Legislature(2015 - 2016)HOUSE FINANCE 519
02/23/2015 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB71 || HB72 || HB73 | |
| Overview of the Governor's February 17th Budget Amendments Including Supplemental/capital/other Appropriations | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 71 | TELECONFERENCED | |
| += | HB 72 | TELECONFERENCED | |
| += | HB 73 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE BILL NO. 71
"An Act making appropriations, including capital
appropriations and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
HOUSE BILL NO. 72
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, making
reappropriations, and 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. 73
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:41:59 PM
^OVERVIEW OF THE GOVERNOR'S FEBRUARY 17TH BUDGET AMENDMENTS
INCLUDING SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS
1:41:59 PM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, began her presentation with the
FY15 Supplemental Amendments handout: "FY2015 Supplemental
Requests 2-17-15". She referred to the request on line 4
for Department of Natural Resources (DNR) in the amount
$896 thousand for the emergency repair of the state forest
road systems in the Tanana Valley State Forest. The repair
was necessary due to the rain the previous summer. The road
was impassable. The Department of Natural Resources earned
about $250 thousand from the products in the forest and
there were many wood uses and community aspects of being
able to use the wood in the Tanana Valley Forest. The
request came in on multiple occasions and was pushed back.
However, the funding was currently necessary. The repair
request was not new, but the administration had hoped there
was another option rather than the repairs suggested;
however, there was not but found that there was not.
Co-Chair Thompson acknowledged Representative Guttenberg at
the committee table.
Ms. Pitney continued to the request on line 8 for The
Department of Law (LAW) in the amount of $121.5 thousand
for judgements and settlements. The next line 9 was a
reappropriation from two projects for DNR [DOT] to address
its injection wells. Previously, in DNR's [DOT] maintenance
facilities, oil would be dropped through the floor which
was a perfectly acceptable practice at the time. However,
it was no longer practiced. Therefore, injection wells had
to be installed. Funding from two projects, the Core of
Engineers Harbor Program, and the Glenn Highway Repair. The
Harbor Program was not going to use the money appropriated
because funding came in the form of geo bond monies for the
same project. The Glenn Highway repair was completed with
additional federal funds.
1:46:18 PM
Vice-Chair Saddler asked where on Glenn Highway the ruts
were that needed repair. Ms. Pitney responded she would
have to get back to him with the information. She furthered
it was within the Statewide Transportation Improvement
Program (STIP).
Vice-Chair Saddler added that it was a long highway but it
went right through his home town.
Representative Gattis answered Vice-Chair Saddler's
question. She stated that the ruts were essentially from
Wasilla to Anchorage. There had been a significant amount
of rain and some snow. She had constituents calling in
about hydroplaning in to work each day.
Ms. Pitney moved to the item on line 10 for DOT. She
explained that it was an exchange of a reappropriation of
project monies for the Ted Stevens Anchorage International
Airport. She continued with line 11, also within DOT, for a
reappropriation for the replacement of the Kalsin Bay
maintenance station. The request was to replace a
maintenance station on Kodiak Island that burned down.
Although risk management funds were available they were not
enough to cover the full project.
Ms. Pitney reported that line 12 referenced a repeal. The
Alaska Gasline Inducement Act (AGIA) project was closed out
leaving $2.8 million in the account. The money was
available for repeal.
Ms. Pitney reported that lines 13 and 14 were included to
bring attention to two appropriations made in FY 15
exceeding the revenue and replacing the accounts with
general funds to meet the level of appropriation approved
by the legislature in the previous year. If the legislature
did not want to approve the GF transfers into the account
it would take time to review the projects to determine
which projects would not be funded from the prior year and
then repeal those projects. They were included to make the
funds whole.
Co-Chair Thompson asked about line 14. Ms. Pitney replied
that 13 was from the capital income fund. Line 14, a
nuance, denoted the cruise ship tax. There were two
accounts within the cruise passenger tax; the head tax and
the gambling tax. Instead of putting the gambling tax into
the GF the gambling tax would be placed in the fund that
was over-appropriated. If the gambling tax was not enough
the GF would be used to make the account whole. There was
reasonable comfort that the gambling tax would be
sufficient to cover the appropriations.
1:50:29 PM
Vice-Chair Saddler asked about the thinking behind not
placing the funds in GF first and then making a separate
transfer. He wanted to understand the thought of cutting a
corner.
Ms. Pitney explained that in the previous year the
legislature appropriated several projects to use the
particular funds. They appropriated more projects than
available funds. She continued that the cruise ship tax and
the gambling tax fell under a similar account. Actually the
cruise ship tax did not go to GF but the gambling tax did.
The administration was suggesting that instead of running
the gambling tax to the GF, backfill the particular
shortfall. It was only to correct an error from the prior
session. If the situation was not corrected, it would
result in some project repeals.
Representative Gattis asked to refer back to the fire at
the maintenance station near Kodiak. She wanted to know
about risk management and how the state intended to make
sure another incident did not occur.
Ms. Pitney provided an example in order to attempt to
answer her question. The state had 2500 facilities listed
on the state books. Each facility was assigned a
replacement value. If the value was based on the facility
as it existed rather than a facility that would be desired
if starting from scratch. The replacement value would be
undervalued in comparison to a desired replacement
facility.
Representative Gattis made the point that sometimes in
tough times the state would not be able to build what it
wanted. She struggled with the particular line of thinking
Ms. Pitney was suggesting. She reiterated that the state
was experiencing tough times and would not get to build
what it wanted, but what it could afford.
Co-Chair Thompson acknowledged Representative Wilson's
presence.
Representative Gara wanted clarity about whether she was
talking about accounts within the GF. The designated fund
prohibition in the constitution did not allow funds to be
taken out of the GF. They were all GF that she was
referring to. In otherwise, the state could reach into any
of the GF accounts and place any of the money into anything
the state wanted. He asked if she was only talking about
the GF. Ms. Pitney responded affirmatively.
1:54:56 PM
Ms. Pitney tuned to the handout titled: "FY2016 Capital
Amendments Spreadsheet 2-17-15". She reviewed line 1 which
amended Alaska Housing Finance Corporation (AHFC) energy
programs. It was pointed out to her by Vice-Chair Saddler
that there was $50 million proposed in the out-years for
energy programs. She replied that it was an oversight and
not the position of the administration. The administration
reduced the out-year program amount for the energy
programs.
Ms. Pitney reviewed lines 2 and 3 indicating that they also
addressed the same out-year amounts. She explained that
line 4 addressed an oversight where there was $22 million
in federal funds that were available. Therefore, the
federal funds were not included in the capital budget.
Ms. Pitney moved on to line 5, restoration of the homeless
assistance program. It was an $8 million grant program the
previous year and was reduced slightly to $7.7 million. The
appropriation was missed in the striped down capital budget
and needed restoring.
Representative Gara asked about the AHFC out-year money. He
stated that the legislature was not appropriating any out-
year money. He asked Ms. Pitney to explain it more
thoroughly. He was under the impression that the prior
year's AHFC Homeless Assistance Program money was $9.2
million rather than $8 million.
Ms. Pitney responded that there were two programs; the
homeless assistant program and the special needs housing
program which together totaled $9.2 in funding. It was $500
thousand the prior year totaling $9.7 million. Going back
to the topic regarding the out-year. She explained that it
was only a correction of intent. The administration did not
say on record that there was $50 million for weatherization
and energy programs when the expectation was that the
amount would be much smaller, closer to $11 million. It
corrected the out-years. The administration could have let
it go but thought to change it to be clear about its
intent.
1:57:59 PM
Representative Wilson asked if it was $7.7 million and $1.5
million totaling approximately $9.7 was the amount in the
previous year. Ms. Pitney responded that the two homeless
assistance programs added up to $9.2 million versus the
$9.7 million in the prior year.
Representative Wilson asked why the appropriation was in
the capital budget rather than the operating budget. She
thought it belonged in the operating budget based on
testimony received in Fairbanks.
Ms. Pitney answered that it was, to some degree, an
operating expense. It was operating at a community grant
level, though, more like a grant program similar to how the
Department of Commerce, Community and Economic Development
(DCCED) had2 its community grant programs set up. Grants
were going out to community providers. It could be in the
operating budget. The nice part about having it in the
capital budget was that the timing was not tied to the
fiscal year. Programs could span multiple fiscal years.
Some programs were 3-year grants.
Representative Wilson was wondering if the grants were
competitive grants. She wondered if there were checks and
balances in place to determine how many people were being
helped and whether the program remained viable. She
wondered who checked on the program to make necessary
changes for the communities because of less funding for
capital projects.
Ms. Pitney responded that AHFC had a robust program that
analyzed the priority of housing opportunities and the
distribution of funds to different agencies. Once a
particular housing project proved itself, there would be
ongoing support. Each of the grantee's performance numbers
were reviewed. She suggested that AHFC could provide any
additional information.
2:00:29 PM
Co-Chair Thompson remarked that there seemed to be quite a
few agencies that received AFHC grants. He was also aware
of different funding sources including mental health. He
asked if AHFC was the administrator. Ms. Pitney responded
affirmatively.
Ms. Pitney referred to lines 7 through 12 and explained
that they were fund source changes from international
airport construction funds to international airport revenue
funds. She explained that it was a fund source change
within the same airport fund. It was airport fees allowing
use of funds versus construction funds.
Co-Chair Thompson commented that there were no general
funds involved.
Ms. Pitney continued with lines 13, 14, and 15. She
elaborated that when the Juneau Access Improvements Road
and the Knik Arm Crossing Project were paused the funding
associated with these projects were placed into an
unallocated line item. The amendment placed the unallocated
line item into the Non-National Highway System Pavement and
Bridge Reconstruction and Refurbishment line.
Representative Pruitt asked whether it was decided that the
money that was allocated for the two projects would be
spent but not on the two projects.
Ms. Pitney replied that in the budget that was forwarded by
the Parnell administration there were two projects named,
the Juneau Access Improvements Project and the Knik Arm
Crossing Project. She continued that when the Walker
administration placed a pause on the projects and submitted
the stripped-down capital budget to include all of the
federal transportation match funding, the money for the two
projects was placed in an unallocated account. The money
the state received for transportation was based on a 90/10
match. The administration was changing where the money
could be spent in FY 16.
2:03:57 PM
Representative Pruitt understood that the legislature did
not specify the use of the money but the Parnell
Administration had targeted the two projects. He asked
whether moving the funding would hinder the two projects
from moving forward.
Ms. Pitney confirmed that is did slow the progress of the
projects in FY 16. However, funding could be allocated to
the projects in FY 17.
Vice-Chair Saddler asked if the administration evaluated
the effects of pulling money back from the two projects and
the long term consequences of their success.
Ms. Pitney responded that the department was still in
active analysis of the projects. She furthered that the
intent for the Juneau Access Improvements Project was to
reach a record of decision. The funding currently available
for the project would get the state to that point.
Regarding the Knik Arm Crossing Project there was funding
for the project but the project remained on hold and
continued being evaluated.
Vice-Chair Saddler asked if money was being spent on the
active evaluation process. Ms. Pitney stated that money was
being spent to pay for staff time for the commissioner of
DOT, Ms. Pitney, and the chief of staff.
Vice-Chair Saddler clarified that monies were not
specifically set aside for the projects but to absorb other
duties. Ms. Pitney responded, "Correct".
Vice-Chair Saddler wondered about the most recent activity
concerning the evaluation of the Knik Arm Crossing Project.
Ms. Pitney reported that the commissioner of DOT had been
spending a significant amount of time on the project,
reviewing the existing documents and reporting back to the
legislative finance subcommittee. She would be happy to
provide additional information.
Vice-Chair Saddler confirmed that he would like to know
about the most recent work performed.
Representative Gattis suggested that, since the state was
uncertain about whether to move forward with the project
and the commissioner was still reviewing documents, maybe
the state should hold off on any fund changes until it was
more informed about the project. She also asked if the
funds were allocated specific to the two projects of
discussion and asked if the state would have to pay them
back.
Ms. Pitney responded that where the federal funds were
spent was determined by state priorities. The funds could
be adjusted to the priorities decided upon collectively.
The amendment would allow for programing of the related
funds in FY 16. The evaluation took into account whether
payback would be required for the two projects. It was
determined that payback would not be necessary currently.
The state had up to an estimated 20 years to continue with
the project before the state would be liable for the funds.
Co-Chair Thompson acknowledged that Co-Chair Neuman had
joined the meeting.
2:09:31 PM
Representative Gattis mentioned the record of decision and
the environmental impact study that she did not believe
could last 20 years. There were things the state was
looking for such as a record of decision for the Juneau
Access Improvements Project and which the Knik Arm Crossing
Project had already received. She believed more information
was needed.
Representative Munoz asked if monies allocated to the
National Highway System (NHS) to projects within the NHA be
redirected to non-highway system projects as indicated in
the amendment. She was under the impression that monies
allocate or intended for NHS could not simply be
reallocate. Ms. Pitney responded that she would get back to
her regarding on her question. She reiterated that it was
her impression that it was based on the state's priorities.
Representative Munoz stated that her understanding was that
the $70 million was allocated to the two projects, and that
in order to be reallocated they had to be reassigned to
project-ready NHS projects. She relayed that what was shown
on the amendment indicated that was not completely the
case. She asked Ms. Pitney to get clarity on the point.
Ms. Pitney responded that the funding was never allocated
to the two projects because it was the current bill that
set the priorities. She relayed that when the first capital
budget was submitted as unallocated. The amendment pushed
the funding into a project line item on the priority list.
However, the priority list was longer than there was money
available to allow for changes and to utilize the full
funding.
2:12:11 PM
Representative Guttenberg asked about the NHS money and its
allocation. He understood that in anticipation of the money
being received for a specific project the Statewide
Transportation Improvement Program (STIP) list was amended.
He thought it was reflected in amendment 11 or 12. In
expectation of the Juneau Access Improvements Project,
other projects had been moved down the list and out several
years or off of the list entirely. He wanted to better
understand what had changed due to all of the federal money
being allocated for specific projects rather than being a
statewide allocation. He asked if the sideboards changed
when the fund source changed from the International Airport
Revenue Fund to the International Airports Construction
Fund. In other words, he wondered if the requirements and
specifications of the use of monies changed because the
funding source had been shifted from one source to another.
Ms. Pitney asked for Representative Guttenberg to repeat
his question.
Representative Guttenberg referred to line 12 under the
fund source column. He pointed out that the International
Airports Revenue Fund was changed to the International
Airports Construction Fund. He wondered with the change if
the sideboards changed as well. Ms. Pitney replied that she
would get back to him.
Representative Gara asked whether the move of $70 million
was a reallocation of funding that was allocated in prior
years. He wanted to confirm that she was establishing FY
16's budget and changing what the previous governor had put
in his placeholder budget outlining where the money was
going to be used. He wanted to confirm that she was not re-
appropriating money from previous years.
Ms. Pitney indicated that Representative Gara was correct.
The funding had never been attached to the two projects
being discussed because the only capital budget that was
submitted was a significantly stripped down budget that did
not include specifics.
2:15:41 PM
Co-Chair Neuman asked about the potential consideration
taken with infrastructure projects around the state. He
indicated his understanding was that the state had
approximately $4 billion which would last about 3 years for
major projects in the state. Some of the projects were
scheduled to initiate in years, 4, 5, and 6 so that there
were jobs in communities. He relayed that he had had Mr.
Gunnar Knapp of the Institute of Social and Economic
Research (ISER) do some work on reductions to the budget.
In terms of capital budget reductions, about 950 jobs would
be reduced for every $100 million in decrements. He
believed there would be substantial reductions in the
state's operating budget in the current year, accounting
for several jobs. He stressed that in years 4, 5, and 6 if
there were not jobs in the areas doing infrastructure
projects, it would have a detrimental effect on
communities. He opined that DPS, DOC, and DHSS budgets
would skyrocket. He furthered that when people lost their
jobs they often turned to drugs and alcohol. There were bad
things that happened to people on drugs and alcohol. He was
concerned whether the department had looked at the cause
and effect of on the size of the capital budget and years
4, 5, and 6 to ensure the state had a stable economy when
looking at projects.
Ms. Pitney responded that one of the key criteria for the
budget submitted in the current year was moderating the
spending reduction to ensure the state had a stable
economy. It was a step down and maximized federal capital
funding. The first capital budget submission was strictly
leveraged with federal funds seeking maximum external
funding. It was also a section in the overall state budget
where reductions could be applied most expediently. She
maintained that the capital budget was very thin and was
anticipated to be thin in the following years. She
furthered that the addition of the homeless grant program
through Alaska Housing Finance Corporation (AHFC) totaled
under $200 million, of which $35 million was through
reappropriations. She added that there was just over $150
million net funding for the capital budget. The future
state capital budgets would also be fairly limited. The
state would likely have to turn to public/private
partnerships or external resources for project investments.
She explained that if a project did not have revenue
potential it would be very difficult to make investments
from the administration's view. Project priorities of the
legislature would be well considered within the
administration.
2:19:52 PM
Co-Chair Neuman believed that the monies for AHFC related
projects were 100 percent federal pass-through funds, as
reported by Mr. Butcher. He noted that pass-through funding
would not affect the state's capital budget. He added that
the Federal Highway Department [Administration] considered
Alaska a net positive state. In other words, Alaska
received more in funding for STIP than what it paid in
taxes associated with buying fuel. Instead of a 10-to-1
ratio for Alaska's dollars it was likely Alaska would see
12, 13, or 15 to 1 on the match projects. He thought it was
exceptional that the state had the opportunities to take
advantage of accessing the funds for building
infrastructure. He asked whether she had analyzed the
budget.
Ms. Pitney indicated she was unclear of the potential for a
1 to 12 or 13 match. She agreed that the ratio would be
exceptional. She understood the match to be a 90 to 10
match. She continued that there were two pieces to the
housing program. The first was $22 million federal pass-
through dollars. The second was $9.2 million for homeless
assistance funded by the state.
2:21:43 PM
Co-Chair Thompson recognized that Speaker Chenault was in
the audience.
Vice-Chair Saddler asked about Governor Walker's intentions
for the Knik Arm Crossing Project and the Juneau Access
Improvements Project. If the answer was to continue
studying them, he wanted to know about how long the studies
would take.
Ms. Pitney responded that in regards to the Juneau Access
Improvements Project the administration's intent was to
proceed to the record of decision. The funding of the
project took the state to that point without delaying the
project.
Vice-Chair Saddler asked how long it would take to get to a
record of decision. Ms. Pitney responded that the record of
decision would be about a year from the current day. She
would double check the timeline but noted it was a ways
off. In regards to the Knik Arm Crossing Project, she
reported the goal was to get as much value for the work
that had been completed to-date in getting to an
environmental impact study (EIS). She added that the EIS
was the next major piece of the project, a time consuming
part of the project.
Vice-Chair Saddler asked if Ms. Pitney estimated it
happening more than a year from the current date. Ms.
Pitney thought so. She added that there were many
components to the EIS.
Vice-Chair Saddler asked Ms. Pitney for a best-guess
estimate on how long it would take for the state to
complete the EIS. Ms. Pitney responded that she would have
to get back to him.
Vice-Chair Saddler wondered about the intentions of the
administration following the completion of the EIS. Ms.
Pitney stated that the EIS was critical to the
administration's intention.
Vice-Chair Saddler asked if the administration intended to
proceed. Ms. Pitney suggested that if the state received
the EIS there would be an opportunity to proceed depending
on the timeframe.
Vice-Chair Saddler asked whether Ms. Pitney could answer
the question as to whether the state would proceed. Ms.
Pitney answered, "No".
Co-Chair Neuman commented that regarding the Knik Arm
Crossing Project the current funding mechanism set in HB 23
[Legislation passed in 2014 - Title: Knik Arm Crossing]
allowed for a total of $5 million additional costs to move
on the project. The rest of the funding would come from the
states revenue for the STIP match grants. Currently, the
state's capital costs totaled $5 million to complete the
project.
2:24:49 PM
Ms. Pitney discussed line 16. The amendment was another
federal pass-through of funding this time for the
maintenance and operations of the Adak Airport. The funding
was overlooked in the first version of the budget and
needed to be corrected. She moved on to the amendment on
line 17 which was a project list update containing
additional information than what the previous capital
budget included. It was a priority list of projects.
Ms. Pitney turned to the 4-page handout containing the
Operating budget amendments. She began with line 1 which
restored funding through reallocation for the named
recipient grant for Alaska Native arts marketing. It was in
the same Commerce, Community and Economic Development
component as tourism and seafood marketing. It was the only
program within the component that was entirely eliminated.
The request was for one additional year in order to move
into a more privatized approach.
Vice-Chair Saddler asked if the $300 thousand in funds
would mark the final year of the marketing program. Ms.
Pitney responded that DCCED had hoped they were ready to
privatize in the current year but one more year was needed
to make the transition.
Vice-Chair Saddler asked if it would be the final year of
state support. Ms. Pitney answered that it might come in at
a slightly lower or largely lower amount. The intent was to
see it privatized.
Vice-Chair Saddler asked if it was possible that a request
would be submitted in FY 17 for additional funds. Ms.
Pitney answered that it was possible.
Vice-Chair Saddler asked if her answer was, "Yes". Ms.
Pitney stated, "Yes, it is possible."
2:28:09 PM
Representative Wilson asked why it was not a one-time
increment. Ms. Pitney was just learning about the caveats.
Representative Wilson asked how long the project had been
operating. Ms. Pitney believed it had been ongoing for over
8 years.
Co-Chair Neuman asked Ms. Pitney if the project was part of
the Silver Hand Program.
Representative Munoz thought it was a grant that helped to
promote cottage industries including the fur industry and
native crafts. Sea Alaska Heritage Institute was involved
with the grant.
Co-Chair Thompson asked Representative Munoz if she knew
how long it had been going on.
Representative Munoz believed it had been around for 4 or 5
years.
Ms. Pitney moved to line 4 which partially restored the
Regional and Community Jails Program. In 2011 the program
was funded at $6.5 million and in 2015 it was funded at
$10.5 million. The request would restore the program but
reduced the amount which allowed The Department of
Corrections (DOC) to renegotiate the community jails
contracts based on the usage needed for each community and
to address any transportation impact for public safety.
Ms. Pitney continued to line 6 to an amendment addressing
an accounting need. Interagency receipts and post-secondary
receipts would be assigned. It was post-secondary reporting
that would make separation and transparency of their
accounts. There were no funding changes. Rather, it was a
double counting through interagency receipts.
Representative Guttenberg asked about how much of actual
student loan money or interest was being used or
transferred within the department. He was aware of things
that might come up as part of the administration of any
program. However, he had a significant issue with the high
cost of student loans.
Ms. Pitney answered that it had nothing to do with the cost
of doing business or the number of loans or interest on
student loans. The amendment set up a separate account in
order that the post-secondary receipts showed up in one
account. There was an inner agency receipt for the post-
secondary receipts to be posted. It was merely an
accounting exercise in order to capture all of the post-
secondary receipts and all of the spending within post-
secondary education. It was a net zero impact in terms of
the cost. She could follow-up with Representative
Guttenberg's question regarding how much was going into the
administration of student loans including the loan totals
and volume over time.
Representative Guttenberg understood it was net zero.
However, he wondered what part of the funds were being
used. He suggested that it could still be a net zero even
when some of the funds were being used.
Ms. Pitney responded that there was no difference in the
use of funds because of the accounting exercise.
2:33:08 PM
Representative Munoz wanted to return to the reduction in
the tourism and marketing activities. She asked if the
amount that was restored for the Alaska Native arts
marketing was taken from tourism and seafood marketing. Ms.
Pitney responded in the affirmative.
Representative Munoz asked for the balance for tourism
marketing and for the Alaska Seafood Marketing Institute
(ASMI). Ms. Pitney responded that $18.7 million was left
for tourism marketing and $24 million was left for AMSI.
Representative Munoz was under the impression that in the
prior year tourism marketing was approved at $16 million.
It appeared that the amount was increasing.
Ms. Pitney replied that it was total funds. She added that
of the $18 million $16 million would be unrestricted
general funds. She was providing unrestricted general funds
as well as other funds.
Representative Munoz asked for the state's portion. Ms.
Pitney would provide the information later.
Representative Munoz requested the numbers on tourism and
seafood marketing. Ms. Pitney continued with line 7 which
was an additional decrement for reform for the Medicaid
program. Through discussions with DHSS concerning
additional reforms that could be implemented beyond the
cost shift from expansion, there was a $20 million decrease
for components expected from Medicaid reform.
Representative Wilson commented that reform and expansion
were blended together. She asked whether the $20 million on
line 7 came from just reform within the division rather
than taking any expansion for the savings.
Ms. Pitney stated that there were components in the reform
that required a waiver from the Federal Center for Medicaid
Services. The waivers had a higher success possibility with
expansion. The amount was based on the existing population.
The amendment reflected the potential cost savings to the
state. Some components were waiver dependent and had to be
approved by the Federal Government. Assuming the waiver was
approved the state would realize the savings. Approval of
the waivers could require the state to expand.
2:37:25 PM
Representative Wilson asked for the details from the
division for the $20 million. She wanted to better
understand which services would take expansion and what
regulations would have to be evaluated to make the waivers.
She was divided. She was also concerned with the law suits
associated with the current waiver system and wanted to
avoid additional lawsuits.
Co-Chair Thompson commented that he and Co-Chair Neuman
were looking for additional information and would provide
it to the committee.
Vice-Chair Saddler asked about components that required
waivers. He wondered what she meant when she said the
waivers had higher success. He asked if she meant a high
reimbursement rate, a higher Federal Medical Assistance
Percentage (FMAP), or a higher likelihood of being
approved. Ms. Pitney answered that she meant that it would
be a higher likelihood of being approved.
Ms. Pitney discussed lines 8 and 9. She explained that with
the zeroing out of monies from the GF for aerospace
operations the Department of Military and Veterans Affairs
(DMVA) had requested that aerospace receipts be increased
to have the opportunity to earn additional funding through
privatization or efforts working with industry.
2:39:20 PM
Ms. Pitney looked at lines 10 through 14. She reported that
combined was an internal reallocation in DOT to restore
ferry service. It represented a one-time reduction in each
region of the highways to restore the ferry service due to
the reduction. She suggested that it would allow the people
with ferry tickets to utilize them with uninterrupted
schedules. She emphasized that it was a one-time
reallocation.
Co-Chair Thompson asked about the $6.29 million. He
understood that it reduced highways and airports but was an
unallocated amount. He was concerned with the funds being
unallocated. He also understood that the number of
reservations that would be impacted only generated about
$70 thousand in revenues but would cost the state $3.5
[million] and $2.7 million of that was the fuel trigger
which did not take effect unless the price of oil was $70
per barrel.
Ms. Pitney explained that the fuel trigger funding was
eliminated. The fuel prices had not come down commensurate
to the loss in funding from the fuel trigger mechanism. In
other words, the cost savings were below the savings that
the price of fuel allowed. She continued that the revenue
reduction from the loss of the fuel trigger was more than
the cost savings AMHS realized from the lower price of
fuel. The revenue reduction from the loss of the fuel
trigger was more than the cost saving AMHS would have based
on the price of fuel. The price of fuel had not come down
as quickly as the price of a barrel of oil. Another factor
was that the ferry schedule was posted in the previous
October. The schedule that would be posted in the following
October would be less robust reflective of the reduction.
Co-Chair Thompson did not think the legislature was
eliminating services completely. He opined that it would be
more frugal to contact the people with reservations to
reschedule. He did not believe the state would lose revenue
and expressed his concerns about shifting money away from
highways and airports.
2:42:54 PM
Representative Wilson wanted to know why one service was
more important than another. She explained that the haul
road consumed funding for the Northern region taking away
from the rest of the region. She asked for the
justification that any of the areas could go without the
funds for 1 year.
Ms. Pitney explained that it was intended to be a one-time
allocation. She thought there would be slightly less
maintenance especially if Alaska had a similar snow year as
the previous year. It was understood that it could not be a
long-term appropriation because of the importance of
maintaining roads, but the state could handle the
reallocation for 1 year.
Representative Wilson commented on complaints she received
about the condition of the haul road and it needing
additional maintenance. She mentioned the savings to the
state in using brine on the roads in Fairbanks and
potentially in Anchorage. However, she felt it was not a
savings on vehicles. She furthered that priorities were
being established by taking funds from one area and moving
them into another. She was not in favor of delaying
maintenance to the haul road, the state's lifeline to the
oil fields. Additionally, she was concern about what
message was being sent. She reiterated that she was
uncertain about the savings the state incurred by using
brine versus the cost to vehicle owners.
Representative Munoz agreed that it was difficult to take
from one area to give to another. However, she asked
committee members to keep in mind that AMHS was the highway
system in coastal Alaska. It was how people were connected
to the urban centers. She opined that anything the
legislature could do to maintain or support the ferry
system was vital to a portion of the state. She asked Ms.
Pitney if the agencies had looked at efficiencies for shore
side operations. She was aware that the shore side part of
AMHS had grown a great deal in the previous 10 to 15 years.
She wondered if Ms. Pitney had looked for shore side
operation efficiencies so that the legislature did not have
to cut the actual service of the ferry system so
drastically.
Ms. Pitney said she would talk with the Department of
Transportation and Public Facilities (DOT) about its
operation savings.
Representative Gara understood from the prior document that
there would be $12.5 million for tourism and marketing.
However the current document showed $18 million. He asked
if the difference of about $6 million was a federal match.
He wanted to better understand how the federal match worked
and asked if the state would lose the federal match as it
moved the state portion up or down. Ms. Pitney would follow
up with Representative Gara.
2:46:44 PM
Vice-Chair Saddler referred to the ferry reallocations. Of
the reservations made that the administration was hoping to
avoid disrupting, he wanted to know how many were for
Alaskans and how many were for visitors. Ms. Pitney
responded that she would provide the information.
Vice-Chair Saddler asked if there were any financial
penalties associated with not honoring the reservations.
Ms. Pitney answered that she did not know of any financial
penalties.
Representative Pruitt asked about what kind of cost savings
would be seen. He wondered if certain roads would not be
repaired or snow removal services would be curtailed. He
was concerned with the potential impact to the central
region.
Ms. Pitney responded that there would be less road
clearing, less pothole maintenance, and generally less
capacity.
Representative Pruitt concluded that in order to place more
money into AMHS it would mean less services. Ms. Pitney
responded affirmatively.
Representative Gattis relayed that while working for the
airlines the airline schedule changed frequently and
passengers would adjust accordingly. She did not believe
maintaining the ferry schedule was a strong enough argument
and asked the chairman to make sure the committee looked at
the issue more tightly.
Co-Chair Thompson mentioned as a point of clarification
that he was looking at it. He explained that $6.2 million
reduced 39 weeks of ferry service. In 2007 and 2008 there
were 74 weeks of ferry service added. He reported he was
looking at the amount of service being offered, in what
areas, and how the state was benefiting.
2:50:00 PM
Ms. Pitney reported that line 17 incorporated flexibility
language, a request from the administration. It allowed for
a 5 percent unrestricted general fund (UGF) transfer within
a department and a 2 percent transfer across departments.
She stated that the depth of reductions was going to be
very difficult and there would be unintended consequences.
The administration was requesting the flexibility of being
able to move within and across departments to address
certain items. She added that, with the potential cuts
anticipated, it would be helpful in addressing any
unintended consequences that might arise.
Co-Chair Neuman acknowledged being provided with a
percentage amount but wondered about a dollar figure. Ms.
Pitney replied that if there was a $100 million budget 2
percent would equal $2 million. She reported that the
highway portion of DOT was approximately $114 million, 5
percent of which would equal just over $5 million. It
depended on the amount of funding within the appropriation
being discussed.
Co-Chair Neuman noted $10 million that the governor was
requesting to be placed in his budget to cover
unanticipated costs resulting from budget reductions. He
asked if he was accurate. Ms. Pitney responded that given
the reception that the $10 million of unallocated funding
had it was a back-up flexibility approach.
Co-Chair Neuman asked, "So that was a yes?" Ms. Pitney
responded, "That is a yes."
Representative Guttenberg remarked that with the current
budget exercises the governor was clearly going to need the
ability to manage the state's accounts. He recalled that in
the previous year the commissioner of Department of Health
and Social Services (DHSS) talked about the department only
working because of the governor's flexibility to balance
numbers and shift things around temporarily. He believed a
certain amount of flexibility to move money around was
necessary. He wondered if the legislature was adding to the
flexibility.
Ms. Pitney replied that the administration preferred to
have $10 million available in addition to individual
appropriations. She emphasized that the ability to transfer
was not additional money, rather, it was having the ability
to move money within and across departments.
2:54:43 PM
Representative Guttenberg asked if the provision was
expanding the authority to transfer money within and across
departments. Ms. Pitney stated that it expanded authority
and raised it to the appropriation level.
Representative Pruitt wanted the committee to readdress
line 15 and 16. He wanted an assurance that the
administration would not move money from something that was
important to the legislature. He stressed that the purpose
of the appropriation process was for the legislature to
direct and the governor to agree or disagree. He commented
that it seemed like the legislature would be providing a
blank check.
Ms. Pitney responded that there were tight sideboards of a
2 percent limit and a 5 percent limit that applied. She
asserted that the assumption had to be that the
administration was operating for Alaskans and had the best
interest of Alaskans in mind. It had to be clear that the
provision was available to be able to address the things
that through the budget process were acknowledged as
important. If there was a situation in which there were
unintended consequences providing for the ability to
address them. There would not be any guarantees about what
decisions would be made but the assumption would be that
whatever decisions were made would be on behalf of the best
interest of Alaskans.
Representative Pruitt agreed with Ms. Pitney about looking
out for the best interest of Alaskans and that the state
would have to live under the new budget circumstances. He
believed that one of the challenges in the previous
administration was that there were items that the
legislature did not want to continue funding but somehow
money was applied to those items. He suggested that the
administration was asking for the same type of authority.
He did not suppose the legislature liked the idea
currently, as it did not like it previously. He was not
implying that such a scenario would occur but unfortunately
there was history of it happening.
Ms. Pitney thought that the state's budget situation was
very different with the significant downturn versus an
ever-increasing budget over the previous 15 years. The
choices, decisions, and personnel actions that would have
to be made because of the reductions that would be passed
by the legislature were going to be felt. She thought it
allowed for a timely resolution when going beyond the
intent of both the legislature and the administration.
2:59:15 PM
Vice-Chair Saddler understood that the administration
already had broad authority to transfer money across
allocations. He suggested the supplemental budget was a
vehicle for addressing unanticipated consequences as well
as RPL's [Revised Program Legislative Notices]. He wondered
why the current authority was insufficient and also asked
how Ms. Pitney arrived at 2 and 5 percent. He asked why she
did not ask for 10 percent or 4 percent. If flexibility was
good, more was better.
Ms. Pitney answered that in operating in large
organizations 1 and 2 percent changes corrected several
missteps. She thought that across departments the 2 percent
was very low and that within departments it was at a 5
percent level. The idea was to keep the percentage as
minimal as possible but still create flexibility. She
furthered that in looking at what other states and found
that not every state had flexibility but several did. She
devised the percentage levels based on the range of the
capacity of other states.
Vice-Chair Saddler was reminded of the word usurpation. He
thought it was fair to say that she was correct in assuming
committee members would not be receptive to the percentage
idea.
Representative Gara indicated he was open to something more
creative. He also understood Ms. Pitney's reluctance in
waiting for a supplemental in the following year because
supplementals typically did not pass until the end of the
session. He reminded members that they were making large
budget cuts and she was trying to find a way to address
mistakes without waiting a year. He suggested doing it
through the supplemental.
Co-Chair Thompson asked Ms. Pitney to return to line items
15 and 16. Ms. Pitney explained that between the endorsed
budget and the current set of amendments the university
settled on its UAFT [University of Alaska Federation of
Teachers] bargaining. The monetary terms of that contract
equaled $1.5 million of which $754 thousand were GF
dollars. Line 16 was supposed to read, "To meet the
administration's target for the university this is an
additional reduction in GF." Essentially it would offset
and have zero general funds. It was not intended to reduce
the GF portion of the contract but to reduce the
university's allocation by that amount. The net effect was
to include the appropriation of $1.5 million for the
negotiated contract but reduce the overall allocation to
meet the governor's target amount.
3:03:10 PM
Representative Wilson relayed that private businesses were
not receiving 2 percent every year. She was hoping Ms.
Pitney was sending a message that the state would not
accept the $754 thousand and that other agencies would have
to find money from within their own. It was the only agency
to come back asking for money. She wondered why Ms. Pitney
would not ask the university to find the money from within.
She thought negotiations should be based on current income
rather than potential income.
Ms. Pitney informed the committee that all state and
university negotiated contracts went through the
legislature and each negotiated contract was addressed in
the language section of the operating bill. The language
stated that a certain appropriation covered the cost of the
negotiated contract for a particular collective bargaining
unit. If language was in the operating budget all
negotiated contracts had to be paid and honored. If the
legislature took the specific language section and detailed
that the appropriation did not include funding for the
collective bargaining units, the university and the state
would not be authorized to pay for those provisions for the
contracts. The only way the state and university could pay
the provisions would be if it was specifically addressed in
the operating language.
Representative Wilson responded, "That is not true." She
stated that the university could determine to carry less
staff at 2 percent. The university might not want to take
such a step but to say that they had to, was not the clear
intent of the legislature. Her concern was not just the 2
percent currently being discussed but 2 percent every year.
She was not sure how the $900 lump sum payment went into
effect and for whom, and how much the total cost would be
to the state. She was uncomfortable negotiating an increase
at a time when the state was in a fiscal crisis and thought
it sent the wrong message.
Representative Wilson disagreed that the legislature had to
accept the terms. She suggested the department could have
negotiated differently potentially resulting in reduced
employees based on budget constraints.
Ms. Pitney agreed with Representative Wilson. She noted two
components; language and appropriations. The legislature
had full prerogative to appropriate whatever amount it
chose. If the language in the operating bill specified that
a certain appropriation covered the provisions for certain
collective bargaining units, the provisions had to be paid.
The language was separate from the appropriation. The
funding amount included the amount for the collective
bargaining units and the state honored its agreements. She
furthered that if the language stated that the
appropriation covered the provisions of the bargaining
units, then the state and the university had to pay based
on the collective bargaining units. She suggested that the
legislature could appropriate an amount of funding and
specify that it did not include the bargaining unit
provisions. The legislative body appropriated money and the
language defined whether it covered the provisions of the
collective bargaining unit.
Representative Wilson clarified that the legislature
appropriated monies and provided language regarding the
collective bargaining unit, but the university determined
how many employees it could afford based on budget numbers.
Ms. Pitney stated that she was correct.
3:08:57 PM
Representative Wilson asked if $754 thousand was an
unallocated reduction and if the university would be
determining specific reductions.
Ms. Pitney responded in the positive. She explained it was
in order to match the university's UGF to the governor's
original target.
Vice-Chair Saddler asked if the change proposed a 2 percent
raise in FY 16, .5 percent increase to the base before
applying another 2 percent increase in FY 17, another 2
percent increase in FY 18, and a 900 lump sum per person
per year. He wanted to know when the contracts had been
negotiated and if it had been prior to the decline in oil
prices.
Ms. Pitney answered that the contract negotiations had
started about the same time in the previous year. She added
that the contract was completed between the time the
endorsed budget was submitted and the submission of the
current amendment.
Vice-Chair Saddler asked if it was around December. Ms.
Pitney stated, "Yes."
Vice-Chair Saddler asked if the endorsed budget was
finalized after oil prices had dropped. Ms. Pitney nodded
in the affirmative.
Representative Gattis stated that based on the state's
current fiscal crisis she was stunned that raises were
being given to people in certain areas while people working
in other areas were losing their jobs. She stressed that it
sent an extremely poor message. In the budgets she was
responsible for there was not enough money to give out
raises. She opined that the last thing she was going to be
a part of was giving out raises when some folks would be
faced with losing their jobs.
Ms. Pitney noted that there would also be an amendment for
AHMS regarding the master mates' contract recently signed
containing increases. She would supply the specifics to the
committee.
Representative Pruitt asked Ms. Pitney if the raise for the
master mates had to be approved by the legislature and
whether the raises were set in stone. Ms. Pitney replied
that it would come before the legislature an included in
the operating budget as a provision of one of the
negotiating units.
Representative Pruitt asked if the administration had had
discussions with people that the state had a $3.5 billion
deficit. The state needed to be talking with people because
the state did not have money. He believed that everyone had
to play a part in a solution. He wondered how he would tell
his constituents that the state had to provide raises to
other people and take money out of their pockets. He hoped
the administration was having discussions about the state's
financial situation.
3:13:17 PM
Co-Chair Neuman asked about line 18 regarding a response
fund. It assumed that the department would receive a large
settlement for a response site in Aniak for about $5
million. He asked if he was reading the item correctly. Ms.
Pitney responded, "Correct."
Co-Chair Neuman asked if it was for Spill Prevention and
Response (SPAR). Ms. Pitney explained that the funds needed
to be received and in the bank in advance of June 30, 2015,
in order to be transferred to the Prevention account as
part of the department's FY 16 appropriation. If a
settlement agreement was not signed by all parties by the
end of February 2015, it was highly unlikely that the funds
would be received by the state in time to be available to
transfer to the prevention account for FY 16 expenditures.
At present, the department felt that it would be prudent to
assume this settlement would not be received in time for
use in FY 16, increasing the prevention account shortfall
to an estimated $6.9 million.
Co-Chair Neuman returned to the subject of spill response.
He commented that he would have preferred the
administration to have offered new legislation. He was
aware that the Department of Environmental Conservation
(DEC) knew the SPAR fund was going to run out in the prior
year. There was not enough money and not enough flow of oil
through the Trans-Alaska Pipeline to cover costs. He asked
Ms. Pitney if she believed it was the duty of the
departments to assure that funds were available through
legislation and asked about a plan.
Ms. Pitney indicated that it was the administration's plan
to introduce an agreed upon piece of legislation that would
fix the problem. The amendment was a back-up.
3:16:00 PM
Ms. Pitney reviewed lines 19 and 20. She informed the
committee that there were updated projections available.
The two amendments updated the amount of money projected
that would be transferred from the Permanent Fund Earnings
Reserve account. The numbers reflected a correction of the
amount projected in the market. The number was slightly
lower than what the administration had originally
projected, the $3 million and $11 million figures.
Co-Chair Thompson commented that they were the only 2 nice
numbers in the amendments. Ms. Pitney responded that the
market was not producing very well.
Co-Chair Neuman asked if there had been any requests from
the governor for agencies such as Alaska Industrial
Development and Export Authority (AIDEA) or the Permanent
Fund Corporation to reduce their budgets moving forward. He
remarked that every other state department was being asked
to make reductions. He asked her to comment on his question
and explain the reasoning behind why the agencies have or
have not been asked to decrease their budgets.
Ms. Pitney reported that all of the agencies were asked to
look for cost efficiencies, not necessarily revenue
reductions. The administration was looking for operating
efficiencies, and ways in which units could offset
operating costs of other units. She cited an offset example
within the Permanent Fund Corporation. There could be a
reduction of positions but the state would have to contract
out more. The division's position had a much higher return
on investment then contracting out with management firms
due to the expense. There was a trade-off. The state could
reduce positions but would ultimately spend more on
contracting the work out. She added that each agency was
asked to do a review.
Co-Chair Neuman asked her to provide the information she
had on the matter. He mentioned the Budget Control Act. He
also asked about railroad facility, a train depot built
several years previously that went through the Ted Stevens
Anchorage International Airport. He asked if fees were paid
for the property like everyone else that leased property.
He commented that it had a huge building not being used. He
wondered if there were plans to do anything with the
building or whether there were any discussions that had
occurred with the administration. He thought the state was
losing money by keeping the building insured and warm. He
was aware that the space had been rented on occasion for
weddings and other events but he felt it was a big issue.
Ms. Pitney was unaware of any discussions and would look
into the matter further.
3:20:16 PM
Co-Chair Neuman asked if she was aware of any plans to
change the facility's operations and if the state would
continue to absorb its costs. He supposed the money came
out of the airport's budget. Ms. Pitney replied that she
did not know the status.
Representative Wilson referenced a list of law suits
provided in the back of the presentation. She wondered what
was being done to ensure the state would not be sued in the
future. She asked if there were any additional law suits on
the specific issues that had been settled. Ms. Pitney
responded that she would follow up on the question.
Vice-Chair Saddler referred to page 2, line 7 of the
"FY2016 Operating Amendments" spreadsheet related to
Medicaid cost containment initiatives. He wondered how the
administration had arrived at the GF savings of $1 million
for durable medical equipment (DME). He asked for the total
Medicaid expenditure associated with DME. He asked for
additional information and wondered how quickly the cost
containment measures would be implemented. He referenced
language about the necessity to meet narrow timelines.
Ms. Pitney responded that she would provide the
information. She relayed that the intent was to collect the
savings in FY 16 since the budget would be reduced.
3:22:30 PM
Co-Chair Neuman stated that there were areas in the
operating budget where the governor had only forward funded
the education fund at 90 percent. He believed some people
may assume that the action saved the state approximately
$126 million. He reasoned that the decrease was not
actually a budget reduction because the state would have to
pay the funds in the following year. He expounded that
someone could introduce legislation to change the funding
formula for the Base Student Allocation (BSA), but that
would require starting over "ground zero," which would
include the $126 million. He asked if the administration
intended to clarify the issue for the public.
Ms. Pitney responded that given the current budget
environment, the administration did not want to forward
fund the entire amount. She noted that a law had passed the
previous session that would look at the formula funds. She
detailed that requests for proposals had been solicited to
make studies on the topic available the following summer
[2015]. The administration wanted to have the education
funding discussion for FY 17 during the 2016 legislative
session. She reiterated that the administration did not
feel that the state was in the position to fund the full
amount at present. She noted that the decision did not mean
that the full formulas amount would not be funded in the
governor's FY 17 budget.
Co-Chair Neuman remarked that there was significant angst
within the education community due to the removal of the
one-time funds that had been added outside of the
foundation formula. He believed that the legislation in
2014 had been created to provide school districts with
increased budget certainty, given that the state and school
district budget cycles were not in alignment. He did not
believe the funding increment would have been approved by
the legislature if a steep decline in oil prices had been
predicted. He believed there would be significant pressure
on the legislature to increase the funds. He referred to
the amount as "ghost money" that the legislature would have
to pay in the current or following year unless legislation
was introduced.
Co-Chair Neuman referenced other appropriations within the
operating budget such as a $4.1 million decrement to DOC.
He detailed that the expansion of Medicaid was expected to
reduce DOC costs. Additionally, there were impacts to DHSS
as well. He opined that the situation made it difficult to
create a true budget. He remarked that the FY 16 DOC budget
had received substantial reductions; however, he believed
that the overall budget reductions would increase the
workload for DOC and the Department of Public Safety (DPS).
He believed the figures had come from the Evergreen report
on Medicaid expansion. He continued that he was trying to
ascertain the best way to compile a budget on anticipated
funds based on the report. He stressed that if department
budgets were not fully funded based on the expectation that
funds would be received through Medicaid expansion, the
departments may be confronted with significant decrements
they may not have the ability to withstand if anticipated
funds from Medicaid expansion did not come to fruition. He
wondered how the committee was supposed to create a budget
on money that had not been received. He believed it would
be more prudent to have increased clarity in the budget.
3:28:16 PM
Ms. Pitney replied that the budget proposal submitted by
the administration included Medicaid expansion. She
detailed that if the budget was approved there would be
savings exceeding $4 million in the DOC budget. She
continued that if the legislature opted out of Medicaid
expansion, it would be the administration's hope that the
decrements would be restored. The administration was
proposing Medicaid expansion, which would allow for savings
in DOC and DHSS, and the offsets were included in the
proposed budget. She stated that it was up to the
legislature to make a choice on Medicaid expansion.
Likewise, it would be up to the legislature to decide
whether to restore the decrements. She implored the
committee to provide the flexibility proposed in the budget
amendments if the decrements were not restored.
Co-Chair Neuman communicated that the legislature had asked
the administration to propose a separate piece of
legislation [on Medicaid expansion] because the operating
budget had to be approved within several weeks' time. He
stated that the legislature had been given limited
information on Medicaid expansion and reform. He
highlighted the need for information on healthcare costs
and different waiver programs. He was concerned that the
legislature was expected to approve $145 million in the
operating budget without knowing where the money was going
and without knowing about the program. He stressed that
Medicaid expansion was a huge policy issue. He asked for
further information.
Ms. Pitney replied that DHSS had provided several
presentations in hearings and would be happy to discuss the
entire plan with the committee. She agreed that the issue
was a policy call that the administration had included in
the operating budget. She relayed that the administration
was prepared to present in as many committees as the
legislature wanted on how the budget worked and what was
included in relation to Medicaid. She noted that there had
been several hearings to-date and offered to provide the
committee with a list of the hearings.
Co-Chair Neuman rebutted that as an appropriating body, the
legislature could accept, not accept, or amend the funds.
Additionally, the legislature could establish sideboards
that would enable the state to back out if the federal
funding dropped below 90 percent. He stressed that no
guarantees on the issue had been provided.
Co-Chair Thompson thanked Ms. Pitney for her presentation.
He asked her to provide any requested information to Co-
Chair Neuman for distribution to committee members. He
reviewed the schedule for the following day.