Legislature(2025 - 2026)ADAMS 519
04/03/2025 09:00 AM House FINANCE
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| Audio | Topic |
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| Start | |
| HB53 || HB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 54 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 53 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 3, 2025
9:06 a.m.
9:06:34 AM
CALL TO ORDER
Co-Chair Josephson called the House Finance Committee
meeting to order at 9:06 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative DeLena Johnson
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
SUMMARY
HB 53 APPROP: OPERATING BUDGET; CAP; SUPP
HB 53 was HEARD and HELD in committee for further
consideration.
HB 54 APPROP: CAPITAL/SUPPLEMENTAL/FUNDS
HB 54 was SCHEDULED but not HEARD.
HB 55 APPROP: MENTAL HEALTH BUDGET
HB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson reviewed the meeting agenda. The
committee would continue to take up operating budget
amendments.
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."
9:07:12 AM
Co-Chair Schrage MOVED to ADOPT Amendment 15 (copy on
file):
Agency: Administration
Appropriation: Centralized Admin. Services
Allocation: Retirement and Benefits
Transaction Details
Title: Delete Previously Added Retirement Tech 2
Position
Section: Section 1
Type: Dec
Line Items (Amounts are in thousands)
Personal Services: -93.6
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 0.0
Total: -93.6
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund -3.1
1017 Group Ben -29.8
1023 FICA Acct -0.9
1029 PERS Trust -42.0
1034 Teach Ret -16.1
1042 Jud Retire -0.5
1045 Nat Guard -1.2
Explanation
The subcommittee, after hearing about the intensive
workload of the Division of Retirement and Benefits,
added a Tech 2 Position to provide assistance during
peak processing times and allow for better workload
distribution. The department did not request this
addition.
Representative Stapp OBJECTED.
Co-Chair Schrage explained that the amendment would delete
a previously added retirement 2 technician. He detailed
that during the summer, retirement technicians processed
many retirement forms as a result of teachers retiring and
otherwise. The position was added during the subcommittee
process to try to cut down on processing times. The
amendment was in recognition of the state's fiscal
situation. He remarked that while the position had a very
small unrestricted general fund (UGF) impact, he was
proposing to remove the addition in order to match the
state's fiscal reality.
Representative Stapp remarked that the fund sources for the
position were varied. He asked if the amounts defaulted
back into the original fund sources or if they flowed into
the general fund.
Co-Chair Schrage responded that the funding would flow back
into the original fund sources. He detailed that because
the position was utilized to process retirements, it was
funded with various retirement accounts. There were
constraints on what the funds could be used for, and they
would not flow back into UGF.
9:08:57 AM
Representative Bynum stated his understanding the position
had been added because there was a need within the
department [Department of Administration (DOA), Division of
Retirement and Benefits] to deal with personnel issues,
specifically retirement and benefits. He did not want to
interrupt retirement and benefits services. He remarked
that the legislature continually talked about having
struggles with personnel and personnel management
throughout the state. He believed the item had been added
in the first committee substitute [for HB 53]. He
understood there was a massive fiscal pressure on the
state. He wanted to understand how the removal of the
position would impact operations. Additionally, he wondered
why it would be removed after the committee had added it.
Representative Johnson highlighted that the last line of
the amendment explanation specified that the department did
not ask for the addition; therefore, she was comfortable
removing it. She assumed the department would have
requested the position if it was needed.
Co-Chair Schrage agreed with Representative Johnson. He
confirmed that the position was not requested by the
administration. The department had testified in committee
that it was able to handle the workload, but processing
times were sometimes up to three months. The committee
decided prior to the spring revenue forecast [from the
Department of Revenue], considering the very small amount
of UGF required, there would be value in adding the
position to try to cut processing times down. He reiterated
that the department told the committee it could handle the
current workload with existing staff. He felt that given
the state's worsening fiscal position, he felt it
appropriate to remove the addition made by the
subcommittee.
Representative Tomaszewski asked who added the position. He
shared that during his time in the legislature over the
past two years he had received several calls from
individuals who had retired and were waiting for their
benefits. He thought the position was perhaps an intent to
speed the process up. He remarked that once a person
retired and their paychecks stopped there was a lag before
the individual began receiving benefits. He noted that it
could make people justifiably frustrated. He asked for more
clarification on the reason for adding the position to the
budget.
Co-Chair Schrage replied that he had also heard the concern
from retirees in the past. He relayed that the department
had testified to the committee that it could handle the
current workload and the three-month wait was somewhat in
line with waits in other states. He acknowledged that the
process was faster in some states and about the same in
others. He stated that as a fiscal conservative, he thought
the state needed to live within its means with the new
revenue forecast. He would like to reduce the processing
time and lag time for retirees, but he did not think the
state could afford it currently. He thought many of his
constituents who were retirees would prefer to wait a
couple of extra weeks and see the $93,000 go to the Base
Student Allocation (BSA) instead.
Representative Tomaszewski asked if the subcommittee had
been told employees should expect a lag of a couple weeks
or three-months. He asked if individuals received the
information prior to retirement. He wondered if there was
any discussion on starting paperwork sooner in order to
prevent a lag. He was uncertain of the process.
Co-Chair Schrage answered that part of the issue was that
individuals were retiring at the end of the school year and
there was a large volume of retirements at one time due to
their cyclical nature. Some individuals were caught off
guard but most people planning for retirement had heard of
the wait times from other retiring colleagues. He had not
done a survey of all prospective retirees to determine
their awareness.
9:14:24 AM
Representative Allard shared that she had been in the
committee meeting, and it was clear that the department
needed another person. She explained that it took the
department six to nine weeks to process retirements because
the process was still done on paper and nothing was saved
on the computer; therefore, it took a long time. She noted
that the director had told the committee the department
wanted another position. She found that the department
processed retirements pretty well and the time frame lagged
a little bit after the school year because teachers started
retiring at that time. She stated that the current topic
was unrelated to being a fiscal conservative. She believed
deleting the position would cost more in the long term
because retirees were not being processed accordingly. She
did not think it was fair and she supported maintaining the
position because teachers' retirements should be processed
in a timely fashion. She added that existing employees
would be working overtime to process retirements, but
adding another position would help prevent overtime.
Representative Hannan would support the amendment. She
reminded committee members that if the position were
funded, the department could not start processing and
hiring until July 1. She stated the problem was that the
bulk of teachers gave retirement notice in spring and the
Division of Retirement and Benefits started processing the
retirements on July 1. She stated that teacher retirees
were advised - long before they filed their retirement
paperwork to go to an advisee that their first check was
in September. She stated that in 2024, many legislators
heard from constituents that checks were not coming until
November. She believed most legislators had heard from
constituents that they were prepared for a lag but not a
lag of five months without a retirement check. She thought
the department should have heard legislators loud and clear
from inquiries, and during the subcommittee process the
department said it had stepped up. She pointed out that the
funding would not resolve the situation for the upcoming
retirement cycle because the department would not be able
to start advertising for a new position until July 1. She
stated that if the department had not anticipated a surge
in retirement in the coming summer and there was another
major fumble, there would be another discussion during the
subcommittee process the following year. She added that
retirees were due their money and the department said it
would be able to handle it better.
9:18:52 AM
Representative Bynum stated he did not want to impugn
anyone, but he did not know how many legislators had
employed people and dealt with transitioning employees into
retirement and not allowed them to get a check for three
months. He underscored it was a very stressful situation
for someone making a life change. He understood the need
for fiscal restraint but stressed that they were talking
about $3,100 in UGF, while most of the position was paid
via other mechanisms. He remarked that the legislature
talked about wanting to make sure it was funding other
things like the BSA, which was all coming out of UGF. He
highlighted that DOA came to the committee with a funding
request for AI tools to create efficiencies and create
better communications, but the committee had denied the
request. He stated that people were needed to help progress
retirement processing for $3,000 UGF and now the committee
was saying there needed to be fiscal constrained and it was
okay for retirees to wait. He was torn on whether he wanted
to support the amendment.
Representative Johnson remarked that she had started out
saying she would support the amendment, but the
conversation had convinced her otherwise. She did not think
about it being attached to the BSA when she had been
talking about it earlier; however, if the legislature was
going to start "robbing Peter to pay Paul" to increase the
BSA, she thought it was dangerous. She had heard a lot
about people wanting to make sure they were getting their
money because without SBS, teachers were struggling when
they entered the gray area. She reasoned the UGF amount
[used to fund the position] was so little, it made no sense
to her not to fund it.
Representative Galvin would support the amendment because
the department had not requested the position. She stated
that generally when a department did not ask for help, it
would not run to hire someone in time to get the ultimate
goal met. She stated the department had worked it in
another direction and she was grateful for that.
Co-Chair Schrage appreciated the discussion on the
amendment. He relayed that the amendment was an effort to
restrain some of the action taken by subcommittees and
tried to be consistent in how the budget was approached in
the full finance committee. He recognized the portion
coming from the general fund was limited, but he stated it
also impacted the Public Employees' Retirement System
(PERS) trust and some of the other retirement accounts. He
believed the amendment ensured the state was not spending
more than it needed to regardless of the fund source. He
had concern for retirees as they made the transition [from
work to retirement], but the department had told the
committee that wait times were in line with what was to be
expected for retirement accounts. Additionally, the
department did not request the position. He pointed out
that there was a lag time of when the department would be
able to hire a person to fill the position. He stated the
amendment was another opportunity to restrain growth in
government in a year where revenues were constrained. He
remarked that some may tie it to the BSA, some may tie it
to the PFD [Permanent Fund Dividend], and some may tie it
to any of the other appropriations made as a state. He
noted the state had limited resources and he believed it
was necessary to look for every opportunity to prioritize
what was most important. He thought it was a reasonable
approach in the current year to keep the wait time for
retirement and benefits at an industry norm.
9:23:43 AM
A roll call vote was taken on the motion.
IN FAVOR: Hannan, Jimmie, Galvin, Foster, Schrage,
Josephson
OPPOSED: Johnson, Stapp, Allard, Bynum, Tomaszewski
The motion PASSED (6/5). There being NO further OBJECTION,
Amendment 15 was ADOPTED.
9:24:41 AM
Co-Chair Josephson reviewed the schedule for the afternoon
meeting.
Representative Johnson asked if there would be a meeting on
Friday.
Co-Chair Josephson answered there was no meeting scheduled
for the following morning, but there was a meeting
scheduled in the afternoon.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
9:26:09 AM
The meeting was adjourned at 9:26 a.m.
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