.
He agreed that the amendment was somewhat ambiguous as it
was currently written. He stated that he would move a
conceptual amendment to address the problem and fulfill the
original intent of the cut being unallocated, which would
allow the administration the discretion he intended to
provide.
Co-Chair Schrage MOVED to ADOPT conceptual Amendment 1 to
Amendment N 14 (copy on file):
DEPARTMENT: Executive Branch-Wide Unallocated
Appropriation
APPROPRIATION: Executive Branch-Wide Unallocated
Appropriation
ALLOCATION: Branch-Wide Unallocated
DELETE: $78,586.2 UGF (1004)
ADD INTENT LANGUAGE: It is the intent of the
legislature that the unallocated reduction be
implemented in a manner that results in a minimum
number of state employee layoffs and that it is geared
toward finding internal agency and department
efficiencies. It is the intent of the legislature that
no supplemental funding be requested during the next
regular session to fill the unallocated reduction.
EXPLANATION: The reduction reflected in this amendment
is the sum of Unrestricted General Funds in Governor
amendments from his December 2024 proposed budget and
subsequent FY26 amendments. The calculation does not
include General Fund/ Mental Health (GF/MH) funding,
increments that were removed or modified in HCS 1, or
increments in the Judiciary Agency. It does include
new temporary increments (IncT's and IncM's) above the
Adjusted Base.
Representative Stapp OBJECTED.
Co-Chair Schrage requested an at ease to distribute copies
of the amendment.
1:44:29 PM
AT EASE
1:46:16 PM
RECONVENED
Co-Chair Schrage explained that conceptual Amendment 1 to
Amendment N 14 added intent language. He read the intent
language from the conceptual amendment (copy on file).
Representative Stapp MAINTAINED the OBJECTION to the
conceptual amendment. He thought that there was a vast
material difference between the amount of money in the
conceptual amendment and the underlying amendment. He
preferred the underlying amendment because it allowed the
committee to inform the public of the specific items being
cut, which he believed was the proper approach. He relayed
that he was not certain an unallocated cut could be made
without specifying the details. He noted that a similar
approach had been deemed unacceptable in the previous year
because it was the responsibility of the appropriating body
to detail the specific cuts. He asked what accounted for
the $9 million UGF difference.
Co-Chair Schrage responded that the explanation section of
the conceptual amendment stated that the calculation did
not include general fund mental health funding, which were
increments that were removed or modified. He explained that
the calculation included new temporary increments above the
adjusted base, which accounted for the difference in the
amount.
Representative Galvin commented that the amendment was a
lot to digest but she understood that big changes needed to
be made. She believed there were many good elements in
government and that the governor had likely requested many
positive items across various departments. She relayed that
she valued good government and the opportunities it
provided to grow the economy. She thought that communities
were stronger and projected greater stability when they
functioned efficiently. However, she stressed that it was
important to support the children of the state, whether
through a PFD that assisted vulnerable families or through
school funding. The amendment was difficult for her to
support but she would stand behind it.
Representative Allard relayed that she would like Co-Chair
Schrage to discuss the impact of the amendment on the
following departments: the Department of Administration
(DOA), the Department of Commerce, Community and Economic
Development (DCCED), the Department of Corrections (DOC),
the Department of Education and Early Development (DEED),
the Department of Environmental Conservation (DEC), the
Department of Family and Community Services (DFCS), the
Department of Fish and Game (DFG), the Department of Health
(DOH), the Department of Labor and Workforce Development
(DLWD), the Department of Law (DOL), the Department of
Military and Veterans Affairs (DMVA), the Department of
Natural Resources (DNR), the Department of Public Safety
(DPS), the Department of Revenue (DOR), the Department of
Transportation and Public Facilities (DOT), the University
of Alaska (UA), and the Alaska Court System (ACS). She
requested that Co-Chair Schrage provide more detail on the
reasoning behind the cuts and what the cuts entailed.
1:51:35 PM
AT EASE
1:52:07 PM
RECONVENED
Co-Chair Josephson shared that he appreciated
Representative Allard's question, but the committee was
considering an amendment to an amendment.
Co-Chair Schrage replied that it would take a considerable
amount of time to go through each of the governor's
increments in detail. The legislature needed to pass a
budget on a tight schedule, which was why the amendment to
the amendment provided flexibility to the administration.
The approach allowed the governor to determine where cuts
should be made and preserve funding for higher-priority
items while recognizing that resources were scarce. He
stated that departments should operate within the funds
they had in the previous year's budget.
Representative Allard commented that she agreed with
portions of Co-Chair Schrage's remarks but thought it was
important to fully discuss the proposed cuts now rather
than delay the discussion. She stated that further
postponement would take more time, especially if the
legislature went into a special session. She believed that
avoiding the details at the current stage in the budget
cycle was not transparent and was effectively pushing the
matter off without public discussion.
Representative Johnson stated that she found the situation
puzzling. She described the budget as "cobbled together and
engineered for failure." She thought that the amendment
appeared to be an unallocated reduction of the total
additions and was consisting entirely of UGF. She did not
think the cut was large enough to balance the budget. She
planned to introduce an amendment to cut all of the
subcommittee additions, which she thought would be an
appropriate follow-up to the amendment. She clarified that
she would vote in favor of the amendment, but she hoped
there would be larger reductions that would balance the
budget. She requested a legal opinion on how the
unallocated cuts would be incorporated into the budget and
how the reductions would be distributed.
Co-Chair Josephson noted that an attorney was not currently
present to provide a legal opinion. He suggested that Mr.
Alexei Painter respond instead.
1:56:36 PM
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that he could not engage in legal discussion but
could address the practicality of the amendment. He noted
that when a branch-wide unallocated cut had been
implemented in the past, it was specific to the executive
branch and could not be applied to the judicial branch or
legislative branch. He stated that the Office of Management
and Budget (OMB) would have to determine where to spread
the negative amount. He added that the legal question that
arose concerned the power of appropriation, which would be
best answered by an attorney. He explained that the
reduction would be left to the discretion of the governor's
office or OMB.
Co-Chair Josephson asked whether the underlying amendment
would restrict the administration within each agency or if
it could find the reductions in different departments. For
example, the amendment called for $85 million in cuts,
excluding the amounts mentioned in the intent language,
with a specific example of $2.162 million in DOA. He asked
if the administration could take the amount from another
department to meet the goal or if it would be required to
take the amount from DOA.
Mr. Painter responded that the underlying amendment was
ambiguous because it listed out the agencies, and it was
unclear whether there would be a new designation of
"executive branch-wide unallocated" or an actual allocation
to departments. He explained that the conceptual amendment
clarified that it was one unallocated "bucket." He noted
that if LFD was instructed to write budget legislation that
included the underlying Amendment N 14, the division would
need to make assumptions, which it preferred to avoid. He
stated that LFD's preference was for the committee to
clarify on the record what was intended in the underlying
amendment compared to the conceptual amendment because the
current language was ambiguous.
Representative Tomaszewski asked who was going to "clean up
the chaos." He commented that the amendment would place
significant pressure on each agency. He characterized the
situation as a "well-oiled disaster" and questioned whether
it would resemble "roughhouse boxing" in determining how to
meet the required amounts. He asked who would make the cuts
and expressed disbelief at the level of strain that would
be placed on the agencies to decide which entity would
absorb which reductions. He asserted that the situation was
unusual and difficult to understand.
Co-Chair Josephson noted that Ms. Marie Marx from
Legislative Legal Services (LLS) was on the line and
available for questions.
Co-Chair Foster expressed support for Amendment N 14. The
amendment would cut $78 million and it was fiscally
conservative. He addressed the question of how the
reduction would affect each department, noting that the
committee had spent January, February, and March hearing
from every department on their budget increments. He
expressed satisfaction with the explanations received and
stated that the governor would ultimately determine where
the cuts would be made. He reiterated that it was a $78
million cut and he supported the amendment.
Co-Chair Josephson asked for confirmation that
Representative Johnson wanted to hear from Ms. Marx.
Representative Johnson responded in the affirmative. She
asked if she should move a conceptual amendment to remove
the subcommittee additions before or after the vote.
2:01:18 PM
AT EASE
2:01:59 PM
RECONVENED
Co-Chair Josephson explained that the committee would need
to address the first conceptual amendment before moving a
second conceptual amendment. He asked Representative
Johnson to repeat her question to Ms. Marx.
Representative Johnson asked how the executive branch would
determine and implement the cuts, and what duties the
executive branch would be responsible for in the process of
making the reductions. She asked how an unallocated cut
would be distributed throughout a department and if it
would be legal.
MARIE MARX, LEGAL COUNSEL, LEGISLATIVE LEGAL SERVICES (via
teleconference), responded that the amendment was somewhat
unclear. She understood that the amendment would delegate
the appropriation power of the legislature to make
unallocated cuts to the governor. She noted that the power
belonged solely to the legislature and could only be
exercised by the legislature. She emphasized that if the
legislature failed to provide the executive branch with
sufficient guidance in making the cuts, it would be
allowing the governor to act with a legislative
appropriation power, which was unconstitutional. She
clarified that the state constitution provided that the
legislature appropriated the money and enacted the laws,
while the executive branch executed the laws. She
acknowledged Representative Johnson's second question and
stated that the method of implementation was more of a
practical matter than a legal one and should be addressed
by LFD.
2:05:13 PM
Representative Allard asked if granting the executive
branch appropriation power and allowing negotiations to
happen later would be completely unconstitutional.
Co-Chair Josephson remarked that the committee could debate
whether there was a difference between describing something
as twice unconstitutional or completely unconstitutional,
but there was no difference in his opinion. He believed Ms.
Marx's comments were not about negotiation with the
governor, but about directing the governor to determine the
specifics independently. He explained that even though
there was a negative appropriation, making the
appropriation was still a form of legislative power, and
the legislature could not delegate that authority.
Representative Allard responded that she had never seen a
finance committee cut everything the governor had requested
in such a large amount, then direct the executive branch to
determine the details and return to the legislature. She
understood that Co-Chair Schrage had indicated that the
governor could identify priorities and return to the
legislature with recommendations. She stressed that the
responsibility of appropriation belonged to the
legislature. She advised the committee to address the issue
immediately. She asked for an explanation of each proposed
cut and the reasons for the cuts. She asserted that the
issue was not directly tied to the original amendment
because of the magnitude of the reduction.
Co-Chair Foster relayed that he was curious about the
possibility of the legislature ceding its appropriation
power to the executive branch, which he understood to be a
constitutional issue. He asked whether there had been any
court decisions on the matter and how much guidance the
legislature would need to provide to meet the
constitutional threshold. He asked for clarification on
whether there had been any precedent set in court cases.
Ms. Marx responded that the case most often cited was the
State v. Fairbanks North Star Borough (FNSB) case, in which
the Alaska Supreme Court (ASC) examined the implementation
of a statute that permitted the governor to reduce
appropriations.
Co-Chair Foster interjected and asked Ms. Marx to slow
down. He indicated that all he had heard was that the case
involved FNSB and that he had missed the rest.
Ms. Marx confirmed that the case was State v. FNSB. She
stated that it was often cited to demonstrate that the
legislature needed to articulate some principles to guide
the executive branch. She explained that the exact
parameters of the requirement had not been fully developed
in case law in Alaska. She added that if an amendment
turned the matter over to the executive branch without
guidance, the situation would be similar to the issue in
the FNSB case where there was no guidance on how cuts
should be distributed. She stressed that the case was found
the situation to be unconstitutional.
2:10:15 PM
Co-Chair Foster asked if a conceptual amendment specifying
that the reduction would apply only to the increments the
governor had made over the prior year's budget would
provide enough direction.
Ms. Marx responded that there was no definitive answer in
case law. She speculated that the hypothetical conceptual
amendment specifying reductions only to the increments the
governor made over the previous year's budget would provide
more guidance. She thought that such guidance would make it
more likely that a court would uphold the amendment if
challenged, unlike the precedent in the cited case. She
noted that the issue in the court case was similar because
it involved a statute and unallocated reductions. She
reiterated that it would be more likely to be upheld by a
court if the legislature provided guidance, such as
indicating specific reductions the governor should make.
Co-Chair Josephson asked Ms. Marx whether providing a
specific dollar amount in the amendment would require an
explanation of what items constituted the dollar amount,
such as a $32 million cut proposed for DOH.
Ms. Marx responded that reductions were typically made in
the budget's numbers section by appropriation allocation.
She recommended providing guidance similar to what had been
done in past years when reducing budget items, specifically
in the numbers section. She added that providing a high
level of guidance would reduce legal risk and the more
guidance provided, the less risk there would be that a
court would find the reduction unconstitutional.
Representative Hannan shared her understanding that
specific guidance with a dollar amount would meet the legal
requirement.
2:13:06 PM
Co-Chair Schrage thought that it seemed ambiguous whether
the amendment was legal. He noted that unallocated cuts
were not legal unless guidance was provided, but there was
some guidance included in the amendment. He relayed that
the more guidance provided, the more legally sound the
amendment would be. The committee faced multiple
constitutional obligations, including passing a balanced
budget, and current budget still included a full PFD. He
emphasized the need to reconcile the budget. He did not
think the committee would be able to pass a
constitutionally valid budget without implementing the
proposed decrement. The situation was dire due to falling
oil prices and reduced state revenue, which meant that
severe reductions were necessary. He asserted that the
amendment provided the administration maximum flexibility
to find inefficiencies department by department and to
continue to provide services under constrained revenue
conditions. He asked if Ms. Marx or LFD knew if there was
precedent for the approach in the amendment. He thought the
approach was necessary and believed it would withstand
scrutiny.
Co-Chair Josephson suggested that Mr. Painter respond
first. He clarified that information about case law
precedence had already been provided, but that Co-Chair
Schrage was asking about historic precedence.
Mr. Painter responded that he did have the information
readily available. He noted that there had been a year
within the last decade when the legislature enacted an
unallocated reduction, though it was not as large as the
current one. He recalled that the intent language in the
amendment mirrored language included in a budget around FY
16 or FY 17, though the language did not ultimately pass.
He noted that there was some precedent, but he could not
recall exact amounts or years without further research.
Representative Stapp explained that when he heard terms
like maximum flexibility, he thought it suggested less
guidance on the unallocated cut. He asked what prevented
the executive branch from cutting the entire $78 million
from the foundation formula for education.
Ms. Marx responded that the governor's veto power was a
separate constitutional authority that was distinct from
the legislature's appropriation and lawmaking powers. She
added that nothing in the bill affected the governor's veto
power.
2:17:37 PM
Representative Stapp relayed that he was concerned that the
conceptual amendment effectively delegated legislative
responsibility by instructing the governor to make cuts. He
questioned again whether the governor could apply the
entire $78 million cut to education funding under an
unallocated cut.
Ms. Marx responded that the amendment's guidance to the
governor remained unclear. She explained that if the
legislature specified the sources of reductions, it would
not constitute an unallocated reduction. However,
delegating the decision to the governor raised
constitutional issues. She clarified that permitting the
governor to make cuts within the total allocation would be
a true unallocated reduction.
Representative Stapp asked Ms. Marx whether reverting to
the underlying amendment with detailed agency-specific cuts
would provide better guidance.
Ms. Marx replied that it was a policy decision for the
legislature. She explained that her role was to advise on
constitutional implications and risks. She affirmed that
offering clear direction on cuts would mitigate
constitutional risk.
Co-Chair Josephson asked if Amendment N 14 contained
adequate detail to avoid an improper delegation challenge.
Ms. Marx responded that the level of detail lessened
constitutional risk but court precedent did not clearly
define sufficient guidance. She added that past budgets
provided direction at the department, appropriation, and
allocation levels. She suggested that LFD could provide
additional detail.
2:21:10 PM
Representative Allard asked if Co-Chair Schrage intended to
cut the subcommittee add of $41 million.
Co-Chair Schrage responded that the cut was not in the
current amendment but it could arise in a future amendment.
Representative Johnson expressed appreciation for the
creative approach to budgeting and fiscal responsibility,
but she remained uncertain whether the amendment would
achieve its goals. She was leaning toward supporting the
amendment, but was concerned about its constitutionality.
She asked if voting to approve the amendment would mean
denying salary contracts.
Mr. Painter responded that the amount cut by the amendment
was based on increments that excluded salary adjustments.
He explained that funding for salary adjustments would
remain in the budget and adopting the amendment would not
deny salary contracts.
Representative Bynum asked for clarification on whether the
$85 million cut would provide the governor or departments
full discretion to allocate reductions across department
lines, or if reductions were limited to specific amounts by
department. He sought a clearer understanding of the
amendment's practical impact.
2:24:21 PM
Mr. Painter replied that the underlying amendment was
ambiguous. He clarified that the conceptual amendment to
create a single unallocated appropriation would be
applicable to all executive branch agencies. Without the
conceptual amendment, it was unclear whether multiple
unallocated appropriations by agency were intended. He
recommended either adopting the conceptual amendment or
clarifying how the appropriation bill should be structured.
Representative Bynum noted that the final portion of the
amendment's intent language stated that no supplemental
funding should be requested during the next regular session
to fill unallocated reductions. He asked how the intent
language would apply in practice. He acknowledged that
intent language was not legally binding. He reiterated that
he would like clarification on the practical effect of the
language.
Co-Chair Schrage responded it was his understanding that
the language served to discourage spending beyond the
approved amount with the expectation of returning for
supplemental appropriations. He added that it required
curtailing spending to fulfill the reductions outlined in
the underlying amendment and that the budget should reflect
the reductions.
Representative Allard asserted that the amendment was a
representation of the legislature being lazy. She
emphasized that it was the legislature's responsibility to
break down the budget to the best of its ability. She had
not received an answer regarding the specifics of what Co-
Chair Schrage intended to cut. She insisted that providing
such transparency was the committee's duty.
Co-Chair Schrage responded that while he would have
preferred to go through the budget line by line, he
acknowledged the reality of time constraints. He mentioned
that there was already discussion about a special session.
He noted that public sentiment strongly opposed special
sessions and desired the legislature to complete its work
within the standard 121-day session. The fiscal reality was
challenging due to a lowered revenue forecast not only for
the current fiscal year but also for the following year. He
stated that the amendment effectively instructed the
governor to "get it done" by finding areas for government
cuts to achieve a smaller, more efficient government within
available revenues. He acknowledged that the approach might
not be the most precise but argued that it gave the
governor discretion to use his knowledge and experience
with departments to make targeted cuts. He admitted that
the process would not be easy but insisted that living
within fiscal constraints required such measures. He
reiterated his intent to give the governor the tools needed
to complete the work promptly and responsibly.
2:28:39 PM
Representative Johnson suggested facetiously that the
legislature should simply skip its responsibility, avoid a
Constitutional Budget Reserve (CBR) vote, and delegate all
authority to the governor, who might resort to impoundment.
She declared she was unwilling to relinquish the
legislature's responsibility and affirmed her commitment to
continuing the legislative process.
Representative Allard clarified that she had not meant to
imply that there should be a special session. She hoped to
resolve the issues during the current session to avoid a
special session. She thought that no one wanted there to be
a special session and stressed that the specific cuts in
the amendment needed to be transparent. She remarked that
the public still lacked information about the cuts and the
committee should provide clarity. She suggested that Co-
Chair Schrage was avoiding the question.
Co-Chair Josephson noted that the plan was that the
committee would take a brief at ease shortly. He understood
that Ms. Marx had twice indicated the amendment was
unconstitutional, but she also seemed to suggest that the
second page of the amendment might offer sufficient
guidance to withstand a legal challenge. He asked Ms. Marx
to clarify her position on the amendment. He acknowledged
that she could only rely on the FNSB case for legal
guidance.
Ms. Marx responded that forming a legal opinion was
difficult without seeing the precise language of the
amendment. She added that to the extent the amendment
included the term "unallocated," it likely leaned toward
being unconstitutional. However, if the amendment simply
made reductions in specific appropriations and allocations,
it would probably provide enough guidance to withstand a
legal challenge. She reiterated that it would be difficult
to provide a definitive opinion without seeing the actual
language of the amendment.
Co-Chair Josephson noted that the language provided
appeared to be intent or summary language rather than the
actual budget numbers.
Ms. Marx agreed and explained that the language might
appear differently in the numbers section.
Representative Bynum asked for clarification on whether a
sequestration applying a specific percentage cut evenly
across all budget line items would differ constitutionally
from an unallocated cut. He asked if a percentage cut such
as 1 percent or 2 percent applied across non-formula funds
or general fund matches would be considered allocated. He
wondered if a specific cut would avoid the constitutional
issue of delegating authority.
Ms. Marx responded that the problem of constitutionality
would remain even with a percentage reduction. The
legislature would still be delegating significant decision-
making authority if it were to instruct the governor to
reduce the budget by a certain percentage and leave the
decision of where the cuts occurred to the governor. She
explained that the more guidance given to the governor, the
less constitutional risk there would be. She clarified that
a percentage cut still involved delegating many decisions
and would not substantially reduce the constitutional
concerns.
Representative Bynum asked if a 1 percent cut line by line
across the budget would be considered allocated or if it
would still be an unconstitutional delegation.
2:34:33 PM
Ms. Marx replied she did not know how a court would rule.
She explained that specifying a percentage cut with a
corresponding dollar amount for each line item decreased
constitutional risk significantly because it gave more
direction to the governor.
Co-Chair Josephson asked Mr. Painter if the state would be
unable to claim matching funds from the federal government
if the cut affected federal matches.
Mr. Painter replied that it would be impossible to predict
without knowing which reductions would be made. He noted
that Medicaid had the largest increment in the budget and
that its federal matching rate was approximately 60 to 70
percent. If the governor chose to reduce Medicaid funding,
the state could lose proportional federal matching funds,
potentially pushing costs to future years. Reductions in
other areas would have different impacts depending on the
funding source. He reiterated that it would be impossible
to know what the impact on other fund sources would be.
Representative Stapp asked if it mattered legally or
practically if the committee made one large unallocated cut
totaling the full $1.9 billion deficit instead of the
current $78 million. He wondered if the committee could
simply approve one large cut and finish its business for
the year.
Mr. Painter responded that he was not an attorney and could
not answer legal questions. He explained that from a
practical standpoint, the UGF in the numbers section
totaled about $3.3 billion, with the rest reflected in the
language section. He noted that there was no UGF in the
numbers section for the K-12 formula and he was uncertain
whether an unallocated cut could be placed in the numbers
section with offsetting language. He expressed doubt that
such an approach could be taken but noted that a $1.1
billion cut would amount to roughly one-third of agency
operations. He was unsure how the administration would
achieve such a large reduction from a practical standpoint.
Co-Chair Josephson noted that there was a $32 million cut
to the adjusted base for DOH, which was a substantial
amount of federal dollars. He asked if his understanding
was correct.
Mr. Painter responded in the affirmative. The largest of
the items in DOH was Medicaid, which included $19.6 million
in UGF. He estimated the federal matching rate to be in the
60 to 70 percent range. He explained that any reduction in
Medicaid funding would reduce federal matching dollars.
However, it was unclear if expenditures could actually be
reduced or only delayed because Medicaid was a formula
program. He suggested that there could be issues with
implementation.
2:38:56 PM
AT EASE
3:17:49 PM
RECONVENED
Co-Chair Josephson recognized that Representative Bill Elam
and Representative Justin Ruffridge were in the audience.
He stated that conceptual Amendment 1 to Amendment N 14 was
before the committee. He asked Co-Chair Schrage what he
wished to do.
Co-Chair Schrage stated that conceptual Amendment 1 to
Amendment N 14 had been intended to provide the
administration with additional flexibility in addressing
the cut outlined in the underlying amendment. After hearing
the discussion, he believed the conceptual amendment had
reduced some of the support for the underlying amendment.
Co-Chair Schrage WITHDREW conceptual Amendment 1 to
Amendment N 14.
Representative Stapp OBJECTED.
Representative Johnson OBJECTED.
Representative Johnson stated that she objected because she
did not believe that support had decreased. She remarked
that withdrawing the amendment due to decreased support was
not a compelling reason. She suggested that withdrawing it
on constitutional grounds would be a different matter. She
confirmed that she would vote in favor of the amendment
because she wanted to make cuts to the budget and wanted it
on the record that her support had not diminished. She
emphasized that the withdrawal should not be based on a
belief that there were too many opposing votes amongst
members. She clarified that she would not be voting against
the amendment and expressed her support for the budget cut
effort.
3:19:54 PM
Representative Allard stated that she did not want Co-Chair
Schrage to think she was not a "fiscal hawk." She thought
that the amendment was a significant cost-cutting measure
and she supported it.
Representative Bynum asked Co-Chair Schrage how the
withdrawal of the conceptual amendment would ultimately
impact Amendment N 14 as a whole, and how the committee
would proceed.
Co-Chair Schrage responded that his intention was to ensure
that the decrement moved forward. He stated that if the
committee wished to adopt conceptual Amendment 1, he would
welcome its adoption.
Representative Stapp expressed his appreciation to Co-Chair
Schrage for bringing forward the conceptual amendment. He
understood that there was trust in the governor to make the
cuts, and the committee should proceed accordingly if it
intended to pass the responsibility to the governor.
3:21:24 PM
AT EASE
3:23:19 PM
RECONVENED
Co-Chair Schrage WITHDREW the MOTION to withdraw conceptual
Amendment 1 to Amendment N 14.
Co-Chair Josephson asked if there was further objection to
the adoption of the conceptual amendment.
Representative Hannan OBJECTED. She was not in support of
the conceptual amendment because she thought allowing a cut
to be taken from one department or another was awkward. She
was in support of the underlying Amendment N 14 and thought
that it was likely that the legislature would provide the
governor with more guidance on specific cuts. She clarified
that she wanted there to be more specific cuts to the
departments than would be provided by the conceptual
amendment.
3:25:31 PM
AT EASE
3:27:41 PM
RECONVENED
[Although not explicitly stated, the OBJECTION was
MAINTAINED.]
A roll call vote was taken on the motion.
IN FAVOR: Jimmie, Allard, Johnson, Tomaszewski, Stapp,
Bynum, Foster, Schrage, Josephson
OPPOSED: Hannan, Galvin
The MOTION PASSED (9/2). There being NO further OBJECTION,
conceptual Amendment 1 to Amendment N 14 was ADOPTED.
3:29:03 PM
Representative Stapp MOVED conceptual Amendment 2 to
Amendment N 14. The amendment would increase the
unallocated cut by an additional $300 million.
Co-Chair Schrage OBJECTED.
Representative Stapp asserted that if the committee wanted
to tell the executive branch that it should be able to make
unallocated cuts, $78 million was not sufficient to address
the deficit. He believed that the governor should be given
more authority to make unallocated cuts.
Co-Chair Josephson asked if anyone else wanted to comment
on conceptual Amendment 2 to Amendment N 14.
Representative Allard expressed her support for the
conceptual amendment. She thought it was a good approach
and that the legislature should trust the governor.
Co-Chair Foster asked if the $300 million amount
corresponded to any specific calculation and how the figure
had been determined.
Representative Stapp responded that the amount was intended
to eliminate the current budget deficit and was not tied to
any particular factor. He noted that he wanted to follow
the same approach as the earlier unallocated cut proposal
in the first conceptual amendment, but he wanted to make it
more impactful to help balance the budget.
Co-Chair Schrage relayed that he appreciated the intent of
the conceptual amendment because it aligned with the goal
of his original amendment to move toward a balanced budget.
However, he cautioned that tripling the unallocated cut
from $78 million to over $300 million would place an
excessive burden on the governor, requiring reductions that
he believed were too high. He opposed the conceptual
amendment while acknowledging its good-faith intent.
Representative Allard asked if Representative Stapp
intended the amendment to help streamline what had been
done previously.
Representative Stapp replied that he did not know what had
been done previously but wished to continue in the same
direction.
Representative Galvin relayed that she would not support
the amendment. She believed the intent of Amendment N 19
had been to acknowledge the lack of surplus under the
current forecast and that it would be better to return to
the 2024 levels instead of adding $300 million in cuts. She
noted that she was more comfortable with the approach of
returning to previous funding levels and she thought the
idea would be understood by the public. She had seen the
university weather a one-third budget cut, which she
characterized as disastrous. She could not imagine making a
similar cut again.
Representative Johnson thought that the conceptual
amendment represented a substantial move that would achieve
the necessary progress. She asserted that it challenged
traditional standards and expressed appreciation for the
attempt to address the fiscal challenges.
3:33:31 PM
AT EASE
3:33:59 PM
RECONVENED
Representative Bynum requested to hear from LFD before a
vote was taken. He asked for a brief overview of the
projected overall impact of the amendment.
Mr. Painter explained that UGF totaled slightly more than
$3 billion in the numbers section. He stated that the
reduction in the conceptual amendment would be
approximately $300 million and was roughly 10 percent of
the numbers section appropriations for agencies.
3:34:59 PM
A roll call vote was taken on the motion.
IN FAVOR: Tomaszewski, Bynum, Stapp, Johnson, Allard
OPPOSED: Hannan, Jimmie, Galvin, Schrage, Foster, Josephson
The MOTION to adopt conceptual Amendment 2 to Amendment N
14 FAILED (5/6).
3:35:56 PM
Representative Allard MOVED conceptual Amendment 3 to
Amendment N 14. She explained that the amendment would
change the cut to $100 million.
Co-Chair Josephson OBJECTED.
Co-Chair Schrage reiterated the concerns he had expressed
during the discussion of the prior conceptual amendment. He
stated that members of the committee had already voiced
apprehension that the underlying amendment placed
departments under significant strain, and he thought the
reduction was excessive. He emphasized the importance of
ensuring that departments could continue to operate
effectively without risking the loss of meaningful
function, while also working toward a balanced budget.
Representative Stapp relayed that he supported the
amendment because it was a reasonable compromise between
the underlying amendment and his previous conceptual
amendment, which was a cut that he acknowledged might have
been excessive. He reminded the committee that the current
deficit was $1.9 billion. He argued that the committee
needed to make more cuts. He reiterated that he would
support the conceptual amendment.
Representative Allard asked if Mr. Painter could share what
percentage of the numbers section the conceptual amendment
would constitute.
Co-Chair Josephson noted that he could respond to the
question. He believed it was approximately 3 percent.
Representative Bynum thought the amendment needed to be
clear as to whether it made the reduction an additional
$100 million or if it made the reduction $100 million
total. He remarked that it was unclear as currently
written.
Representative Allard replied that the conceptual amendment
would add $100 million and would not reduce the original
number. She argued that the legislature should aim to cut
roughly 3 percent in the departments. She asserted that a 3
percent cut would not be detrimental because commissioners,
directors, and deputy commissioners in the departments
could effectively make decisions about cuts without the
legislature's input. She suggested that the committee could
invite the departments to appear before the committee to
discuss where the department wanted the cuts to occur.
Co-Chair Josephson commented that he was unsure whether Ms.
Marx would agree with Representative Allard's statements.
3:39:09 PM
A roll call vote was taken on the motion.
IN FAVOR: Bynum, Tomaszewski, Allard, Stapp, Johnson
OPPOSED: Hannan, Jimmie, Galvin, Schrage, Foster, Josephson
The MOTION to adopt conceptual Amendment 3 to Amendment N
14 FAILED (5/6).
3:39:56 PM
Representative Johnson explained that she wanted to move a
conceptual amendment to decrease the subcommittee
additions. She relayed that the additions totaled
$41,906,000, with one department receiving $33 million in a
single increase. She stated that she wished to act in the
spirit of fiscal responsibility and efficiency.
Representative Johnson MOVED to ADOPT conceptual Amendment
4 to Amendment N 14.
Co-Chair Josephson OBJECTED.
Co-Chair Schrage OBJECTED. He acknowledged the intent of
the amendment and recognized the challenging budget
situation. He explained that he would prefer to address the
matter as a separate amendment, beginning with the
underlying amendment and removing some of the increments
originally used as a starting point for the budget. He
reiterated that further reductions might be necessary, but
he preferred to address the reductions in a separate
amendment to allow for more discussion on the impacts of
the decrements.
Co-Chair Josephson noted that he had a list of the
amendments that would be eliminated by conceptual Amendment
4. For example, approximately six to ten institutions
within DFCS that conducted forensic interviews by trained
professionals in cases of alleged sexual abuse would close
due to the department cuts. He stated that he did not want
to participate in such a cut. He suspected that some senior
centers might also need to close. He relayed that the list
of potential impacts was long. He reiterated that he did
not support the amendment.
3:42:47 PM
AT EASE
3:43:43 PM
RECONVENED
Representative Johnson noted that there had been a request
to look at the items individually. She stated that she was
willing to set the conceptual amendment aside until later
in the budget process because some of the reductions were
already included in other amendments that were before the
committee. She wanted to reserve the right to bring the
matter forward again if possible.
Co-Chair Josephson explained that leaving the matter open
could create a parliamentary issue. He stated that if the
conceptual amendment was withdrawn, the committee could
move forward on Amendment N 14 and other conceptual
amendments to Amendment N 14 could not be introduced.
However, he believed that a member could later rescind
action on Amendment N 14.
Representative Bynum understood that if a member tabled an
item, the motion would table both the amendment to the
amendment and the amendment itself, which would place
everything on hold. He thought that Amendment N 14 could be
held until the committee pulled it from the table, voted on
it, and returned to the underlying amendment.
Co-Chair Josephson remarked that he had never seen such a
process occur in his 13 years in the legislature.
Co-Chair Schrage noted that the committee had a large stack
of amendments to address and he believed that several were
similar to the underlying amendment. He proposed that the
committee use one of the upcoming amendments that would be
rendered moot if the underlying amendment passed to offer
any additional conceptual amendments.
Representative Hannan commented that she had written
decrement amendments that had not yet been addressed. If
Amendment N 14 were adopted, she would not offer some of
her upcoming amendments because the upcoming amendments had
dollar values that were intended to bring the budget back
to the governor's adjusted base. She noted that she
intended her upcoming amendments to be specific
allocations, while Amendment N 14 was unallocated. She
would not want to reduce a specific program and also remove
the same dollar amount from the department. She clarified
that if Amendment N 14 passed, she would not offer the
decrement amendments; if it failed, she would.
Co-Chair Josephson stated that he respected the opportunity
for Representative Johnson to fine-tune the conceptual
amendment and explained that there would be multiple
opportunities during the process. He asked if the option
was satisfactory.
Representative Johnson WITHDREW conceptual Amendment 4 to
Amendment N 14.
Co-Chair Josephson asked if the objection to Amendment N 14
as amended was maintained.
Representative Johnson MAINTAINED the OBJECTION.
Representative Jimmie asked for clarification on what the
vote was on.
Co-Chair Josephson acknowledged that the proceedings had
been complicated. He explained that the committee had
started the meeting by discussing Amendment N 14, which had
been amended, resulting in a cut of $78,586,000. He stated
that the committee would vote on that amount. He noted that
other conceptual amendments had failed and clarified that
the question before the committee was whether to cut
$78,586,000 from the budget.
3:48:38 PM
AT EASE
3:49:02 PM
RECONVENED
A roll call vote was taken on the motion to adopt Amendment
N 14 as amended.
IN FAVOR: Bynum, Tomaszewski, Allard, Stapp, Johnson,
Hannan, Jimmie, Galvin, Schrage, Foster, Josephson
OPPOSED: None
The MOTION PASSED (11/0). There being NO further OBJECTION,
Amendment N 14 as amended was ADOPTED.
3:50:13 PM
AT EASE
3:50:42 PM
RECONVENED
Co-Chair Josephson stated that the committee would now
proceed through amendments in a typical sequential manner.
He noted that members had been introduced to Amendment L 2
the previous day and had had an opportunity to review it.
Co-Chair Josephson MOVED to ADOPT Amendment L 2 (copy on
file).[Due to the length of the amendment, see copy on file
for details.]
Representative Stapp requested clarification on the
amendment. He recommended that the committee proceed either
with numbers amendments or language amendments rather than
alternating between the two. He asked whether the committee
would go through all the language amendments during the
current meeting.
Co-Chair Josephson confirmed that Amendment L 1 had been
adopted and Amendment L 2 had been tabled. He asked if
there were any conceptual amendments to Amendment L 2.
3:52:14 PM
AT EASE
3:52:28 PM
RECONVENED
Co-Chair Josephson asked if there were any objections to
the motion to adopt Amendment L 2.
Representative Stapp OBJECTED.
3:52:46 PM
AT EASE
3:53:22 PM
RECONVENED
Representative Stapp MOVED to ADOPT conceptual Amendment 1
to Amendment L 2. He explained that the amendment would be
a technical change related to a numbers amendment that
would be considered later. The conceptual amendment would
delete the intent language about Medicaid services on page
7 of Amendment L 2. He intended to shift the appropriation
made in subcommittee from the Medicaid services line to the
grants line. He acknowledged that adopting the conceptual
amendment without also changing the funding source would
create problems because Amendment L 2 was a language
amendment. He noted that the committee would need to
revisit and revise the language later.
Co-Chair Josephson replied that it made sense and suggested
that it might be possible to "kill two birds with a single
stone."
3:54:21 PM
AT EASE
3:55:42 PM
RECONVENED
Co-Chair Josephson recalled that Ms. Megan Wallace from LLS
had previously explained that the aforementioned numbers
amendment that had not been discussed yet could have the
effect of supplanting and replacing the intent language in
question if it were adopted.
Representative Stapp was amenable to the possibility.
Co-Chair Josephson asked if there were any further
objections to Amendment L 2.
Representative Johnson OBJECTED.
Representative Johnson understood that the changes were all
related to language.
Co-Chair Josephson clarified that the changes were not all
language changes, but were wordage and intent language
changes.
Representative Johnson asked for confirmation that
Amendment L 2 was intent language.
Co-Chair Josephson responded in the affirmative.
Representative Johnson relayed that she wanted to highlight
that the intent language change made in subcommittee was
"half" of intent language. She stated that she did not
intend to divide the question because doing so would take
too long. She noted that positions would be added.
Co-Chair Josephson asked to which page she was referring.
Representative Johnson responded that she was referring to
page 1, item 1, of Amendment L 2. She remarked that the
committee was talking about adding positions and stated
that she did not know if positions had been added in the
numbers section. She believed there had been an attempt to
create a whole new department in the budget, which could
not be done. She emphasized that the administration had
many vacant positions and plenty of options to move people
around within the departments. She relayed that she would
probably vote against the amendment because she believed
there was more work to be done.
Co-Chair Josephson noted that there was a later amendment
that, if adopted, would have the effect of deleting the
intent language. He expressed hope that the possibility
would provide some comfort.
Representative Johnson MAINTAINED the OBJECTION.
3:58:58 PM
AT EASE
4:00:05 PM
RECONVENED
Co-Chair Josephson noted that there was an objection to
Amendment L 2 and asked if it was still maintained. He
reiterated that there was an upcoming amendment that would
remove the numbers portion and the language portion would
be removed as a result.
Representative Johnson stated that she would wait to
address the matter when the upcoming amendment was
considered.
Representative Johnson WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment L 2 was
ADOPTED.
Co-Chair Josephson MOVED to ADOPT Amendment L 4 (copy on
file). [Due to the length of the amendment, see copy on
file for details.]
4:01:06 PM
AT EASE
4:02:18 PM
RECONVENED
Representative Stapp OBJECTED.
Co-Chair Josephson MOVED to ADOPT conceptual Amendment 1 to
Amendment L 4 (copy on file):
Page 1, lines 1 - 3 of the amendment:
Delete all material.
Page 29, lines 7 - 15 of the amendment:
Delete all material.
Renumber the following bill sections of the amendment
accordingly.
Page 29, line 25 of the amendment:
Delete "28 - 34, and 36"
Insert "28 - 33, and 35"
Page 30, line 10 of the amendment:
Delete "Section 35"
Insert "Section 34"
Page 30, line 12 of the amendment:
Delete "secs. 37 and 38"
Insert "secs. 36 and 37"
Representative Bynum OBJECTED.
Co-Chair Josephson explained that conceptual Amendment 1 to
Amendment L 4 would remove the language section item that
provided for a CBR fund draw to balance the FY 26 budget.
He recalled that questions had arisen in previous meetings
regarding why the language was removed in the first
committee substitute for the budget [HCS 1 for HB 53 (copy
on file)]. He noted that the governor had included language
in his budget stating that the CBR would provide funding to
pay out a full PFD. The language had been removed and then
effectively restored.
Co-Chair Josephson explained that the committee had
initially removed the language in deference to public
statements from the Senate indicating that it was not
prepared to entertain a CBR draw. However, given the fiscal
realities, it seemed imprudent to exclude language in the
budget that would pay for a CBR draw, particularly with a
budget that was approximately $1.8 billion out of balance
with a full PFD. He stated that the language had been added
in Amendment L 4. He had heard resistance from within the
committee to adding the CBR draw language back to the
budget bill. He explained that conceptual Amendment 1 was
drafted to address the concerns. He emphasized that the
budget the committee adopted would not be the final version
because it still needed to be addressed on the House floor
and be further considered by the Senate. He explained that
a vote on how to fund any shortfall in the final version of
the budget would eventually be required. He offered the
conceptual amendment to remove the CBR draw from the bill.
He thought it was likely premature and potentially
distracting to have the ultimate funding discussion at the
current budgetary stage. He asked if there was any
objection to conceptual Amendment 1 to Amendment L 4.
4:04:36 PM
Representative Stapp OBJECTED for discussion. He stated
that he supported not drawing from savings. He observed
that it was unusual to remove the CBR, then reinstate it,
and then remove it again, but he would support conceptual
Amendment 1 because he believed the state was not in a
position to draw from savings in the current fiscal year.
He added that the next fiscal year would likely be worse,
especially with potential instability in federal funding.
He thought drawing from savings should be done only at
critical moments.
Representative Stapp WITHDREW the OBJECTION.
4:05:44 PM
Representative Bynum OBJECTED. He asked how the budget
would be balanced if the language allowing the use of the
CBR were removed.
Co-Chair Josephson replied that the answer lay principally
in the conference committee process. He stated that there
were only about four main elements at play, aside from
extraneous funding sources. He asserted that other funding
sources would not be sufficient without an Earnings Reserve
Account (ERA) overdraw, which he strongly opposed. He noted
that Co-Chair Schrage had mentioned a lower dividend as one
possible approach and other members supported a lower BSA
increase, though he was not among them. He remarked that
there were upcoming amendments to reduce the dividend,
along with other assorted ways to achieve a balanced
budget.
Representative Bynum asked for confirmation that there were
upcoming amendments that would reduce the PFD.
Co-Chair Josephson affirmed that there were amendments in
the packet to reduce the PFD.
4:07:16 PM
Representative Johnson OBJECTED. She stated that she was
unsure if the situation was strategic confusion or
something else. She remarked that the language kept being
added and removed. She noted that CBR language could be
included in the conference committee. She questioned
whether the plan was to pass an unbalanced budget out of
the committee, as the budget did not contain a CBR draw and
she was unaware of any other possible funding sources. She
remarked that the approach appeared to set up the passage
of an unbalanced budget. She asked if the plan was to move
an unbalanced budget out of committee.
Co-Chair Josephson responded that the future would
determine the outcome.
Representative Johnson asserted that she should not have to
rely on the future or a "crystal ball." She thought Co-
Chair Josephson should have a sense of the direction the
committee was headed.
Co-Chair Josephson assured Representative Johnson that she
would have a voice in the process and that there would be
other amendments. The matter would likely be resolved by a
conference committee due to $68 oil.
Representative Johnson characterized the situation as a
"top-tier train wreck."
Co-Chair Josephson asked if there was further objection.
Representative Johnson asked for clarification on the
status of the language in the conceptual amendment. She
asked if the CBR language would be in or out.
Co-Chair Josephson responded that the CBR language would be
out if the amendment was adopted.
Representative Johnson MAINTAINED the OBJECTION.
4:09:15 PM
Representative Allard expressed that the situation was a
"topnotch catastrophe" and stated that she had expected
there to be a balanced budget. She asked if it was Co-Chair
Josephson's intention to move out a balanced budget.
Co-Chair Josephson explained that both bodies' current
budgets "suffered from some red ink." He remarked that the
committee still had work to do.
Co-Chair Schrage asserted that the goal was to pass the
best budget possible, and the committee still had many
amendments to consider. He stated that while all three Co-
Chairs bore responsibility for the process, every committee
member also shared in the responsibility. He expressed hope
that there would be a balanced budget but acknowledged the
challenging fiscal situation, reduced revenues, and lack of
leadership on new revenue options. He remarked that the
committee would do the best it could under the
circumstances.
4:11:04 PM
AT EASE
4:18:30 PM
RECONVENED
Co-Chair Josephson remarked that he was reminded of
something that was elementary but often forgotten. He noted
that the question had been whether the committee intended
to send out an unbalanced budget. He stated that the
governor had provided a balanced budget that would have
substantially depleted the state's savings. He explained
that one could say the governor's budget was balanced, but
it was balanced on the back of the CBR. He noted that in
recent history, the committee had advanced an operating
budget out of committee with a $900 million deficit. He
emphasized that the committee was still in an early stage
in the process.
Representative Bynum stressed the importance of ensuring
that the state had a balanced budget. He noted that the
committee still had a large number of amendments ahead and
a significant amount of work remaining. He wondered if the
committee could wait to vote on the motion and leave the
language in place for the time being. He suggested that if
the committee reached an agreement on a balanced budget,
then removing the language might be appropriate.
Co-Chair Josephson asked whether there were any other
objections to conceptual Amendment 1 to Amendment L 4.
Representative Johnson OBJECTED. She understood that a
member of the majority had indicated earlier in the day
that the member was comfortable with spending the earnings
down to zero, which would eliminate the PFD completely. She
asserted that drawing down the CBR would effectively
eradicate all funds from the dividends and the earnings.
She was not in support of the approach.
4:21:07 PM
A roll call vote was taken on the MOTION to ADOPT
conceptual Amendment 1 to Amendment L 4.
IN FAVOR: Hannan, Jimmie, Stapp, Galvin, Schrage, Foster,
Josephson
OPPOSED: Bynum, Tomaszewski, Allard, Johnson
The MOTION PASSED (7/4). There being NO further OBJECTION,
conceptual Amendment 1 to Amendment L 4 was ADOPTED.
4:21:55 PM
Co-Chair Josephson asked whether there were any other
conceptual amendments to Amendment L 4 as amended.
Representative Stapp MOVED to ADOPT conceptual Amendment 2
to Amendment L 4.
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that the conceptual
amendment would delete all material on page 3, lines 9
through 18 of Amendment L 4, which was subsection (b)
related to Alaska Industrial Development and Export
Authority (AIDEA) language. He noted that the budget had
never previously included the AIDEA language. He relayed
that the amendment directed AIDEA's receipts to specific
areas, which he believed the agency already had the
authority to do and had done in the past. He stated that he
was unsure if he wanted the language included because he
was not certain of what the ramifications would be if the
subsection was included in the intent language.
Co-Chair Josephson requested that Mr. Painter describe the
ramifications of removing subsection (b).
Mr. Painter explained that the language had not
historically been included in the budget. He noted that the
language was conceptually similar to language long included
in the budget for the Alaska Housing Finance Corporation
(AHFC), which appropriated the corporation's earnings back
to the corporation and allowed the board of directors to
determine how the funds were spent. He noted that the
concern with not with implementing similar language for
AIDEA, but the concern was whether its funds required an
appropriation under the constitution. He suggested that the
matter could be addressed by legal counsel. He explained
that subsection (b) would give AIDEA's board the ability to
transfer funds between accounts under existing statutory
authority. He stressed that the question was whether an
appropriation was also required. He noted that the language
allowed for the appropriation, which was not currently in
the budget.
Co-Chair Josephson asked if the effect of the language was
that AIDEA would be able to continue operating as it
already was, with no change to its operations.
Mr. Painter replied that it should have no effect on
AIDEA's operations or flexibility. He stated that he had
not spoken directly with AIDEA about the language, but that
the language granted the board authority it already
possessed under statute.
Co-Chair Josephson suggested that the language functioned
as a statement that the legislators were the appropriators.
He asked if his understanding was accurate.
Mr. Painter responded that the language communicated that
any earnings needed be an appropriation to avoid the
dedication of funds. The constitution stated that all funds
were expenditures of the state and that the funds required
an appropriation. He reiterated that the language
appropriated the funds to AIDEA to spend according to its
statutory authority.
4:25:57 PM
Representative Bynum expressed support for the amendment.
He relayed that he would feel more comfortable if there was
an opportunity to discuss with AIDEA the potential impacts.
He wanted to avoid any unintended consequences from
retaining the language and thought it did not appear to
have been fully vetted for possible effects. He added that
AIDEA had expressed concerns about the potential future
impacts if such language were included in the budget, and
he did not want there to be unintended consequences.
Representative Stapp remarked that since the language did
not appear to have any substantive effect, it should not be
included in the budget unnecessarily. He encouraged members
to support the conceptual amendment.
4:27:16 PM
A roll call vote was taken on the motion.
IN FAVOR: Bynum, Tomaszewski, Allard, Stapp
OPPOSED: Hannan, Jimmie, Galvin, Schrage, Foster,
Josephson
Representative Johnson was absent from the vote.
The MOTION to adopt conceptual Amendment 2 to Amendment L 4
FAILED (4/6).
4:28:10 PM
Representative Bynum MOVED to ADOPT conceptual Amendment 3
to Amendment L 4.
Representative Hannan OBJECTED for discussion.
Representative Bynum explained that the conceptual
amendment would delete $5 million and insert $10 million on
page 12, line 28 of Amendment L 4.
Representative Hannan asked if the language was related to
backfill Alaska Marine Highway System (AMHS) language.
Representative Bynum responded in the affirmative.
Representative Hannan WITHDREW the OBJECTION. She explained
that she needed to know what the subject was because it had
not been discussed yet.
Representative Stapp OBJECTED for discussion. He asked why
$10 million was needed instead of $5 million.
Representative Bynum responded that providing an additional
safety net for AMHS had not been done before but he thought
it was necessary.
Representative Allard OBJECTED.
4:30:12 PM
AT EASE
4:31:51 PM
RECONVENED
A roll call vote was taken on the motion to adopt
conceptual Amendment 3 to Amendment L 4.
IN FAVOR: Johnson, Bynum, Hannan
OPPOSED: Jimmie, Galvin, Stapp, Allard, Tomaszewski,
Foster, Schrage, Josephson
The MOTION to adopt conceptual Amendment 3 to Amendment L 4
FAILED (3/8).
4:33:08 PM
Co-Chair Josephson asked if there was any further
discussion about Amendment L 4.
Representative Tomaszewski commented that since the CBR
language had been effectively removed, the intent of the
amendment was to reduce the PFD down to "nearly nothing."
He indicated that he would vote against the amendment.
Co-Chair Schrage responded that the dividend was not
mentioned in the amendment and that the budget could be
balanced in a number of different ways. The outcome was not
a foregone conclusion, as the legislature had many tools
and options available, several of which had been discussed
earlier in the meeting.
Co-Chair Josephson commented that the body of the budget
bill retained a full dividend.
Representative Stapp asked whether the title on page 1,
line 2 of Amendment L 4 would need to be changed because
the CBR language had been removed. He questioned whether it
was considered a technical change because the title
language remained but the CBR was no longer in the bill.
Co-Chair Josephson asked Mr. Painter to clarify whether the
change would be considered technical and conforming or if
the title was problematic. He noted that the bill still
included a full PFD and asked if the dividend would
technically be funded from the general fund as the bill was
currently written.
4:35:06 PM
AT EASE
4:35:36 PM
RECONVENED
Mr. Painter replied that the dividend was funded directly
through the ERA. He confirmed that the remaining ERA
balance, or the remaining percent of market value (POMV)
draw beyond the dividend, was sent to the general fund. He
clarified that the dividend appropriation would not go
through the general fund, as the funds came directly from
the ERA.
Co-Chair Josephson added that the amendment provided for a
fully funded dividend.
Representative Allard asked if it would be impossible to
pass out a balanced budget if a full dividend were
included. She stated that she understood there was still
much to review.
Co-Chair Josephson replied that there was a term in court
called "asked and answered" and he thought that he had
already addressed the question as well as he could.
Representative Stapp commented that he wanted to ensure the
committee was making the best possible decision. He
remarked that the amendment represented a fully funded
dividend but a completely unfunded government, which he
believed was the most accurate way to describe the
situation.
Representative Tomaszewski asserted that the committee was
engaging in "precision-level guesswork." He stated that
describing the amendment as including a fully funded
dividend was misleading to constituents because it did not
reflect the state's overall fiscal reality. He thought
clarity was important.
Co-Chair Josephson expressed appreciation for
Representative Tomaszewski's remarks and noted that it was
an important point.
4:38:14 PM
A roll call vote was taken on the motion to adopt
Amendment L 4 as amended.
IN FAVOR: Hannan, Tomaszewski, Galvin, Jimmie, Foster,
Schrage, Josephson
OPPOSED: Allard, Johnson, Stapp
The MOTION PASSED (8/3). There being NO further OBJECTION,
Amendment L 4 was ADOPTED as amended.
4:38:59 PM
Co-Chair Josephson stated that the committee would proceed
to Amendment 5 then take a short break.
Representative Stapp MOVED to ADOPT Amendment L 5 (copy on
file):
Transaction Details
Title: Add Funds for UAF to Achieve R1 Research Status
(FY26-FY27)
Section: Language
Type: MultiYr
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 7,500.0
7,500.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1226 High Ed 7,500.0
Explanation
These funds would be used to assist the University of
Alaska Fairbanks campus to achieve R1 Research Status
as defined by the Carnegie Classification of
Institutions of Higher Education. The $7.5 million
will be funded from the Higher Education Investment
Fund (1226) which will provide additional motivation
for UAF to succeed in their pursuit of R1 Research
status and if successful, provide a return on
investment to the University of Alaska in the form of
higher enrollment and additional research grants.
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that the amendment concerned
funding for the R1 [the highest level of research activity]
classification at UA. He noted that the item was currently
in the capital budget and used general fund dollars. The
amendment would replace the general fund dollars with
Higher Education Investment Fund (HEIF) dollars to reduce
pressure on the budget. He stated that the balance of HEIF
was a little over $400 million and acknowledged that a $7.5
million withdrawal might be excessive. He indicated that he
was open to discussion and possible changes.
Co-Chair Schrage MOVED to ADOPT conceptual Amendment 1 to
Amendment L 5 to reduce the amount to $5 million.
Representative Galvin OBJECTED for discussion.
Co-Chair Schrage stated that the conceptual amendment was
offered in a cooperative spirit after consultation with
Representative Stapp and with the university. He believed
that the approach addressed the main concerns.
Representative Galvin expressed appreciation for the
collaboration between members from Fairbanks and Anchorage.
She stated that she had not yet heard from the higher
education representatives and wanted to know whether $5
million might still be too high. She noted that there had
been an increase in recipients of popular scholarships and
expressed concern about depleting the fund. She asked for
clarification regarding the potential impact.
Representative Stapp responded that the draw on the fund
was probably too high and he suggested that LFD could
provide more detail. He thought the draw was a little over
5 percent based on the individuals who were "overutilizing"
scholarships. He was not sure how the rate would be
maintained. He shared that his objective was to ensure the
committee could fund items that were changed and vetoed
during the conference committee process in the prior year.
He thought that the amendment was the best way to
accomplish the goal. He agreed on a broader level that
continuing to draw from HEIF would not be beneficial, but
he intended for the amendment to be the final use of the
fund in order to complete the project.
Representative Galvin noted that there was a backup
document that was distributed to the committee (copy on
file) that more clearly outlined the relevant figures. The
document made her more comfortable with the amendment and
she was in support of the amendment, particularly the $5
million amount. She acknowledged the importance of the
scholarships but also recognized the potential for the
program to eventually generate returns that would exceed
the $5 million investment. She shared that she would vote
in favor of the conceptual amendment.
[Although not explicitly stated, Representative Galvin
WITHDREW the OBJECTION.]
There being NO further OBJECTION, conceptual Amendment 1 to
Amendment L 5 was ADOPTED.
4:44:14 PM
Co-Chair Josephson MOVED to ADOPT conceptual Amendment 2 to
Amendment L 5 (copy on file).
[Due to the length of the amendment, see copy on file for
details.]
Representative Stapp OBJECTED.
Co-Chair Josephson stated that he was aware of the
counterarguments but believed that the people of Alaska
could not wait for the executive branch and the legislature
to align on the issue of education. He emphasized that
people needed to live their lives and move forward. He
recounted attending a forum with former Alaska Governor
Sean Parnell in Anchorage a year or two earlier, during
which he had met with student athletes. He explained that
Governor Parnell and the regents were seeking $5 million,
with $4 million to be split evenly between the campuses. He
noted that the University of Alaska Anchorage (UAA), where
he had earned a master's degree and taught previously,
would receive $2 million for its sports programs. He added
that the University of Alaska Fairbanks (UAF) would also
receive $2 million.
Co-Chair Josephson acknowledged the challenging fiscal
environment but believed there was a valid economic
argument for the funding. He explained that athletics
generated benefits similar to other industries, such as
increased purchasing power, home buying, and overall
economic activity. He noted that Governor Parnell had
reported positive impacts in athletics due in part to
designated general fund ticket purchases and heightened
alumni engagement.
Representative Stapp MAINTAINED the OBJECTION.
Representative Bynum expressed appreciation for the
proposed use of the funding but stated that he could not
support the amendment. He thought it was a good cause but
there were too many competing priorities. He argued that
there was tremendous opportunity for the legislature to
address backlog maintenance at the university and other
facilities throughout the state, as well as address
education funding. He asserted that if it was a priority
for the university, it could find a different route to fund
it other than UGF.
Co-Chair Josephson clarified that it was multi-year item
and not a base item. He explained that it would be time-
limited to two years.
Representative Allard relayed that she supported the
amendment because she thought sports was a way to recruit
students to come up to Alaska.
4:48:26 PM
A roll call vote was taken but VOIDED due to an incorrect
tally.
4:50:30 PM
AT EASE
4:55:37 PM
RECONVENED
Co-Chair Josephson recognized that Representative Andrew
Gray, Representative Rebecca Schwanke, and Representative
Bill Elam were in the room.
Co-Chair Josephson clarified that funding in the conceptual
amendment would cover the same time span as the underlying
Amendment L 5, which was FY 26 to FY 27.
4:56:33 PM
A roll call vote was taken on the motion to adopt
conceptual Amendment 2 to Amendment L 5.
IN FAVOR: Galvin, Johnson, Stapp, Allard, Tomaszewski,
Foster, Schrage, Josephson
OPPOSED: Hannan, Bynum, Jimmie
The MOTION PASSED (8/3). There being NO further OBJECTION,
conceptual Amendment 2 to Amendment L 5 was ADOPTED.
4:57:53 PM
Co-Chair Josephson asked if there was additional discussion
about Amendment L 5 as amended.
Representative Allard OBJECTED.
Representative Bynum asked for clarification that
conceptual Amendment 2 to Amendment L 5 that had just been
adopted was in addition to Amendment L 5 itself. He
understood that the conceptual amendment was additional
funding for the R1 research status for FY 26 through FY 27,
which had been amended to $5 million, and that Amendment L
5 as amended included an additional $4 million for another
purpose.
Co-Chair Josephson responded in the affirmative.
Representative Stapp noted that as a reminder to the
public, the funding for the R1 appropriation was already in
the capital budget. He explained that the committee had
reduced the general fund appropriation for the item and
replaced it with funds from HEIF, which he believed was a
good use of higher education money.
Representative Allard MAINTAINED the OBJECTION.
4:59:18 PM
A roll call vote was taken on the motion to adopt
Amendment L 5 as amended.
IN FAVOR: Johnson, Tomaszewski, Stapp, Galvin, Foster,
Schrage, Josephson
OPPOSED: Jimmie, Allard, Hannan, Bynum
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment L 5 was ADOPTED as amended.
5:00:40 PM
AT EASE
5:20:40 PM
RECONVENED
Co-Chair Schrage would not be offering Amendment L 6 and
Amendment L 7 (copy on file).
Co-Chair Schrage MOVED to ADOPT Amendment L 8 (copy on
file):
Agency: University of Alaska
Appropriation: University of Alaska
Allocation: Troth Yeddha' Campus
Transaction Details
Title: UAF Alaska Center Unmanned Aircraft System
Integration (ACUASI)(FY26-FY28)
Section: Section 1
Type: IncT
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 2,000.0
2,000.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund 2,000.0
Explanation
Appropriates $2,000,000 to the University of Alaska
Fairbanks (UAF) as a IncT for Fiscal Years ending June
30, 2026, June 30, 2027, and June 30, 2028 (totaling
$6,000,000).
UAF conducts many of the testing operations needed to
support the full integration of drones with
traditional aircraft in United States airspace and
develop the workforce needed to support this emerging
industry in Alaska. The UAF and its partners across
the University of Alaska system are working to develop
a drone economy in Alaska.
This effort includes developing educational pathways
into this emerging industry, working with the Federal
Aviation Administration to develop rules and
regulations that will allow the safe integration of
drones with traditional aviation in Alaska, supporting
the development and testing of technologies for
Alaskan missions created by Alaskan companies, and
determining the potential economic and social benefits
of the technology to Alaskans, especially those in
rural communities.
Representative Stapp OBJECTED.
Co-Chair Schrage explained that the amendment moved the UAF
drone program to the operating budget. The amendment would
appropriate $2 million to the base budget for FY 26 through
FY 28, totaling $6 million over three fiscal years. He
explained that to date, the program had received $26
million in state funds, including $6 million in 2024, $10
million in 2023, and $10 million in 2022, funded through
both the capital and operating budgets. He relayed that he
offered the amendment in recognition of the state's
difficult fiscal environment. He noted that the amendment
spread the appropriation over multiple years rather than
providing the funding in the capital budget up front, which
maintained more of the state's cash position in the current
year where it was most needed.
Representative Stapp observed that Amendment L 9 appeared
to accomplish a similar objective. He noted that he did not
know if his point was procedurally appropriate. He
requested an explanation of the difference between the two
amendments. He indicated that he would likely remove his
objection after the explanation.
Co-Chair Schrage agreed that an explanation was worthwhile
and invited Mr. Michael Partlow from LFD to address the
question.
5:23:04 PM
MICHAEL PARTLOW, BUDGET ANALYST, LEGISLATIVE FINANCE
DIVISION, explained that the difference between the two
amendments concerned the timing of the appropriations. He
stated that Amendment 8 appropriated $2 million in the
current year and maintained the amount in the budget for
the following three years. In contrast, Amendment L 9 would
provide the full appropriation up front and give the
program three years to spend the money. He summarized that
Amendment L 8 spent less in the current fiscal year and
added recurring funding to the budget, while Amendment L 9
provided the full appropriation immediately and allowed
expenditures over the same period of time.
Representative Johnson asked if a multi-year appropriation
in the capital budget allowed the money to be spent over
several years. She understood that the funds typically
lapsed at the end of the fiscal year in the operating
budget. She requested clarification on how the process
worked.
Mr. Partlow responded that appropriations could be
structured across multiple fiscal years in the language
section of the operating bill. He clarified that Section 1
usually contained single-year appropriations, but the
operating budget could include specific language to allow
funds to be spent over several years.
5:24:43 PM
Representative Stapp WITHDREW the OBJECTION. He asked what
the capital appropriation amount was.
Mr. Partlow responded that he did not have the number
offhand.
5:25:06 PM
AT EASE
5:26:02 PM
RECONVENED
Representative Hannan OBJECTED.
Representative Bynum asked why the funding was being moved
into the operating budget rather than the capital budget.
Co-Chair Schrage responded that the original appropriation
in the capital budget had been $7.5 million. He indicated
that the legislature did not have the funds to provide the
amount up front to the university given the state's tight
fiscal situation. He stated that by moving the item into
the operating budget, the legislature could fund the
program incrementally, put less money toward the program in
the current year, and protect the state's financial
position.
Representative Bynum asked what would happen to the program
if future budgets became constrained and the program became
unfunded.
Co-Chair Schrage replied that if the financial position
continued to decline, the legislature would continue to
face the same problem whether the money was provided in the
current year or in future years. He remarked that the
legislature should continue to evaluate which programs were
funded. He stated that the amendment offered an opportunity
to review the funding year by year and prioritize the
limited resources available.
Representative Hannan WITHDREW the OBJECTION.
Representative Allard OBJECTED.
5:28:28 PM
A roll call vote was taken on the motion to adopt
Amendment L 8.
IN FAVOR: Hannan, Bynum, Johnson, Tomaszewski, Stapp,
Galvin, Foster, Schrage, Josephson
OPPOSED: Allard, Jimmie
The MOTION PASSED (9/2). There being NO further OBJECTION,
Amendment L 8 was ADOPTED.
5:29:37 PM
AT EASE
5:34:03 PM
RECONVENED
Co-Chair Schrage would not be offering Amendment L 9 (copy
on file).
5:34:17 PM
Co-Chair Schrage MOVED to ADOPT Amendment L 10 (copy on
file):
Agency: University of Alaska
Appropriation: University of Alaska
Allocation: Troth Yeddha' Campus
Transaction Details
Title: UAF Agriculture and Food Systems for Alaska's
Economic Sustainability (FY26-FY28)
Section: Section 1
Type: IncT
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 1,000.0
1,000.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund 1,000.0
Explanation
Appropriates $1,000,000 for the University of Alaska
Fairbanks for research into agriculture and food
systems for Alaska's economic sustainability for
fiscal years ending June 30, 2026, June 30, 2027, and
June 30, 2028 (totaling $3,000,000).
Alaska agricultural research will become more agile as
Alaska faces increasing food security demands and the
need for industrial growth and expansion to help all
Alaskans live better lives. Investment in agricultural
research by Alaska will open more opportunities for
diversified research production, meet federal capacity
grant funding needs, and become a viable place for
collaborative agricultural research with other states
and nations.
Representative Stapp OBJECTED.
Co-Chair Schrage explained that the amendment aimed to move
the UAF agriculture and food systems for Alaska economic
sustainability project from the capital budget to the
operating budget. The amendment would appropriate $1
million to the base for FY 26 through FY 28, totaling $3
million dollars over the three fiscal years. He remarked
that the research project would be more appropriately
placed in the operating budget rather than the capital
budget.
Co-Chair Josephson asked whether the governor had
originally placed the item in the capital budget.
Co-Chair Schrage responded in the affirmative.
Representative Stapp WITHDREW the OBJECTION.
Representative Johnson OBJECTED. She asked whether a vote
in opposition to the amendment meant voting for the item to
remain in the capital budget. She asked if the item would
simply return to the capital budget if the amendment was
not adopted.
Co-Chair Josephson responded that he was confident that the
item would remain in the capital budget if the amendment
was not adopted.
Co-Chair Schrage confirmed that if the amendment failed,
the item would remain in the capital budget at a higher
amount. He relayed that the state's total UGF budget,
including both operating and capital, would be higher if
the amendment were to fail. He clarified that adopting the
amendment would reduce UGF spending in the upcoming fiscal
year and preserve funds and flexibility for future fiscal
years while spreading the investment over time.
Representative Johnson asked for clarification on whether
the item would remain in the capital budget.
Co-Chair Schrage responded that it was UGF in the capital
budget, but at a higher dollar amount. He emphasized that
moving the appropriation to the operating budget would
decrease the appropriation for the upcoming fiscal year
while maintaining flexibility for future investment.
Representative Johnson commented that she understood.
Representative Johnson MAINTAINED the OBJECTION.
5:37:42 PM
A roll call vote was taken on the motion.
IN FAVOR: Galvin, Hannan, Jimmie, Foster, Schrage,
Josephson
OPPOSED: Stapp, Allard, Tomaszewski, Bynum, Johnson
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendment L 10 was ADOPTED.
5:38:34 PM
Co-Chair Schrage did not offer Amendment L11 (copy on
file).
Representative Stapp did not offer Amendment L 12 (copy on
file).
5:38:54 PM
Representative Tomaszewski MOVED to ADOPT Amendment L 13
(copy on file):
Transaction Details
Title: Extend Arctic Winter Games Grant through FY26
Section: Language
Type: Lang
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 0.0
0.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
Explanation
Changing to extend the Arctic Winter Games Grant from
June 30, 2025 through the fiscal year ending June 30,
2026
Page 13 line 23, following "DEVELOPMENT.":
Insert "(a)"
Page 13 following line 26:
Insert a new subsection to read:
"(b) Section 35(/), ch. 7, SLA 2024, is amended
to read:
(/) The sum of $150,000 is appropriated from the
general fund to the Department of Commerce, Community,
and Economic Development for payment as a grant under
AS 37.05.316 to Arctic Winter Games Team Alaska for
Arctic Winter Games events for the fiscal years [YEAR]
ending June 30, 2025, and June 30, 2026."
Co-Chair Schrage OBJECTED for purposes of discussion.
Representative Tomaszewski explained that the amendment
concerned the Arctic Winter Games grant. He stated that the
funding had been included in the prior year's budget, but
the games had not been held in 2025 and the funding had not
been used. He noted that the Arctic Winter Games would take
place in 2026 and the amendment would allow the existing
funding to be used. He emphasized that the amendment would
have no cost to the FY 26 budget since the funding was
already in place. The amendment simply changed the year in
which the funding could be utilized.
Co-Chair Schrage WITHDREW the OBJECTION.
5:39:40 PM
AT EASE
5:44:06 PM
RECONVENED
Representative Hannan stated that her recollection was that
the $150,000 appropriation had been made at the end of the
previous year's session to backfill the 2024 Arctic Winter
Games held in the Matanuska-Susitna Valley. She expressed
surprise that the current amendment suggested that none of
the funds had been spent the previous year. She noted that
the 2026 Arctic Winter Games would be held in Whitehorse
and asked whether any money from the previous year's
appropriation had been spent or if the funds were simply
sitting in the account. She wondered if the money might
revert to the state if the amendment were not adopted,
because the funding was a grant to an organization rather
than general fund revenue.
Co-Chair Josephson asked if LFD could clarify the situation
and the balance of the account.
Mr. Painter replied that he did not know the balance but
shared that the last games had been held in March of 2024,
while the appropriation did not take effect until July 1,
2024. The funds could not be used for the 2024 games
because the games had already concluded. He explained that
the appropriation was made to Team Alaska, which incurred
expenses associated with participation regardless of the
location of the games. He emphasized that he did not know
how much of the appropriation had been spent so far in the
current year.
Representative Hannan relayed that she would vote in
opposition to the amendment. She remarked that there had
been an extensive campaign to rush the appropriation for FY
24 to assist the program. She thought that it felt
misleading. She expressed concern that the current
amendment made it appear as though the funds had not been
spent, while the prior urgency suggested otherwise. She
felt misled because none of the funds had been spent and
there was desire to hold on to the funds for the next two
years.
Co-Chair Josephson advised that Representative Hannan was
not suggesting anyone had been intentionally misleading,
but that the program had been misleading.
Representative Hannan responded in the affirmative. She
asserted that the legislature was led to believe that the
fiscal situation was desperate and that securing
sponsorships for the program had been difficult.
Representative Johnson recalled that the funding had been
appropriated by the Senate. She emphasized that the grant
was for the organization as a whole rather than an event at
a specific location. The funds covered expenses like the
athletes' uniforms and travel. She stated that she did not
feel misled and highlighted the importance of maintaining
consistent support for the program over time to ensure that
local athletes throughout Alaska could participate.
Co-Chair Josephson asked Mr. Painter to confirm that
accounting was being done for the grant.
Mr. Painter confirmed that DCCED managed the grant and paid
the invoices.
5:49:05 PM
Representative Allard explained that her daughters had been
invited to the Arctic Winter Games, but the event had been
canceled due to the COVID-19 pandemic. She noted that the
organization had incurred substantial upfront expenses and
had not yet been reimbursed. She recalled that a prior
reimbursement of approximately $275,000 had been authorized
by the Anchorage Assembly to cover some of the costs. She
added that the current funding would support scholarship
funds for the next cycle. The organization needed funds in
advance to pay deposits for hotels, flights, buses, and
uniforms and without the funding, the organization could
not provide the necessary arrangements for the
participating children and teenagers.
Representative Hannan relayed that she had changed her
position on the amendment. She had recently heard from two
legislators who offered the amendment the prior year. She
explained that DCCED had not permitted the Arctic Winter
Games to use grant funds for uniforms, which had been the
original intent of the amendment. By moving the funding to
the next fiscal year, the organization would be able to
cover the cost of uniforms that had already been purchased
but had not been reimbursed.
Representative Hannan WITHDREW the OBJECTION.
Co-Chair Schrage OBJECTED.
Co-Chair Josephson asked for clarification that the Arctic
Winter Games wanted to use the funding to pay for uniforms
and that DCCED did not want to provide the money.
Representative Hannan explained that as it was written in
the prior year's budget, DCCED stated that it was not
allowed to pay for the uniforms.
Co-Chair Josephson thought that the amendment did not seem
that restrictive.
Representative Galvin suggested moving a conceptual
amendment to explicitly allow use of the funding for
uniforms and travel. She thought a conceptual amendment
could ensure that there was consistency with the original
intent of the grant and avoid restrictions that might still
apply under DCCED's rules.
Representative Tomaszewski stated that he did not object to
broadening the amendment to allow the organization to use
the funds for travel and uniforms. He thought that a
clarification would ensure that students would not face
logistical difficulties when traveling to Whitehorse.
Co-Chair Schrage explained that he had raised an objection
because there was some uncertainty about the history and
the specific amount required for uniforms. He emphasized
that while he supported the Arctic Winter Games and the
ability for participants to obtain uniforms, he did not
think there was clear and consistent information regarding
the funding needs. He requested to set the amendment aside
temporarily to gather more information before voting. He
understood that in the previous year, the House had
included in the budget $300,000 in UGF for ongoing annual
support of Team Alaska for the Arctic Winter Games. He
observed that in previous years, grants to the organization
had been ad hoc and determined annually. He suggested that
if the conference committee agreed with the House, the
grant could become an automatic annual appropriation. He
reiterated that he did not have the clarity he needed on
the situation. Although the $150,000 request might not seem
significant, the state's fiscal situation was difficult and
he was concerned that the funding might be better used
elsewhere.
Co-Chair Josephson noted that Representative Ashley Carrick
was present in the audience.
5:54:41 PM
Mr. Painter explained that he had received additional
information from OMB while the committee was deliberating.
According to OMB, the current scope of the Arctic Winter
Games grant was broad enough to encompass uniforms. He
noted that no funds had yet been spent, but the grant
agreement was still being finalized. He explained that the
extension would allow the funding to be extended into the
next fiscal year, and uniforms fell within the scope of the
grant.
Co-Chair Josephson asked for confirmation that the $150,000
request was not exclusively for uniforms or travel and it
could also cover accommodations or other expenses.
Mr. Painter confirmed that the department was currently
coordinating with the grantee to define the exact scope of
the grant.
Representative Stapp suggested that the committee might be
overanalyzing the issue. He noted that the Arctic Winter
Games had received a $300,000 grant, but the organization
could not obtain full reimbursement within the original
timeframe. He stated that the amendment simply allowed
additional time to expend the funds, which the organization
might have already covered on its own. He asserted that
there was no apparent harm in providing a longer duration
for use of the funds.
Co-Chair Josephson commented that he did not see the harm
in it either.
5:56:29 PM
AT EASE
5:56:59 PM
RECONVENED
Co-Chair Josephson relayed that the committee would allow
Representative Carrick to speak on the amendment, which was
unusual. He offered reassurance that he would not make a
habit of the situation.
Representative Carrick expressed appreciation for the
committee's indulgence. She recalled that in the prior
year, she and former Representative Mike Cronk had jointly
offered a $150,000 amendment on the House floor for the
Arctic Winter Games. She clarified that the amendment was a
direct grant to a named recipient through DCCED, intended
for expenditures related to the 2026 games. She explained
that the intent had been to use the funding in 2025 for
uniforms for the 2026 team. However, DCCED had informed the
Arctic Winter Games that because the amendment language
specified the 2026 games, the funds could not be spent in
2025. She encouraged the committee to support the
amendment, which extended the budgetary authority and
provided flexibility for reimbursement of the uniforms,
which the organization had already purchased through other
means.
Co-Chair Josephson asked whether there were any additional
matters to address regarding the item.
Representative Allard emphasized the importance of the
funding, noting that almost 2,500 athletes from Alaska
participated in the Arctic Winter Games. She highlighted
that Alaska was the only U.S. state invited to compete
alongside international participants. She remarked that the
funding was a high priority relative to other state
expenditures, such as park maintenance.
Representative Bynum stated that he intended to propose a
conceptual amendment but requested a brief at ease before
proceeding.
5:59:36 PM
AT EASE
5:59:48 PM
RECONVENED
Co-Chair Josephson announced that the committee would be at
ease for approximately 30 minutes.
6:00:04 PM
AT EASE
6:44:50 PM
RECONVENED
Co-Chair Josephson noted the committee was on Amendment L
13. He asked if there was more discussion.
Representative Bynum OBJECTED.
Representative Bynum MOVED to ADOPT conceptual Amendment 1
to Amendment L 13.
Representative Hannan OBJECTED for discussion.
Representative Bynum explained that the conceptual
amendment would add $5 million for tourism marketing for FY
26. He noted that it was a DCCED marketing and tourism
appropriation and he had been seeking the most appropriate
location to present the amendment. Tourism was one of the
pillars of Alaska's economy and a highly competitive
sector, and the $5 million appropriation would go directly
to marketing, not to administrative costs or overhead. He
remarked that marketing produced a return between nine to
twelve times the dollars invested. He pointed out that
other states were spending significantly more, with Montana
allocating $5 million annually, Utah allocating $20
million, and Hawaii allocating $60 million. He stressed
that it was imperative for Alaska to remain competitive
both nationally and globally. The Alaska tourism industry
was a major economic driver and the second largest industry
for private employers in the state, employing one in ten
Alaskans. He stated that in 2023, 2.5 million visitors came
to Alaska, generating more than $5 billion in economic
activity. He explained that data from the Alaska Travel
Industry Association (ATIA) showed that for every $1
invested in tourism marketing, the state received $9 to $12
in visitor spending. He stated that a $5 million investment
could generate between $45 million and $60 million in new
spending that would benefit local businesses, restaurants,
tourism operations, and communities statewide. He added
that ensuring a robust economy was essential while other
industries faced challenges.
Co-Chair Josephson asked for clarification that the
conceptual amendment directed $5 million to ATIA.
Representative Bynum confirmed that the ultimate goal was
to direct the funding to ATIA.
Co-Chair Josephson asked if the amendment would apply to a
multi-year FY 25 to FY 26 appropriation and whether the
governor could spend the funds as early as June of 2025 if
the bill were signed on June 1.
Representative Bynum responded that his intention was for
the funding to apply only to FY 26.
Representative Galvin expressed appreciation for the
amendment and for ATIA's work. She stated that although she
strongly supported ATIA, she would not support the
amendment because her research indicated that ATIA could
find support through another avenue. She acknowledged the
importance of discussing the high return on investment and
understood that ATIA's work was highly valuable to the
economy. She remarked that it was comparable to the strong
return seen in early learning. She added that historically,
ATIA had been tied to car rental tax revenues. She
explained that about 70 percent of car rental tax dollars
came from out-of-state travelers and that the original
intent was to direct those funds to ATIA. She noted that
during difficult fiscal times, the funding arrangement had
changed. She reiterated that she appreciated the amendment,
though she would not be voting in favor of it.
6:51:14 PM
Representative Stapp observed that the underlying amendment
was in the language section. He thought that if it was not
a multi-year appropriation, it would be difficult to insert
it into the language section.
Co-Chair Josephson noted that he had a similar concern. He
asked Mr. Painter to provide clarification.
Mr. Painter replied that the conceptual amendment would add
an unrelated item in a different fiscal year. He explained
that the underlying amendment referred to a supplemental
language item applying from FY 25 to FY 26. He was not
certain if the conceptual amendment would add the $5
million to the base or as an IncT. He relayed that the
conceptual amendment could be placed in the bill if it was
the will of the committee. He added that the one point
needing clarification was whether it would be permanent or
an IncT.
Co-Chair Josephson understood that the conceptual amendment
was manageable. He asked Representative Bynum what his
intent was in terms of the longevity of the appropriation.
Representative Bynum responded that his intention was for
it to be a single-year appropriation and not a multi-year
item.
Representative Allard remarked that her concern was that
the conceptual amendment would be included within
Amendment L 13. She explained that she would vote no on the
conceptual amendment, which would in turn prevent her from
supporting the underlying Amendment L 13. She asserted that
it would jeopardize her ability to vote in favor of
Amendment L 13, which she regretted, and wished that there
was a better placement for the conceptual amendment.
6:53:46 PM
Representative Johnson commented that she shared the same
concern as Representative Allard. She expressed uncertainty
whether the intent of the conceptual amendment was to
undermine the Arctic Winter Games funding, which was how it
appeared.
Representative Hannan stated that she would not support
conceptual Amendment 1 to Amendment L 13. She explained
that it had taken her time to understand that Amendment L
13 did not add money or create new spending, but rather
extended the appropriation at zero cost. She noted that she
could support the underlying amendment, but she could not
support adding the $5 million in the current budget.
Co-Chair Foster shared that he supported both measures. He
emphasized that by voting in favor of the ATIA funding, he
was not attempting to undermine the Arctic Winter Games
funding.
Representative Bynum relayed that the state had a seafood
industry that had received $10 million in allocations
because of its recognized importance to economic growth. He
asserted that tourism was no less important, especially
given the current condition of the economy. He added that
the request had been made in prior years and had been
included in budgets consistently, demonstrating that it
produced economic growth and a return on investment.
A roll call vote was taken on the motion.
IN FAVOR: Bynum, Tomaszewski, Josephson, Foster
OPPOSED: Johnson, Hannan, Jimmie, Allard, Galvin, Stapp,
Schrage
The MOTION to ADOPT conceptual Amendment 1 to Amendment L
13 FAILED (4/7).
6:56:25 PM
Co-Chair Josephson noted that Amendment L 13 was before the
committee.
Co-Chair Josephson WITHDREW the OBJECTION. There being NO
further OBJECTION, Amendment L 13 was ADOPTED.
Co-Chair Josephson reminded members that Amendment 14 had
already been addressed.
Co-Chair Schrage did not offer Amendment N 15 (copy on
file).
Representative Jimmie did not offer Amendment N 16 (copy on
file).
Representative Bynum did not offer Amendment N 17 (copy on
file).
Representative Stapp did not offer Amendment N 18 (copy on
file).
Representative Stapp MOVED to ADOPT Amendment N 19 (copy on
file).
[Due to the length of the amendment, see copy on file for
details.]
Co-Chair Josephson OBJECTED for discussion.
6:58:55 PM
Representative Stapp remarked that he considered the
amendment an actual cut, unlike the earlier unallocated
cut. He noted that he had provided an OMB handout to
accompany the amendment (copy on file). He relayed that
each year, the committee received a lapse report from OMB
which outlined how much money from the prior year's
departmental appropriation would lapse back into either the
waterfall funds for capitalization of AlaskaCare, or into
the CBR.
Representative Stapp pointed out that the amendment
proposed to cut vacant positions that had remained unfilled
for more than two years, although DOA had informed him that
one of the positions had been filled that day. He directed
the committee's attention to the OMB handout, which
indicated that DOA was not projected to lapse any funds.
When appropriations were passed, the committee budgeted
positions above the vacancy factor and a not at 100 percent
staffing level. He stated that when examining unfilled
positions in state government, the vacancy rate was
substantially higher than the vacancy factor, which
resulted in more money being budgeted than was
theoretically necessary to hire employees.
Representative Stapp asserted that two years was too long
for a position to remain unfilled and urged departments
either to hire for unfilled positions or to disclose how
personnel services funds were being used. He emphasized
that personnel services reports often reflected
expenditures for overtime or other types of pay. He added
that departments should inform the legislature how much
funding was needed for overtime, specific letters of
agreement, or contracts, so the legislature could budget
accurately rather than assuming funds would lapse when OMB
reports indicated otherwise. He highlighted that OMB
reported an anticipated lapse of only $1.9 million, which
he believed was implausible given the number of vacant
positions. He asserted that the question should be divided.
He stated that DOA had informed him that it had filled the
chief of information technology position earlier that day.
He noted that he had required DOA to provide evidence that
the position had been filled.
Representative Stapp MOVED to ADOPT conceptual Amendment 2
to Amendment N 19, which would delete page 2 of the
amendment. There being NO OBJECTION, conceptual Amendment 2
to Amendment N 19 was ADOPTED.
Co-Chair Josephson asked for an explanation of the intent
of the conceptual amendment.
Representative Stapp clarified that the conceptual
amendment removed the vacant deputy commissioner position
and the vacant benefits technician position, leaving two
positions remaining.
Representative Hannan noted that page 2 of Amendment N 19
included more than one position with different cost values.
She asked which position had been filled and funded.
Representative Stapp acknowledged the oversight. He stated
that he had mistakenly cut two positions instead of one,
but that the conceptual amendment had already passed and
had deleted page 2. He remarked that he was willing to let
it go for the sake of the argument.
Co-Chair Josephson understood that page 1 of Amendment N 19
referred to a vacant deputy commissioner and a chief
operating officer, while page 2 referred to removing a
vacant technology architecture specialist. The bottom of
page 2 also referenced the removal of a vacant attorney
position. He expressed uncertainty regarding how many
positions were being discussed.
Representative Stapp stated that he would attempt to clean
the amendment up. He asked for a second "bite at the
apple."
Representative Stapp MOVED to RESCIND action on conceptual
Amendment 1 to Amendment N 19.
There being NO OBJECTION, the action was rescinded.
Representative Stapp MOVED to ADOPT conceptual Amendment 2
to Amendment N 19. He explained that the conceptual
amendment would remove only the deletion of the one
position that had been filled by DOA, which was the chief
of information technology position.
Co-Chair Josephson clarified that the conceptual amendment
did not remove a deputy commissioner, a publication
specialist, or an attorney.
Representative Stapp responded that was incorrect. He
requested a brief at ease to write the amendment clearly.
7:06:19 PM
AT EASE
7:07:18 PM
RECONVENED
Representative Stapp MOVED to ADOPT conceptual Amendment 2
to Amendment N 19.
Representative Stapp thanked the committee for the second
opportunity. He explained that page 2 of Amendment N 19
included an allocation for the chief information officer
position within the Office of Information Technology (OIT),
which had been filled. He relayed that the conceptual
amendment would "delete the deletion" of the position from
the underlying amendment.
Representative Hannan remarked that she should have raised
the issue earlier when she first realized there was a
discrepancy. She commented that Representative Stapp
referred to the position as the chief information officer,
but the actual job title was technology architecture
specialist. She emphasized the need to ensure that the
committee was not deleting the chief information officer
allocation.
Representative Stapp confirmed that Representative Hannan
was correct. He explained that the technical title of the
position was technology architecture specialist. He
remarked that the chief information officer would
appreciate the clarification.
Representative Galvin asked whether OIT been consulted. She
sought to understand if the funds for the unfilled position
were being used to contract out the work. She noted that
contracting often occurred with positions that departments
intended to fill but could not, and she emphasized the
importance of understanding whether the funds were
supporting contracted services.
Representative Stapp clarified that the conceptual
amendment would simply prevent the deletion of the
position, and that the broader question about contracting
would relate to the underlying amendment.
Co-Chair Josephson summarized that before the committee was
conceptual Amendment 2 that would maintain the underlying
Amendment N 19 in its current form, except that it would
delete the removal of the vacant technology architecture
specialist, which had been filled. He noted that the change
would result in the elimination of five positions.
7:10:33 PM
AT EASE
7:12:56 PM
RECONVENED
Co-Chair Josephson remarked that he had reviewed the PCN
sheet showing positions that were vacant for greater than
six months. He highlighted that the Public Defender Agency
(PDA) was listed on the sheet as OPA [Office of Public
Advocacy].
Representative Hannan relayed that although she had not
served on the DOA subcommittee that year, she had in the
past. She recalled that OPA worked diligently to hire and
retain attorneys and frequently had to contract out
attorneys. She explained that she could not support the
amendment. She emphasized that when the committee had
passed Amendment 14 and provided unallocated cuts to the
departments, her expectation would have been that vacant
positions would be cut and used as part of the vacancy rate
reduction. She could not support eliminating an expansion
of OPA, which had been hard fought, given the existing
backlog of OPA cases and obligations due to court rulings
involving children and guardianships that required each
child to have an individual attorney. She reasoned that
although the money had not lapsed, it was likely still
needed to meet the obligations. She reiterated that she
would not support Amendment N 19.
Representative Allard expressed her support for the
amendment. She asserted that commissioners who had
testified before the committee had admitted that vacancies
existed and that some of the vacant positions had been used
for overtime. She believed that cutting the positions would
force departments to return to the committee and explain
why the positions were vital. She argued that if the
positions were truly vital, they would have been filled and
active recruitment would have been underway. She also
contended that while it had been suggested that Amendment
14 gave the governor the authority to manage unallocated
cuts, in her six years of experience she did not recall
departments actually cutting vacancies. She insisted that
departments should justify the importance of positions
directly to the legislature and taxpayers. She maintained
that departments had used the money for other purposes. She
remarked that despite asking repeatedly, she had not
received documentation of what the positions were intended
for, except from OMB. Based on OMB's findings, she
concluded that the positions should be eliminated.
7:16:32 PM
Representative Galvin asked if anyone had reached out to
DOA and received a response about the positions. She
explained that she asked because during her own
subcommittee work, she had encountered similar
circumstances where positions were unfilled. She had sought
information from the Alaska Oil and Gas Conservation
Commission (AOGCC) and other agencies to understand the
gaps and vacancies more fully. When AOGCC did not have a
good explanation, a decrement had followed.
Representative Stapp explained that DOA provided the
committee with a report annotating all the PCNs, how many
months the positions had been vacant, whether the
departments were hiring, and administration updates. He
remarked that the reason he had offered a conceptual
amendment was because DOA informed him that it had hired an
individual for the position. He confirmed that he had asked
DOA to prove that the position had been filled, which the
department had done. He recalled that the commissioner of
DNR recently testified that positions were intentionally
left unfilled and that the funds were used for other
purposes. He commented that if the amendment were adopted,
it would force the departments to be more transparent with
the use of money. He agreed with Representative Hannan that
OPA was important, but explained that if the it was
contracting out services, it needed to inform the
legislature that it was doing so rather than reporting that
it was attempting to hire staff. He stressed that the only
way the legislature would know how departments were
actually using their personnel services allocations was if
they were required to show that information in the budget
line items.
Representative Stapp remarked that he always asked the same
questions: where did the money go, and what did the money
do. He stated that if a department needed to contract out a
service, the department needed to disclose it. He
emphasized that part of his goal was transparency. He
pointed out that OMB provided a lapse report showing that
no money would lapse. He relayed that his question was
whether the positions were being hired for or not, and if
not, he argued that the funds should lapse.
[Although not explicitly stated, conceptual Amendment 2 to
Amendment N 19 was ADOPTED.]
7:19:48 PM
Co-Chair Josephson MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Johnson, Stapp, Allard, Tomaszewski, Bynum
OPPOSED: Jimmie, Hannan, Galvin, Foster, Schrage, Josephson
The MOTION to adopt Amendment N 19 FAILED (5/6).
7:20:51 PM
AT EASE
7:21:18 PM
RECONVENED
Co-Chair Josephson MOVED to ADOPT Amendment N 20 (copy on
file):
Agency: Commerce, Community & Econ Dev
Appropriation: Alaska Energy Authority
Allocation: Rural Energy Assistance
Transaction Details
Title: Data Library Administration, Hosting,
Expansion, and Digitization
Section: Section 1
Type: IncOTI
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 250.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 0.0
250.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1219 Engy Tech 250.0
Explanation
Amendment #4 would remove this funding from the
language section of the bill and this amendment will
add it back to the numbers section. The funding will
provide for continued digitization of AEA records to
be added to the online repository.
Last session, AEA received a $200.0 IncOTI for this
data project using AEA Receipts.
Representative Stapp OBJECTED.
Co-Chair Josephson asked to hear from Mr. Painter. He
believed the amendment was essentially a cleanup item and
related to a library system that had been widely used. He
asked Mr. Painter to explain transactionally what the item
entailed.
Mr. Painter responded that the governor's original budget
included a reappropriation of a past appropriation to the
Emerging Energy Technology Fund (EETF) to pay for the
cleanup item in the amendment through a supplemental. He
explained that EETF had historically been repealed and
legally appropriating from a fund that did not exist in
statute made it troublesome for the drafters. However, the
administration indicated that an appropriation was still
needed to release the remaining balance from the fund,
despite its repeal. The best solution was to treat the
appropriation as an FY 26 numbers item using the fund code
for EETF. He explained that the governor's original request
had been for $225,000, but the amount had been increased to
$250,000 in order to capture the entire balance. He
emphasized that the fund was inactive and had been repealed
in statute, and the amendment was intended only to clear
the final balance for the data library project.
Co-Chair Josephson confirmed that it was not an addition by
the legislature but rather a redirection of funds from a
repealed source. He asked Mr. Painter if the $25,000
increase had been his recommendation.
Mr. Painter responded in the affirmative. He explained that
the adjustment had been made in order to ensure the full
balance was captured. He reiterated that the action
achieved the same purpose as the governor's original
proposal but in a different fiscal year, through the
numbers section, and with a modest increase.
Representative Hannan observed that the explanation in the
amendment made reference to Amendment L 4, which she
believed might have been a cutting and pasting error. She
pointed out that the explanation also mentioned that the
Alaska Energy Authority (AEA) had received $200,000 in the
previous session as a one-time increment for the same data
project. She asked if the increment was the previous
attempt to clear the fund that had not succeeded, or
whether it had been a separate situation. She inquired if
the fund still held money. She noted that the source was
not UGF and asked if it represented a fund source swap
rather than a UGF add.
Mr. Painter responded that Amendment L 4 was the previously
discussed language amendment that deleted the governor's
supplemental language. The amendment under consideration
replaced that language with other language with the same
function. He confirmed that the reference to the prior
session's $200,000 increment was intended to show that the
project had been ongoing. He added that AEA receipts
represented another fund code, while the amendment was tied
to a designated general fund code.
7:25:16 PM
[Although not explicitly stated, the OBJECTION was
WITHDRAWN.]
There being NO further OBJECTION, Amendment N 20 was
ADOPTED.
Representative Jimmie MOVED to ADOPT Amendment N 21 (copy
on file).
Co-Chair Josephson OBJECTED for discussion.
Representative Jimmie explained that Amendment N 21 removed
$577,200 and three new full-time positions for a proposed
Office of Entrepreneurship. She argued that the state
should not allocate money to assist individuals in
generating private income. She thought that such an idea
might be appropriate during times of surplus but not under
current fiscal conditions.
Representative Bynum understood that the Office of
Entrepreneurship had been added through the supplemental
process. He recalled that it had not been pending further
action but had already been inserted into the budget. He
asked if his understanding was correct.
Co-Chair Josephson replied that that during the
subcommittee process for DCCED, a member had sought to
create an Office of Entrepreneurship. The item creating the
office had since been removed from the budget, but the
associated funds were not removed. He added that there was
another bill that was currently pending that was topically
similar.
Representative Bynum remarked that he was satisfied with
the explanation. He understood that conforming changes
would be made to the budget if necessary.
Representative Galvin commented that she appreciated the
intent behind the amendment, but she agreed that it was not
the right time for an investment in a new office. She
cautioned that if action was not taken soon, the state
risked continuing in a downward financial spiral.
Representative Tomaszewski observed that future amendments
appeared to restore the item creating the office. He asked
if it was the intention to add the item back in the next
amendment.
7:29:14 PM
AT EASE
7:30:33 PM
RECONVENED
Co-Chair Josephson shared that the Office of
Entrepreneurship was potentially going to be created in a
different committee substitute. He asked to hear from his
staff.
ALEXANDER SCHROEDER, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
explained that N Amendment 22 changed the title from the
Office of Entrepreneurship. He clarified that the amendment
decremented the positions and then restored them under the
title "Add positions to develop and lead efforts to
diversify and grow Alaska's economy." He emphasized that
the goal had not been to eliminate the positions but rather
to retitle them so that the appropriation more accurately
reflected the appropriation.
Representative Tomaszewski asked if the same individuals
would be performing similar work under the new title.
Mr. Schroeder responded in the affirmative.
Co-Chair Josephson explained that the answer to
Representative Tomaszewski's question was that if N
Amendment 21 was adopted, he would withdraw N Amendment 22.
Co-Chair Josephson WITHDREW the OBJECTION.
Representative Stapp OBJECTED. He remarked that he would
likely support the amendment but wanted to clarify that
part of the role of government was to support growth in the
private sector.
A roll call vote was taken on the motion.
IN FAVOR: Hannan, Tomaszewski, Bynum, Johnson, Galvin,
Jimmie, Stapp, Foster, Schrage
OPPOSED: Allard, Josephson
The MOTION PASSED (9/2). There being NO further OBJECTION,
Amendment N 21 was ADOPTED.
Co-Chair Josephson WITHDREW Amendment N 22 (copy on file).
Representative Jimmie did not offer Amendments N 23, 24,
25, and 26 (copy on file).
7:34:54 PM
Representative Stapp MOVED to ADOPT Amendment N 27 (copy on
file). [Due to the length of the amendment, see copy on
file for details.]
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that he was working
department by department through multi-year vacancies. He
relayed that the amendment listed several positions
identified as vacant in the information provided by OMB. He
drew attention to lapse reports from OMB dated March 6,
2025 (copy on file) which also showed that the positions
remained vacant. He pointed out that departments were not
projecting lapses, which he found notable because the funds
were either used to hire personnel or were expected to
lapse. He questioned where the money appropriated for the
positions was going if the positions remained unfilled and
OMB was not projecting a lapse.
Representative Tomaszewski stated that the committee faced
an underfunded budget and emphasized that when positions
remained vacant, it was necessary to be diligent with
available funds. He expressed support for the amendment and
encouraged addressing the issue, which he considered to be
a significant problem.
Representative Johnson remarked that she was experiencing a
sense of "déjà vu." She recalled proposing an amendment to
remove the same position a couple of years prior, but the
position seemed to be returning again because the
department had been unable to fill it. She remembered
commenting at that time that actuaries commanded high
salaries and she had questioned whether the department
would be able to fill the position. She expressed support
for the amendment. She understood the duties had been
contracted out instead of employing a full-time actuary.
She thought it was important to shift some vacant positions
into contract labor or something similar. The current
budget did not seem to reflect what was happening in
practice and she remarked that it was interesting to see
the issue resurface.
Co-Chair Josephson pointed out that much of the funding was
not from the general fund. He asked whether the money for
the utility engineering analyst position under the
Regulatory Commission of Alaska (RCA) would lapse back to
the RCA since it originated from the commission's receipts.
Representative Stapp responded that his assumption was that
RCA receipts would lapse back to the RCA, unless the funds
were part of an interagency transfer. He would defer to Mr.
Painter to provide a clearer answer.
Co-Chair Josephson invited Mr. Painter to address the
question.
7:39:12 PM
AT EASE
7:41:01 PM
RECONVENED
Mr. Painter responded that RCA receipts included carry-
forward language in the operating budget, which allowed any
unspent amounts to carry forward for use in the following
year. He clarified that RCA fees were intended to
approximately equal the cost of regulation and if receipts
were reduced, fees would eventually be adjusted downward.
In the short term, reducing the receipts would likely
result in a greater amount of funds carried forward.
Representative Galvin shared that she had asked the DCCED
commissioner for a clearer explanation of all of the
vacancies. She recalled that the actuary position had been
significant. During a previous committee meeting, the
department strongly expressed to the committee that it
needed the actuary work completed. The department had been
unable to hire someone and had relied on contract work,
which was more expensive. She explained that the department
had been in the process of rebasing the position in order
to change the way the positions were paid. She believed the
same approach had applied to another position as well. She
understood that the commissioner intended to retain the
positions.
Representative Hannan remarked that there were five
positions included in Amendment N 27. Only one of the
positions was funded with general funds, which was within
AOGCC. She acknowledged that there was some general fund
money in the commissioner's office, but the remaining
positions were funded by receipts or statutory designated
fees. She argued that eliminating the positions would
create "chaos" without achieving meaningful savings. She
further commented that because Amendment 14 had already
passed, she did not support adding additional targeted cuts
that removed authority while offering little savings. She
emphasized that only one of the positions was funded with
general funds. She asserted that cutting receipt authority
would not achieve savings but would impair operations.
Co-Chair Josephson agreed that it was concerning that most
departments had not lapsed any significant funds. He
emphasized that Representative Stapp had made a strong case
for transparency and the committee's right to understand
how funds were used.
Representative Stapp stated that, with respect to
Representative Hannan's comments, interagency receipts
likely originated from general funds or designated program
receipts at some point, which was typically how departments
moved money between agencies to fund positions. He
emphasized that eliminating the positions did not actually
cut funds. He stressed that the central issue was
transparency. He reiterated that the legislature funded
departments to hire state employees, and if departments
chose instead to contract out the work, the departments
must communicate the choice to the legislature.
Representative Johnson recalled that she had received a
similar message from the department about the importance of
the actuary position approximately four years earlier.
Co-Chair Josephson MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Galvin, Johnson, Stapp, Allard, Tomaszewski,
Jimmie, Galvin, Bynum
OPPOSED: Hannan, Schrage, Foster, Josephson
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment N 27 was ADOPTED.
7:47:15 PM
Co-Chair Josephson noted that the adoption of Amendment N
21 had the effect of deleting a portion of the language in
Amendment L 2 that Representative Johnson had previously
asked about. He explained that there had been intent
language relating to the entrepreneurship positions, and
those positions would be stricken because of the adoption
of Amendment N 21.
Representative Stapp MOVED to ADOPT Amendment N 28 (copy on
file):
Agency: Commerce, Community & Econ Dev
Appropriation: Community and Regional Affairs
Allocation: Community & Regional Affairs
Transaction Details
Title: Provide Grant Funding for Air Vitalize
Initiatives
Section: Section 1
Type: IncOTI
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 164.0
Miscellaneous: 0.0
164.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1140 AIDEA Div 164.0
Explanation
This one-time increment is meant for the division to
provide grant funds to AirVitalize. This organization
focuses on the issue of air pollution. The
organization states that they are on the shortlist for
the Environmental Protection Agency (EPA) for federal
funding. Once the startup funds are granted, they
should be able to be approved.
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that the amendment provided
a one-time increment of $164,000 through the grants line to
an organization called AirVitalize, utilizing the AIDEA
dividend as the funding source. He elaborated that the
organization reported that it was on the short list for
applying for and receiving an Environmental Protection
Agency (EPA) grant for air quality innovation. He
emphasized that as a resident of Fairbanks, a community
regularly challenged by air quality issues, he believed
that small innovations could meaningfully assist in
addressing air quality challenges.
Representative Hannan remarked that she appreciated the
concept of utilizing AIDEA receipts. She asked whether the
grant would still move forward if AirVitalize did not
receive the federal EPA grant funding. She noted that the
committee had frequently discussed the uncertainty of
federal grants.
Representative Stapp responded that the grant would move
forward regardless of federal funding. He stated that he
had been assured the amendment itself would open additional
opportunities for the organization even without federal
support.
Co-Chair Josephson asked Mr. Painter for clarification. He
stated that AIDEA dividends typically fell into the general
fund and were available for general use. He recalled a
dividend amount of approximately $32 million in prior years
and asked whether the amendment would reduce that amount
slightly.
7:49:59 PM
Mr. Painter replied that the dividend for the current year
was $20 million. He explained that there was language in
the appropriation bill directing any unspent dividend to
lapse to the general fund, meaning that the fund source was
UGF. He stated that it did not materially affect the budget
whether the funds were spent or lapsed because both counted
as UGF.
Co-Chair Josephson recalled that the approximately $32
million was correct for a prior year, when the percentage
had been set between 25 and 50 percent.
Mr. Painter responded that he believed Co-Chair Josephson's
memory was correct.
Co-Chair Josephson asked Representative Stapp if
AirVitalize was located in Fairbanks.
Representative Stapp responded that the organization was
not based in Fairbanks. He described it as an innovative
small startup focused on developing strategies to help
communities facing particulate matter (PM) 2.5 challenges.
Representative Bynum asked what other communities besides
Fairbanks might be affected.
Representative Stapp answered that the impact would depend
on which administration was leading the EPA. He observed
that historically, multiple Alaskan communities had faced
PM 2.5 restrictions. He stated that the Matanuska-Susitna
Valley was on the radar, but Fairbanks remained the most
well-known example because of its long-standing struggles
due to climate and topography. He acknowledged that other
communities were also affected, but he was unable to list
them specifically.
7:52:05 PM
Representative Johnson stated that her district of Palmer
was not at the same stage as Fairbanks, but she was working
to learn as much as possible. She observed that any place
with low-lying land and wood stoves became increasingly at
risk. She expressed hope that Fairbanks would set an
example and determine how to manage compliance so that the
federal government would not need to intervene. She added
that she did not know whether the amendment would have any
direct impact on her district.
Representative Galvin asked Representative Stapp to clarify
what the $164,000 would purchase. She asked if it would
fund one large outside air filter for an entire city, if it
would apply to individual houses, and what level of
certainty there was regarding the effectiveness of the
technology.
Representative Stapp responded that the purpose of the
amendment was to provide AirVitalize with a seed grant to
pursue innovative research and proof-of-concept strategies
to mitigate PM 2.5. He emphasized that the funding would
not purchase air filters to distribute around a community,
but if such a measure would assist in alleviating EPA
restrictions, he would consider offering it as an amendment
as well.
7:54:12 PM
Co-Chair Schrage understood that the implication was that
if current trends continued to be the same as they were
under the President Biden administration, EPA policies
would remain the same. He expressed uncertainty whether the
implication was correct. He asked whether AirVitalize was a
for-profit or nonprofit organization.
Representative Stapp responded that he was not sure.
Representative Bynum asked why the AIDEA dividend had been
chosen as the funding source.
Representative Stapp responded that given the nature of the
budget, he believed there would be little interest in using
general fund dollars, which was why he had selected the
AIDEA dividend as a somewhat unconventional source. He
acknowledged that Co-Chair Josephson had quickly pointed
out that the dividend was ultimately deposited into the
general fund.
7:55:43 PM
AT EASE
7:58:58 PM
RECONVENED
Co-Chair Josephson MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Tomaszewski, Stapp, Schrage
OPPOSED: Hannan, Bynum, Jimmie, Galvin, Johnson, Allard,
Foster, Josephson
The MOTION to adopt Amendment N 28 FAILED (3/8).
Representative Stapp MOVED to ADOPT Amendment N 29 (copy on
file):
Agency: Commerce, Community & Econ Dev
Appropriation: Community and Regional Affairs
Allocation: Community & Regional Affairs
Transaction Details
Title: Reduce Grant Funding to Alaska Legal Services
Section: Section 1
Type: Dec
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: -100.0
Miscellaneous: 0.0
-100.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund -100.0
Explanation
Alaska Legal Services receives 10% of the total filing
fees collected from the Alaska Court System as
provided in statute for the Civil Legal Services Fund
(1221). In FY 24, that amount was increased to 25% in
the final version of the budget. However, Alaska Legal
Services also receives a grant of $400,000 from UGF
from the Community & Regional Affairs Division. This
amendment seeks to reduce that amount by $100,000.
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained the amendment. He noted that
the committee had previously discussed Alaska Legal
Services (ALS) and how it received funding. He relayed that
the amendment reduced the grants ALS received every year
from the state by $100,000. The intent was for the funding
source to ultimately be the Civil Legal Services Fund
(CLSF). He remarked that it was "fairly sloppy" to provide
ALS with funds in the base budget in the grants line and
then also provide ALS with funds from CLSF. He added that
if the amendment passed, he would be willing to look at
increasing the bill's allocation from CLSF by an equivalent
amount.
Representative Hannan stated that she opposed the
amendment. She thought that there had been an error in the
explanation section of the amendment. She emphasized that
ALS had only received 10 percent the previous year, not 25
percent. She recalled that HB 161 [proposed in 2024] would
have increased the allocation to 25 percent, but the bill
did not pass and the allocation was 10 percent. She noted
that the historical document distributed to the committee
(copy on file)[including a chart titled "Alaska Legal
Services Corporation Funding History] showed that the
state had provided a general fund appropriation in most
years, with the exceptions of 2006, 2007, and 2008. She
explained that CLSF had been intended as an attempt to
stabilize funding, but it was her understanding that it
could not be drawn upon exclusively by ALS because other
entities also had the legal right to access it. She
stressed that ALS was important and needed to remain funded
at a level sufficient to serve Alaskans in poverty who
required legal representation.
Representative Allard remarked that the amendment had
previously come before the House Judiciary Committee, where
she had examined the issue in detail. She recounted that
she had received numerous complaints regarding the legal
services provided by ALS. She asserted that some
individuals who should have been evicted from their homes
had taken advantage of the system, leaving landlords
responsible for costs of seven to nine months of rent
before eviction proceedings concluded. She argued that many
people had misused the system and she would not support the
amendment. She maintained that ALS needed to operate like
most nonprofit organizations and raise funds from outside
sources rather than depending on government support.
Co-Chair Josephson commented that he understood ALS was a
federal entity.
Representative Johnson recalled that something had changed
the previous year regarding the funding structure, although
she could not recall the details. She asked whether the
allocation had increased to 25 percent as suggested in the
amendment, or whether something else had occurred.
Co-Chair Josephson explained that in the previous session,
he recalled telling then House Speaker Representative Cathy
Tilton that HB 161 was a good bill and he had asked to hear
it on the House floor. He noted that the clock "ticked
away" and the bill was not heard in time. He asked if it
was Representative Hannan's bill.
8:04:04 PM
Representative Hannan replied that HB 161 had not been her
bill. She suggested that it might have been rolled into
another bill, but she confirmed that it had been
anticipated in the budget as if it were going to pass. She
explained that when the bill did not pass, the allocation
was reduced back.
Representative Johnson asked Mr. Painter to clarify the
details. She remarked that it seemed that money had been
placed into the base budget, and she wanted clarification
on the exact amount.
Mr. Painter responded that Representative Johnson's
recollection was correct in that there was a change in
CLSF. He explained that the CLSF portion had previously
been included in the language section of the budget but had
been moved into the numbers section the prior year. He
stated that the change had not altered the total amount,
only the method of funding.
Representative Johnson asked what the total funding amount
was.
Mr. Painter responded that he did not recall.
Representative Johnson explained that she was trying to
clarify if there had been any increase in the base amount.
She reiterated that she recalled a change but could not
remember the exact figure. She noted that ALS had requested
an increase from 10 percent to 20 percent for many years,
but the request had never been approved. She questioned
whether there was a compelling reason to approve the
increase in the current year.
Co-Chair Josephson recalled that the bill had been
scheduled to be heard on the House floor in the prior year
and it was anticipated that the bill would be adopted, but
the legislative session had ended at midnight before action
could be taken.
8:06:24 PM
ROB CARPENTER, DEPUTY DIRECTOR, LEGISLATIVE FINANCE
DIVISION, explained that the total amount in the budget for
ALS included approximately $326,000 from CLSF and an
additional $400,000 from the general fund within the
Division of Community and Regional Affairs (DCRA) under
DCCED. He stated that the total amount was more than
$700,000.
Representative Johnson asked if the two amounts would
remain the same or if an additional 15 percent would be
added on top of the 10 to 25 percent.
Co-Chair Josephson clarified that the amendment reduced the
total to $300,000.
Representative Galvin relayed that she would not be
supporting the amendment. She emphasized that the matter
extended beyond homeowners or landlords not receiving rent
payments. She reminded the committee that it had heard
testimony from individuals working in the domestic violence
and sexual assault field who described the importance of
the services for many women. She shared that the ALS had
existed since 1967 and noted that her mother had used its
services. She underscored her strong feelings about
recognizing the broader scope of the organization's work.
She thought that a long waitlist was concerning, as it
meant that many people were not receiving assistance. She
shared that her husband had used similar services to
recover his security deposit when he was a college student.
She stressed that many individuals faced unfair treatment
and needed affordable legal services and that ALS performed
excellent work.
Representative Allard remarked that she believed the
program could be cut and noted that it was a 501(c)(3)
organization. She asserted that nonprofits needed to align
with their communities and raise their own funds rather
than relying on government support.
Representative Bynum asked whether there had been
incremental changes in funding between FY 24, FY 25, and FY
26.
Mr. Carpenter responded that there had not been an increase
to his knowledge. He noted that there had been attempts in
recent years, including an increment in FY 24 that was
vetoed by the governor, but there had been no change in
funding in the previous year.
Representative Bynum remarked that the program had been
flat funded.
Representative Stapp explained that the amendment was a
targeted cut, though he acknowledged that targeted
reductions were not typically preferred. He observed that
the legislature often preferred to pass decisions along to
the executive branch. He believed that it was more
efficient to rely on a dedicated fund such as CLSF. He
relayed that the organization currently received $400,000
in general funds through the grants line in the base
budget. He suggested that HB 161 could likely have passed
the previous year if time had not run out. He argued that
it created confusion from a budgetary perspective to
maintain appropriations from both the general fund and a
specialty fund. He indicated that if the legislature were
serious about making cuts, it should begin aligning fund
sources so that future legislators could clearly understand
where money originated and how it was used.
Co-Chair Josephson MAINTAINED the OBJECTION.
8:11:33 PM
A roll call vote was taken on the motion.
IN FAVOR: Tomaszewski, Stapp, Allard
OPPOSED: Jimmie, Johnson, Hannan, Galvin, Bynum, Foster,
Schrage, Josephson
The MOTION to adopt Amendment N 29 FAILED (3/8).
8:12:24 PM
Representative Stapp MOVED to ADOPT Amendment N 30 (copy on
file). [Due to the length of the amendment, see copy on
file for details.]
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that the amendment removed
$1.1 million from DEC's air quality allocation and
redirected the money to be used for reimbursement for
property owners subjected to the Division of Air Quality's
(DAQ) energy certification mandates. He recalled that DEC
required energy rating inspections for home sales in
Fairbanks and the Interior. He estimated the burden on the
community to be about $1.1 million for the inspections,
which no other part of the state was required to pay. He
expressed the hope that DEC would assume the burden.
Co-Chair Josephson asked if the issue was specific to
Fairbanks.
Representative Stapp responded that it was a state mandate
imposed by the department. He referred to earlier
discussion of PM 2.5 and explained that homeowners in the
containment area in the Interior were required to pay for
private energy ratings whenever a home was sold. He stated
that the requirement increased costs for sellers and
reduced profits. He argued that since the mandate
originated from DEC, the department's services line should
be reduced by $1.1 million to create reimbursable grants
for affected homeowners.
Co-Chair Josephson observed that the requirement appeared
to apply only to Fairbanks residents because of the PM 2.5
problem, while residents of Juneau were not subject to the
same mandate.
Representative Stapp confirmed that no other community was
required to pay the same costs.
Representative Allard asked who within DEC recommended or
pushed for the requirement.
Representative Stapp responded that it was part of the
state-managed mitigation plan for the non-attainment area
in Fairbanks. He questioned the validity of the connection
between energy ratings and air quality pollution. He
reiterated that if the state required his constituents to
pay a cost that no one else faced, the state should provide
a mechanism for reimbursement.
Representative Allard asked if Representative Stapp knew
the PCN number.
Representative Stapp declined to answer.
8:15:51 PM
Representative Galvin asked for more information about the
cost of an energy rating, how many certifications were
required per year, and what calculations were used to reach
the $1.1 million estimate. She asked which services DEC
would stop providing if funds were redirected.
Representative Stapp responded that according to the
department's FY 24 actuals, the amount came from the
allocation inside the result delivery unit (RDU) component,
which covered supplies, copiers, and similar expenditures.
He noted that the actuals were about $1.5 million off from
the department's budget, which indicated to him that the
actual expense in the line item had not been sufficient for
what was budgeted. He concluded that about $1.1 million was
left over to reimburse residents of the Interior for energy
inspections. He thought the calculations were simple
because inspections cost a homeowner about $900, and by
multiplying that by the average number of homes sold each
year in the Interior, the result was about $1.1 million.
Representative Galvin commented that apparently some of the
funds allocated for supplies and copiers had not been used.
She asked whether the funding would normally go back to UGF
or if it could be used to pay for extra certifications.
Representative Stapp replied that his understanding was
that appropriated money had to remain in its line item, but
he suggested that Mr. Painter might need to clarify.
8:18:26 PM
Mr. Painter responded that he had reviewed the actuals for
FY 24 for the allocation in question. He clarified that
different fund sources were involved, including 1004
general funds, which were not used for funds matching. He
stated that the funds primarily related to increments
received in FY 24 for creating a plan for Fairbanks air
quality containment. He reported that the final budget for
non-match UGF was $1,914,800, and actual expenditures were
$1,913,600. He explained that the department had spent all
but $1,200 thousand of its non-match UGF. He added that
while the department may have lapsed other fund sources,
such as federal authority, but the department did not lapse
significant amounts of general funds in FY 24.
Representative Bynum asked what other mechanisms were in
place to stop the activity from happening.
Representative Stapp asked Representative Bynum to clarify
what he meant.
Representative Bynum understood that the mandate forced
homeowners to comply and it only impacted residents in
Representative Stapp's community. He asked what measures
outside of the amendment would need to be taken to stop the
requirement.
Representative Stapp responded that his hope was that
budgetary motivation might influence the department's
appeal process with the EPA.
Representative Bynum asked what capacity the department had
to establish, operate, and maintain a grant or rebate
program if the amendment were to pass. He questioned
whether the department had explored how grants could be
administered to homeowners.
8:21:33 PM
Representative Stapp replied that when the legislature
established grants, sometimes allocations were sent to
other departments for management. He remarked that the
department had not appeared concerned about Fairbanks
homeowners' ability to pay for inspections when it imposed
the mandate. He expressed that he hoped the legislature's
intent would be sufficient to ensure the department
determined how to administer the program.
Representative Galvin stated that she understood
Representative Stapp's frustration. However, she could not
support the amendment because all but $1,200 of the
available funds had been spent. She explained that the
exception was the federal grants, which would have been
more complicated to use because the grants were tied to
specific rules and guidelines.
Representative Allard asked how many Alaskans were actually
impacted.
Representative Stapp responded that there were a little
under 100,000 people living in FNSB. He noted that not
everyone lived in the containment area, and he estimated
that around 50,000 people were likely impacted. He
clarified that the containment area was not the entirety of
the borough.
Representative Allard asked if DEC was specifically
targeting Fairbanks and nowhere else, and if so, whether it
meant individuals would be expected to afford an additional
fee.
Representative Stapp replied that the inspections cost
about $900. He explained that the argument for the
inspection was that it was intended to improve air quality,
but he maintained that energy ratings were not relevant to
air quality. He asserted that if the state compelled his
community to undergo such inspections, DEC should cover the
costs rather than residents of his community.
8:24:15 PM
Representative Allard asked what would happen if a resident
received a one-star or two-star energy rating, such as in
the case of drafts blowing through windows, and what DEC
expected people to do if they were given a low rating.
Representative Stapp replied that the rating itself did not
matter. He explained that the requirement was simply to
obtain an energy rating when selling a house, regardless of
the score.
Representative Hannan clarified that the amendment would
remove money from the DEC budget, but it would be
administered through a grant program at DCCED. She
explained that the issue was that a new grant program
needed to be created. She asked whether the amendment
allowed sufficient time and resources to create a new
program.
Representative Stapp responded that the amendment would
take money from the DEC allocation and move it to DCRA,
which was the appropriate location for direct grant lines.
He stated that residents of Fairbanks had not been asked if
they could afford the inspections. He added that he had not
asked the department how it would reimburse residents
because his intent was to require the department to do so,
just as residents had been required to pay for the
inspections.
8:26:37 PM
Representative Bynum thought that if the amendment passed,
it would be important to inform Fairbanks residents that
AHFC also provided an energy rating and grant program. He
added that there were qualifications for the grant program
that should be considered when the department implemented
its own program. He highlighted that another agency within
the state conducted similar work, but for a select group of
people.
Representative Tomaszewski remarked that the inspection
requirements represented an egregious overreach of
government in the lives of the people of Fairbanks. He
emphasized that the issue involved not only money but also
time. He explained that during the process of selling a
home, time could jeopardize a sale, and scheduling an
energy rater while complying with additional requirements
created significant problems for homeowners. He stressed
that the mandate was an excessive use of government power
and expressed full support for the amendment. He was a
former energy rater, and he thought the process was
invasive, especially considering that a rater would be
required to enter a home without true permission of the
homeowner simply because it was mandated. He thought the
requirement contradicted American principles and urged that
the committee send a strong message that it was not the way
to treat the people of any community.
8:28:58 PM
Representative Stapp thought the committee had discussed
the issue in depth. He reiterated that he intended to
follow up with Mr. Painter regarding the discrepancy
between OMB's reported actual expenditures and the
management plan. He clarified that he had not claimed that
money had lapsed, only that there was a difference between
the expenditures, the FY 26 management plan, and the FY 26
adjusted plan. He stressed that the government should make
an effort to consult Alaskans and assist them in meeting
the mandate rather than impose it outright. He urged
support for the amendment.
Co-Chair Josephson asked whether the requirement stemmed
from the PM 2.5 issue and if the inspection was intended to
gather data for another purpose.
Representative Stapp responded that he did not know the
full intent, but he confirmed that it involved issues with
PM 2.5.
Co-Chair Josephson MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Tomaszewski, Stapp, Allard, Jimme, Johnson,
Hannan, Galvin, Bynum, Foster, Schrage, Josephson
OPPOSED: None
The MOTION PASSED (11/0). There being NO further OBJECTION,
Amendment N 30 was ADOPTED.
8:31:29 PM
AT EASE
8:40:47 PM
RECONVENED
Representative Hannan MOVED to ADOPT Amendment N 31 (copy
on file). [Due to the length of the amendment, see the copy
on file for further details.]
Co-Chair Josephson OBJECTED for discussion.
Representative Hannan explained that the amendment removed
funding that had been added to the budget in FY 21 for five
office assistant positions that were tasked with
photocopying inmate mail. She acknowledged that there might
have been more employees doing the job, but there were five
positions identified in the budget that were defined as
performing the task. She stated that the amendment reduced
the DOC budget by $69,300.
Representative Stapp asserted that the total funding amount
was incorrect. He explained that he had been looking at one
of the positions and thought that the total amount was
$372,000. He remarked that he had either missed the
positions when examining the vacant position list or the
positions were filled. He asked if the positions had been
filled.
Representative Hannan replied that the answer was unclear
because the positions were funded as photocopier positions,
but there were no employees whose jobs consisted of
photocopying and no other duties.
Co-Chair Josephson asked if it was for incoming or outgoing
mail.
Representative Hannan responded that she did not know.
Co-Chair Josephson asked if Representative Hannan knew what
the purpose of the task was.
Representative Hannan responded that the purpose was to
restrict smuggling contraband through the mail.
Representative Galvin added that she was familiar with the
concept. She had visited six different prisons and learned
that the practice had been to copy all incoming mail and
provide inmates with copies due to concerns about
contraband coming into the prisons. She explained that the
concern was that the paper or the ink might have been used
to smuggle contraband. She noted that there had been no
examples of smuggling happening, and her staff had
researched the issue and found that contraband did not
usually come through the mail on a national level. She
stated that she understood why Representative Hannan
proposed removing the positions because it was difficult to
track whether the practice had been helpful. She added that
she had heard from inmates who expressed concern about the
practice because they had been unable to receive original
copies of artwork from their children.
8:44:10 PM
Representative Bynum remarked that although he wanted to
increase efficiencies in DOC and other departments, the
amendment seemed like a significant change. He stated that
he wanted to learn more about the potential impacts before
supporting the change.
Representative Tomaszewski asked how much mail came in and
out of correctional facilities. He thanked Representative
Hannan for bringing forward the decrement because every
dollar saved was helpful.
Representative Johnson asked if the issue was related to
drugs being smuggled into prisons in the mail. She recalled
that there had been a presentation from DOC a few years
earlier when the department requested funding for
photocopiers and related positions, which the legislature
did not approve. She thought she had seen somewhere that
the department proceeded with the practice regardless.
Representative Hannan explained that Representative
Johnson's comments had been the impetus for the amendment.
She recounted that when the department first requested
funding for the program, the assertion had been that
photocopying would stop drugs from entering prisons. She
emphasized that the legislature had not approved the money
or the positions, yet the department implemented the
program anyway. When DOC was asked if drug smuggling had
been reduced, the answer had been that smuggling rarely
happened through the mail. She asserted that money
appropriated to DOC should have been directed toward the
explicit and focused goals of corrections. While the cost
for the program was not large, the overall department
budget was significant. She noted that there had initially
been concerns regarding the handling of legal
correspondence. She explained that legal correspondence
could not be opened or photocopied, which had slowed the
process of getting communications to inmates.
Co-Chair Josephson observed that Representative Hannan had
stated the program was not funded, yet it was being cut. He
asked for clarification.
Representative Hannan responded that the department had
managed to absorb the cost within its budget without
explicit authorization.
A roll call vote was taken on the motion.
IN FAVOR: Allard, Tomaszewski, Galvin, Jimmie, Hannan,
Johnson, Foster
OPPOSED: Bynum, Stapp, Schrage, Josephson
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment N 31 was ADOPTED.
Representative Hannan did not offer Amendment N 32 (copy on
file).
Representative Jimmie did not offer Amendments N 33, 34,
35, or 36 (copy on file).
8:49:47 PM
Representative Bynum did not offer Amendment N 37 (copy on
file).
Representative Stapp MOVED to ADOPT Amendment N 38 (copy on
file):
Agency: Corrections
Appropriation: Population Management
Allocation: Statewide Probation and Parole
Transaction Details
Title: Facilitating Efficiencies in the Department
Wordage Type: Intent
Linkage: Allocation - Statewide Probation and Parole
Wordage
It is the intent of the legislature that funding be
transferred from other allocations in Population
Management in a manner that adequately funds the
Statewide Probation and Parole allocation.
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that although Amendment N 38
was slightly out of order, he still wanted to offer it. He
clarified that he had a later amendment to close a prison
and that Amendment N 38 was an intent language amendment.
He explained that Amendment N 38 would add language to
allow funding to be transferred from other allocations
within population management to adequately fund state
probation and parole. He remarked that it made more sense
to attempt to cut the prison first before moving intent
language.
Co-Chair Josephson asked if Representative Stapp knew which
later amendment he was referring to.
Representative Stapp responded that it was Amendment N 41.
Co-Chair Josephson asked if Representative Stapp would
withdraw Amendment N 38 so that the committee could first
discuss Amendment N 41.
Representative Stapp WITHDREW Amendment N 38.
Representative Stapp MOVED to ADOPT Amendment N 41 (copy on
file):
Agency: Corrections
Appropriation: Population Management
Allocation: Statewide Probation and Parole
Transaction Details
Title: Reduce Funding for Population Management to
Address Efficiencies at Institutions
Section: Section 1
Type: Dec
Line Items (Amounts are in thousands)
Personal Services: -19,231.0
Travel: -226.0
Services: -98.0
Commodities: -345.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 0.0
-19,900.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund -19,900.0
Explanation
The FY25, the Legislature provided intent language to
the Department to prepare a report that analyzed the
possibility of closing an institution with the goal of
cost-savings. Since the Department has failed to
provide such analysis, this amendment aims to defund
almost the entire allocation for Statewide Probation
and Parole. Since Departments have the authority to
move funds between allocations, the Department has the
opportunity to facilitate the shutdown of an
institution in order to fund this allocation.
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that Amendment N 41 would
close a prison and was a decrement of $19.9 million. He
reminded the committee that in the prior year, intent
language had been added to the budget to direct DOC to
evaluate whether cost savings could be achieved through the
closure of a prison and the consolidation of the staff and
prisoners. He recalled that Mr. Painter had previously
indicated that the department had not fulfilled the
requirements of the intent language. He explained that the
committee had requested DOC to provide a detailed report to
determine whether closing a prison would truly save money.
Since the department had not provided the information, he
believed the legislature should attempt to close a prison.
8:52:45 PM
Co-Chair Josephson asked if the purpose of the amendment
was to ensure that statewide parole and probation remained
funded in the event of a prison closure. He highlighted
that the amount associated with the amendment was
approximately $19.9 million.
Representative Stapp responded that it was the purpose of
the earlier intent language [Amendment N 38]. He clarified
that he had not named a specific prison in the amendment
because such specificity often provoked opposition from
communities. He relayed that his intent was not to target a
particular facility, but rather to eliminate funding for
one prison and instruct the department to determine which
one to close.
Co-Chair Josephson noted that his only concern was that
that he had never sat on the DOC subcommittee, and he did
not know if the prison population had reduced enough to
warrant a closure. He noted that the Palmer Correctional
Center had previously been closed and later reopened. He
explained that he could not support the amendment without
more information.
8:54:29 PM
Representative Hannan remarked that while she appreciated
the intent, the DOC subcommittee had already recommended a
renewed request for a detailed analysis of prison closure
options. She explained that the number of beds and
prisoners could not be viewed in isolation because
different classifications of inmates required different
housing. For example, unsentenced prisoners could not be
housed with sentenced prisoners, and maximum-security
inmates could not be mixed with medium-security inmates. In
addition, two maximum-security inmates sometimes could not
be placed in the same facility. She emphasized that without
a thorough analysis, the legislature could not responsibly
make a policy decision to close a prison.
Representative Hannan continued that it was unclear whether
closing a facility would save money because additional
costs might arise if more expensive beds were required
elsewhere. She cautioned that poor planning could also lead
to litigation if incompatible inmates were forced to be
housed together. She could not support the amendment but
believed DOC should take the number of budget amendments
concerning its operations seriously. She noted that the
high number of DOC-related amendments demonstrated that
there was legislative concern over the department's growth.
Representative Bynum asked whether the legislature had
received an explanation from DOC on the status of the
request for the report.
Co-Chair Josephson understood that the report was
inadequate.
Representative Stapp replied that he was not sure if the
committee needed to rehash the point. He explained that the
legislature had included intent language that instructed
the department to provide information that it did not
provide.
8:57:32 PM
A roll call vote was taken on the motion.
IN FAVOR: Johnson, Allard, Tomaszewski, Stapp, Bynum
OPPOSED: Hannan, Jimmie, Galvin, Foster, Schrage, Josephson
The MOTION to adopt Amendment N 41 FAILED (5/6).
Representative Stapp WITHDREW Amendment N 38. [N Amendment
38 had already been withdrawn.]
Representative Bynum did not offer Amendment N 39 (copy on
file).
Representative Stapp MOVED to ADOPT Amendment N 40 (copy on
file). [Due to the length of the amendment, see the copy on
file for further details.]
Co-Chair Josephson OBJECTED for discussion.
Representative Stapp explained that the amendment followed
the same idea he had mentioned earlier to examine vacant
positions in every department. He noted that there were
positions that had been vacant for two or more years within
different allocations, but mainly in DOC. He added that the
total value of the cuts was approximately $2.9 million in
vacancies. He noted that OMB's lapse report for DOC was
zero, even though there were vacant positions that had not
been filled. He indicated that it was difficult to
understand how the department continued to claim that no
money would lapse when there were spreadsheets of vacant
positions.
9:00:07 PM
Representative Galvin asked if Representative Stapp had
talked with DOC about the vacancies. She agreed that the
overtime costs were frustrating. She recalled that DOC had
testified that it had applicants for the vacant positions,
but the applicants were not qualified. She remarked that
while the department likely wanted to hire people, it had
not done so. She asked Representative Stapp if the
department had told him directly that it was not attempting
to fill the positions. She also asked if there were legal
requirements to maintain a certain number of staff per
inmate. She suggested that it would be helpful to hear from
legal counsel or someone with expertise on the
requirements. She understood that overtime expenses were
extremely high and thanked Representative Stapp for
offering the amendment.
Co-Chair Josephson asked if the removal of an "MTSL
journeyon page 3 of the amendment referred to a
journeyman position.
Representative Stapp replied that he had a large
spreadsheet he could reference and he could provide an
answer if the committee went at ease for a moment.
Co-Chair Josephson declined. He understood that the
amendment would remove mental health clinicians,
psychiatric nurses, probation officers, maintenance
superintendents, and correctional officer positions,
although he understood that many were unfilled. He asked if
there were any other questions. He added that this would be
the last amendment of the evening. [He later corrected this
statement.]
Representative Hannan remarked that she could not support
the cuts. She explained that of all the agencies, DOC was
one where many of the positions were mandated by law. She
emphasized that the state had legal obligations to provide
services and supervision of inmates, and vacancies required
overtime. She noted that when the positions were filled,
the budget would actually decrease. She thought it was
similar to the public health sector in that it was
difficult to retain employees such as dental hygienists,
yet the services still had to be provided, either through
paying overtime or contracting the positions out. She
stressed that in DOC, staffing ratios were mandated and
overtime levels were significant. She added that the DOC
subcommittee had spent considerable time examining the
issue and was requesting additional details in the hope of
identifying more targeted reductions. However, she could
not support the amendment because it would only create
further legal and functional problems for the department.
Co-Chair Josephson corrected himself and noted that the
committee had one additional amendment and would proceed to
Amendment N 43.
Representative Stapp explained that there were many
examples of vacant positions within DOC, and some had been
vacant for two to three years. The duties of the vacant
positions were performed through overtime. He noted that
the positions were posted on Workplace Alaska. For example,
there was a correctional officer position at Spring Creek
Correctional Center in Seward that had been vacant for one
to two years. The position was posted on Workplace Alaska
and the duties were covered through overtime. The duties of
other vacant positions were performed by a contractor while
the position remained posted and under recruitment. He
noted that there was a long list of examples.
Co-Chair Josephson MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Bynum, Stapp, Johnson, Allard, Tomaszewski
OPPOSED: Hannan, Jimme, Galvin, Schrage, Foster, Josephson
The MOTION to adopt Amendment N 40 FAILED (5/6).
9:06:12 PM
Representative Stapp did not offer Amendment N 42 (copy on
file).
Representative Jimmie MOVED to ADOPT Amendment N 43 (copy
on file):
Agency: Education & Early Dev
Appropriation: Education Support and Admin
Allocation: Student and School Achievement
Transaction Details
Title: Restore Funding for Alaska Native Science and
Engineering Program
Section: Section 1
Type: Inc
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 1,000.0
Miscellaneous: 0.0
1,000.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund 1,000.0
Explanation
ANSEP funding was reduced in subcommittee. The
proposed cuts would lead to:
- 20% reduction in ANSEP student enrollment
- Cancellation of Nome Acceleration Academy
- Layoff of 11 staff positions
- Reduce student scholarships and support
- Stifle community partnerships
ANSEP is a cost-effective way to prepare students for
and ensure student success in the university
environment. The longitudinal model it has developed
is especially critical for students from rural and
remote areas of the state. Per-credential, the program
is less expensive than a traditional university
education.
Co-Chair Josephson OBJECTED for discussion.
Representative Jimmie explained that the amendment restored
funding for the Alaska Native Science and Engineering
Program (ANSEP), which had been cut in the subcommittee
process. She emphasized that the program transformed lives
and provided proven pathways for rural students to become
engineers, scientists, and leaders. The program also helped
students build confidence, connect students to careers, and
kept talent in Alaska. She asserted that ANSEP met a true
need in the workforce. She explained that the ANSEP request
was paired with a decrement in N Amendment 50, which she
would offer later. She remarked that spending $1 million
without a responsible offset was not smart fiscal policy,
and she took the responsibility seriously.
Co-Chair Josephson WITHDREW the OBJECTION.
Representative Bynum OBJECTED. He remarked that he had
heard excellent reports about the program and thought that
the educational opportunities it offered was exactly what
Alaska needed. He asked whether the proposed restoration to
ANSEP's prior level of funding was sufficient for the
program as it operated or if more funding would be
advantageous if the program expanded. He asked if there
would be opportunities for growth.
Representative Jimmie responded that the program had been
fully funded before being cut by $1 million. She relayed
that another funding source had been identified to restore
the $1 million.
Co-Chair Josephson asked if Representative Jimmie was
suggesting funding beyond the $1 million restoration.
Representative Bynum asserted that he valued educational
programs and emphasized that he remained passionate about
increasing educational opportunities in Alaska. He
expressed interest in considering additional funding in the
future.
Representative Bynum WITHDREW the OBJECTION.
Co-Chair Josephson OBJECTED for discussion.
Co-Chair Foster explained that ANSEP had invited him to
visit earlier in the year. At the time of his visit, the
program had been pursuing a $1 million increment and its
leaders were surprised to discover that the subcommittee
had reduced the funding by $1 million instead. He clarified
that N Amendment 43 merely restored the reduction, rather
than providing new funding. He added that program leaders
had indicated interest in expansion, which had been part of
the reason it invited him to visit. He emphasized that
there had been genuine interest in growth.
9:10:36 PM
Co-Chair Josephson WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment N 43 was
ADOPTED.
Co-Chair Josephson WITHDREW Amendment N 44 (copy on file).
9:11:21 PM
AT EASE
9:11:42 PM
RECONVENED
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 announced that the following morning's
9:00 a.m. meeting was cancelled. He reviewed the schedule
for the following afternoon.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 53 Amendment 19 document Stapp 033635.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 53 |
| HB 53 Conceptual Amendment 1 to Amendment 14 Schrage 032525.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 53 |
| HB 53 Amendment 29 Document 032625.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 53 |
| HB 53 Conceptual Amendment to Amendment 5 Josephson 032625.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 53 |
| HB 53 Amendment 5 Backup Stapp 032625.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 53 |
| HB23 Human Rights Commission presentation for HFIN 3-25.pptx_PageNumbersAdded.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 23 |
| HB 53 HB 55 ACTIONS on AMENDMENTS by 032625.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 53 |
| HB 53-HB 55 OP.MH Amendments 14-96 032625.pdf |
HFIN 3/26/2025 1:30:00 PM |
HB 53 HB 55 |