Legislature(2007 - 2008)SENATE FINANCE 532
04/12/2007 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB 61 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 61 | TELECONFERENCED | |
| += | HB 95 | TELECONFERENCED | |
| += | HB 96 | TELECONFERENCED | |
| + | TELECONFERENCED |
MINUTES
SENATE FINANCE COMMITTEE
April 12, 2007
9:09 a.m.
CALL TO ORDER
Co-Chair Lyman Hoffman convened the meeting at approximately
9:09:37 AM.
PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Senator Fred Dyson
Also Attending: TOM MAHER, Staff to Co-Chair Hoffman; JANET
CLARKE, Assistant Commissioner, Finance and Management Services,
Department of Health and Social Services; EDDY JEANS, Director,
School Finance and Facilities Section, Department of Education
and Early Development.
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
SB 61-SUPPLEMENTAL APPROPRIATIONS
This was the second hearing for this bill in the Senate Finance
Committee. The Committee heard from the Department of Health and
Social Services and the Department of Education and Early
Development. The bill was held in Committee.
9:09:41 AM
SENATE BILL NO. 61
"An Act making appropriations for qualified regional
seafood development associations, for investigation and
litigation relating to the public employees' retirement
system and the teachers' retirement system, and for a
special advisory election; and providing for an effective
date."
9:12:03 AM
Co-Chair Hoffman introduced the Senate Finance Committee
substitute for SB 61 and identified an accompanying spreadsheet.
9:12:36 AM
TOM MAHER, Staff to Co-Chair Hoffman, informed that the
committee substitute contained new items in addition to items
previously reviewed during hearings on SB 61, the "fast track"
supplemental appropriation bill, and SB 83, the "time sensitive"
supplemental appropriation bill.
Mr. Maher noted that the funding for the Fairbanks virology
laboratory had been omitted from the current committee
substitute. He summarized the total appropriation amount
contained in SB 61 as $1,006,893,600 in general funds, $21,
482,500 in federal funds, and $1,765,400 in other funds, for a
total of $1,030,141,500.
Mr. Maher set forth that Section 1 of the bill was a new
appropriation of $1 billion to be deposited in the public
education fund. Those monies were "carryforward" dollars from
the current fiscal year (FY), FY 07.
9:14:54 AM
Co-Chair Hoffman remarked that this appropriation was an attempt
to "semi-save" funds received from the Petroleum Profits Tax
(PPT) by depositing them into the public education fund as a
savings account. The action had been initiated last year by the
24th Legislature, and would act to reassure the public that the
State was not engaging in a "spending spree".
9:16:15 AM
Senator Dyson asked for a list of the schools that could receive
funds from this deposit, specifically whether charter schools
would be eligible.
9:16:51 AM
Mr. Maher responded that the language in the bill was consistent
with current statute governing the public education fund, and
referred to a "central correspondence school". He was unsure if
such an entity still existed, but the language was included to
conform to statute.
Senator Dyson would research his question before the Committee
took action on the bill.
9:17:44 AM
Mr. Maher reported that Section 2(a) was originally included as
Section 1 of SB 61, and was a tax "pass through" for regional
seafood development corporations. The $153 million in other
funds would be used for tax assessments, and had been "left out"
of the budget the prior year.
9:18:21 AM
Mr. Maher relayed that Section 2(b) of the current committee
substitute was initially requested in Section 1 of SB 83, and
would provide funding to the Regulatory Commission of Alaska for
continued litigation efforts before the Federal Energy
Regulatory Commission (FERC). The supplemental appropriation
amount for FY 07 would be $750,000, with $600,000 requested in
the FY 08 regular Operating budget. The Committee opted to
include the requested $600,000 in the supplemental budget rather
than in the FY 08 operating budget and to extended the lapse
date associated with the funds to avoid a possible increase in
fees.
9:19:34 AM
Mr. Maher spoke to Section 3(a) of the bill, originally
requested in Section 1(c) of SB 83, relating to the Department
of Corrections inmate health care costs. The allocation totaled
$3,903,400, but could be increased by the Palin Administration
as the cost estimates were in flux. Any additional needs would
be funded in a "final appropriation bill".
9:20:16 AM
Co-Chair Hoffman understood the Department could require a
further $1 million in addition to this appropriation.
Mr. Maher affirmed.
9:20:27 AM
Mr. Maher pointed out that Section 3(b) of this bill was
incorporated from Section 1(d) of SB 83, and would provide
$1,082,700 to the Anchorage Correctional Complex to assist in
addressing overpopulation issues.
9:20:50 AM
Mr. Maher explained that Section 4(a) was a new appropriation to
the Department of Health and Social Services, Office of the
Commissioner in the amount of $2,315,000 for operating costs
associated with implementing the recommendations of the
legislative Medicaid review report. This multi-year funding
would provide for efforts from 2007 through 2009 to obtain the
potential Medicaid savings identified in the review report.
9:22:09 AM
JANET CLARKE, Assistant Commissioner, Finance and Management
Services, Department of Health and Social Services, testified
that she had collaborated with Jerry Fuller of the Office of
Program Review within the Department to develop funding and
execution plans to implement the recommendations in the Pacific
Health Policy Group report. She directed attention to a
memorandum from herself to the Committee chairs, dated March 28,
2007 [copy on file], and an accompanying one page summary
spreadsheet.
Co-Chair Hoffman asked that she provide an overview of the
projects associated with the Medicaid review report funding.
9:23:32 AM
Ms. Clarke referred members to the spreadsheet of the
aforementioned memorandum, and indicated that 13 projects would
be allocated funding under this appropriation.
Co-Chair Hoffman clarified that the spreadsheet was located on
the last page of memorandum. The spreadsheet depicted the
following.
Project #: 1
Projects in Medicaid Report: Tiered Pharmacy Pricing
Who/How: DHSS-Internal
Fiscal Year: FY07/08/09
Total Cost: 0.0
Comment: No new resources needed
Project #: 2
Projects in Medicaid Report: Pharmacy Prior Authorization
Who/How: DHSS-Internal
Fiscal Year: FY07/08/09
Total Cost: 0.0
Comment: No new resources needed
Project #: 3
Projects in Medicaid Report: Level of Care controls in
Personal Care Assistant program
Who/How: DHSS-Internal
Fiscal Year: FY07/08/09
Total Cost: 0.0
Comment: No new resources needed
Project #: 4
Projects in Medicaid Report: Alternate Reimbursement
Methodology for DD services
Who/How: DHSS-Internal
Fiscal Year: FY07/08/09
Total Cost: 0.0
Comment: No new resources needed
Project #: 5
Projects in Medicaid Report: Implement Disease Management
Program
Who/How: DHSS-Internal
Fiscal Year: FY07/08
Total Cost: 80,000
Project #: 6
Projects in Medicaid Report: Personal Care Assistant
Waivers
Who/How: DHSS-Internal
Fiscal Year: FY07/08/09
Total Cost: 0.0
Comment: No new resources needed
Project #: 7
Projects in Medicaid Report: Federal Financial
Participation in Pioneer Homes
Who/How: DHSS-Contractor
Fiscal Year: FY07/08
Total Cost: 50,000
Project #: 8
Projects in Medicaid Report: Address Wait List for DD
Services
Who/How: DHSS-Contractor
Fiscal Year: FY07/08
Total Cost: 20,000
Project #: 9
Projects in Medicaid Report: Federal Funds Participation
for CAMA
Who/How: DHSS-Contractor
Fiscal Year: FY07/08
Total Cost: 20,000
Project #: 10
Projects in Medicaid Report: Substance Abuse/Mental Health
Waiver
Who/How: DHSS-Contractor
Fiscal Year: FY07/08
Total Cost: 35,000
Project #: 11
Projects in Medicaid Report: Long Term Care Planning
Who/How: DHSS-Contractor
Fiscal Year: FY07/08
Total Cost: 250,000
Comment: $50,000 GF already exists in DHSS
Project #: 12
Projects in Medicaid Report: Other Resources
Who/How: DHSS-Internal
Fiscal Year: FY07/08
Total Cost: 136,000
Comment: State coordination of project
Project #: 13
Projects in Medicaid Report: Increase Rural Providers
Federal Funds participation
Comment: Estimates of costs provided by rural providers
Projects in Medicaid Report: 13-a Managed Care
Who/How: Grant to ANTHC
Fiscal Year: FY07/08
Total Cost: 50,000
Projects in Medicaid Report: 13-b Specific Service
Plan/Definitions
Who/How: Grant to ANTHC
Fiscal Year: FY07/08
Total Cost: 700,000
Who/How: Additional Grant
Fiscal Year: FY07/08
Total Cost: 214,000
Comment: Grant to Regional Provider
Projects in Medicaid Report: 13-c Reimbursement methodology
Who/How: Grant to ANTHC
Fiscal Year: FY07/08/09
Total Cost: 250,000
Who/How: Additional Grant
Fiscal Year: FY07/08/09
Total Cost: 138,000
Comment: Grant to Regional Provider
Who/How: DHSS-Internal State
Fiscal Year: FY07/08/09
Total Cost: 372,000
TOTAL COSTS: 2,315,000
Comment: Costs to DHSS can be funded at 50% federal thru
Medicaid
State General Fund costs: 1,132,500
Ms. Clarke explained that projects one through four and project
six could be accomplished internally without additional
resources by utilizing existing staff.
9:25:59 AM
Ms. Clarke informed that the Disease Management Program was an
innovative approach that focused on disease prevention. Alaska,
along with many other states, had made progress on this front,
and the funding would allow for continued efforts.
9:27:01 AM
Ms. Clarke spoke to the seventh project listed, Federal
Financial Participation in Pioneer Homes. When the Pioneer Homes
were moved into the Department in FY 2004, "extensive" efforts
were exerted to increase Medicaid participation for eligible
Pioneer Home residents. This funding would assist in this
endeavor.
9:27:53 AM
Ms. Clarke summarized Project #8, and told that the funding
would support the Department in its goal of reducing the wait
list for those who receive services to assist with developmental
disabilities (DD).
Ms. Clarke informed that the ninth project would examine the
CAMA program to possibly modify the State-funded program into a
federally-funded Medicaid program.
9:29:01 AM
Co-Chair Hoffman asked for a definition of the "CAMA" program.
Ms. Clarke defined CAMA as the Catastrophic and Medical
Assistance program, which provided service for "very, very poor"
uninsured individuals with chronic conditions who were not
Medicaid eligible.
Ms. Clarke told that Project #10 would explore the potential for
federal waivers relating to substance abuse and mental health
expenditures.
9:30:02 AM
Ms. Clarke set forth that Long Term Care Planning, listed as
Project #11, was identified in the Pacific Health Policy Group
as an area that could be eligible for "significant federal
dollars." The request would fund contractor support, and is in
addition to $50,000 currently in the Department's budget. This
project would likely result in the largest "payoff" to the State
in terms of general fund savings.
9:30:41 AM
Ms. Clarke characterized the implementation of these
recommendations as "comprehensive", and noted that the twelfth
request would provide funds to monitor the overall progress of
the Medicaid plan.
9:31:12 AM
Ms. Clarke explained that Project #13 addressed prospective
savings related to rural providers. She spoke to the three
subsections, noting that grants were included for both the
Alaska Native Tribal Health Consortium and for regional
providers.
Ms. Clarke informed that the total amount of this request was
$2,315,000, 50 percent of which was reimbursable through a
federal Medicaid administrative claim.
9:33:33 AM
Co-Chair Hoffman commented that this was a "small amount of
funds" considering the growth of the Medicaid and Medicare
programs in recent years, and the continued expansion of
services to eligible Alaskans. The Pacific Health Policy Group
study and this subsequent appropriation represented an attempt
to control and manage costs.
9:34:39 AM
Senator Olson inquired regarding Project #8, the DD wait list,
and asked if the Department would consider the age of the
recipient.
9:35:04 AM
Ms. Clarke responded that the wait list for DD services
currently included people who were on wait list for Medicaid
services or not eligible for those federally funded services due
to current screening requirements. The State pays for those
services through the use of grants of general funds. For others,
such as children with autism, early diagnosis and treatment
could improve their prognosis. It may be possible to expand
Medicaid eligibility to include these individuals, thereby
reducing general fund expenditures. The project would assist
Alaskans of all ages.
9:36:27 AM
Mr. Maher identified Section 4(b) as Section 1(g) of SB 83,
which would add language to the Juneau Pioneer Home's allocation
to allow for repair and replacement by adding the word "repair"
to the section.
9:37:09 AM
Mr. Maher communicated that Section 5 was an amended
appropriation from SB 61 Section 2, and would pay the Department
of Law for investigatory work performed in relation to the
State's former actuary, Mercer Human Resource Consulting. The
appropriation was drawn from the Public Employees' Retirement
System and the Teachers' Retirement System.
9:37:58 AM
Mr. Maher stated that Section 6 was incorporated from SB 83
Section 1 (h) through (m). These proposed appropriations were
requested by the Governor, and included a language addition in
subsection (g) relating to the Chitina Personal Use Dip Net
Fishery.
9:38:34 AM
Mr. Maher spoke to Section 7, which had previously been included
in SB 61 as Section 3. This allocation would provide funds to
the Division of Elections to pay for costs associated with the
April 3, 2007 special advisory election. The initial funding
request was for more than $1 million, but had been revised to
$775,000.
9:39:12 AM
Co-Chair Hoffman announced that the Committee would discuss two
items that were not included in SB 61. These items were the
Fairbanks Virology Laboratory and an appropriation for the
Chenega Bay School.
Mr. Maher informed that the virology laboratory had previously
been included in another appropriation request, and the funding
for the Chenega Bay School was a new consideration.
9:40:11 AM
Ms. Clarke explained that the Department had requested as "time
sensitive" in SB 83 funding for cost over-runs in the
construction of the virology laboratory. The Department of
Health and Social Services was informed by the Department of
Transportation and Public Facilities that the "notice to
proceed" would be withheld from the contractor until the total
necessary funding was provided. When the Department learned that
the funding was not included in the supplemental budget, a
conversation occurred with the Department of Transportation and
Public Facilities regarding the cost to delay the project. The
Department of Transportation and Public Facilities informed that
any delay past May 1, 2007 would result in an estimated cost of
$10,000 per day. She noted that an estimate was also provided
for a delay into the next fiscal year, and this information was
provided to the Committee in a memorandum from the Department of
Health and Social Services dated April 11, 2007 [copy on file]
distributed to Members previously that day.
9:42:34 AM
Co-Chair Stedman had not seen that memorandum, and asked for a
"break down" of the $10,000 per day delay cost quoted.
Ms. Clarke replied that the quote from the Department of
Transportation and Public Facilities was not delineated, the
cost was based on the assumption that any delay would push
construction costs into the winter season, thus requiring more
over-time expenses.
9:43:11 AM
Ms. Clarke clarified that the contractor was prepared to begin
construction, but had not yet been given notice to proceed. This
predicament was the source of the delay costs.
9:43:41 AM
Co-Chair Stedman asked if there existed "flexibility" in the
contractual arrangement to avoid the delay costs.
Ms. Clarke responded that the Department of Health and Social
Services would have to confer with the Department of
Transportation and Public Facilities, as that department was
managing the contract.
Co-Chair Stedman requested information regarding the contractual
arrangement and the "bid documents".
9:44:29 AM
Ms. Clarke shared knowledge of "concern" within the Department
of Transportation and Public Facilities in regards to the
funding for the laboratory, and informed that the construction
schedule was "very tight".
9:45:09 AM
Senator Elton asked if savings could be achieved if construction
began prior to May 1, 2007.
Ms. Clarke would research that question with the Department of
Transportation and Public Facilities.
9:45:52 AM
Senator Thomas asked if Ms. Clarke received an explanation from
the Department of Transportation and Public Facilities as to why
the virology laboratory funding was removed from the
supplemental appropriation bill.
Ms. Clarke had received no such explanation.
Senator Thomas furthered, asking if the funding referred to was
the ultimate request for the final stage of construction.
Ms. Clarke affirmed, stating that the current request
represented the "final number".
9:46:50 AM
Senator Olson asked regarding penalties related to construction
delays.
Ms. Clarke was unsure, but would examine the question with the
Department of Transportation and Public Facilities.
9:47:16 AM
EDDY JEANS, Director, School Finance and Facilities Section,
Department of Education and Early Development, explained that
the requested funds were to be used to replace the roof of the
Chenega Bay School. The repairs had already been completed, but
the school district did not have the funds to pay the contractor
for the work that was done, thus the district was making monthly
interest payments to the contractor in anticipation of a
supplemental appropriation.
AT EASE 9:48:39 AM/9:53:12 AM
Co-Chair Hoffman concluded the hearing on SB 61. He announced
that the Committee would take action on the bill at a later
time.
ADJOURNMENT
Co-Chair Lyman Hoffman adjourned the meeting at 9:54:52 AM
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