Legislature(1995 - 1996)
02/27/1995 01:40 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 137
"An Act making supplemental appropriations for
operating expenses of state government for fiscal year
1995; and providing for an effective date."
HOUSE BILL 178
"An Act making supplemental and special appropriations
for the expenses of state government; making and
amending capital and operating appropriations; and
providing for an effective date."
Co-Chair Hanley provided the Committee with a copy of the
letter received from the Office of Management and Budget
(OMB) regarding the supplemental funding requests of the
Governor. [Attachment #1].
Representative Grussendorf remarked that the supplemental
funding request from the Department of Transportation and
Public Facilities (DOTPF) for the Alaska Marine Highway in
the amount of $739 thousand dollars for repairs and
maintenance to the Columbia ferry was not included. He
warned that the ferry would not be ready for the summer
season without the requested funding.
Representative Grussendorf reminded Committee members that
the ferry generates revenue and that summer schedules have
been published. Co-Chair Hanley noted that at the
recommendation of the DOTPF Subcommittee, that line item was
deleted from the supplemental funding request.
Co-Chair Hanley presented an overview of the letter
submitted from OMB and provided a work draft for HB 137. A
new section for the Citizens' Foster Care Review was added
in the amount of $48 thousand dollars appropriated from the
general fund to the Department of Administration (DOA). The
additional appropriation would provide for the continuation
of the program through June 30, 1995. Also, the sum of
$1,315,780 was requested from the Office of the Governor,
Division of OMB, in order to pay the costs resulting from
salary adjustments compliance with 29 U.S.C. 201-219 (Fair
Labor Standards Act) for the fiscal year ending June 30,
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1993, and FY93, moving from capital improvements project
receipts and general fund.
Representative Mulder MOVED that the committee substitute
for HB 137, 9-GH0036\F, Crammer, 2/27/95, be the version
before the Committee. Representative Brown OBJECTED
explaining that the draft had just been distributed to the
Committee and that no one had the opportunity to review the
material. Representative Brown WITHDREW THE OBJECTION.
There being NO FURTHER OBJECTIONS, CS HB 137 (FIN) was
adopted as the version before the Committee.
DEPARTMENT OF LAW
TINA KOBAYASHI, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, spoke to Section #1, Page 1, Attachment #2, reduction
of $500 thousand dollars for the oil and gas litigation.
She indicated that the budget had been planned based on the
$18 million dollar request being fully funded and that the
reduction would handicap the litigation process.
Representative Parnell explained that the Joint House and
Senate Committee had requested from the Department
additional information in order to review the need for
further funding.
NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, reminded
Committee members that the $18 million dollar request had
been a reduction from the original request of $20.8 million
dollars.
Representative Brown interjected that it would be a mistake
not to fully fund the litigation effort indicating that the
funding would address many cases and that funding would
cover costs for a six month period.
DEPARTMENT OF REVENUE
Co-Chair Hanley noted that Section #2, Page 1, Governor's
amended request for the Mental Health Trust Authority start
up costs in the amount of $298.3 thousand dollars would be
reduced by the House Subcommittee request. The total House
request would be in the amount of $155 thousand dollars.
Ms. Slagle commented that the trustees for the Mental Health
Authority would be appointed next week. She requested when
those trustees are appointed, if additional needs exist, the
trustees could return to the Legislature for additional
funding. Co-Chair Hanley advised the situation would be
considered.
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DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
Co-Chair Hanley referenced Section #3, Page 1 of the
supplemental appropriation, for the fall flooding and the
Disaster Relief Fund. The Governor's amended request was in
the amount of $45.7 million dollars, whereas, the House
Subcommittee request was in the amount of $43.9 million
dollars which would cover costs to date. Co-Chair Hanley
advised that the costs accruing at this time should be
placed in the FY96 operating budget.
JEFF MORRISON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS,
requested further information regarding the Committee's
intent for further funding. Co-Chair Hanley explained that
the Subcommittee had concern with providing 100% state
funding for projects with costs yet undetermined. Mr.
Morrison clarified that traditionally, the interpretation
given to disaster funding, was that once the fund has been
allocated from, that project remains open until the disaster
is financially closed out. He concluded, any funds
remaining would be returned to the Disaster Relief Fund.
Mr. Morrison added, the only reimbursement received from the
federal government has been the 75/25% portion. The federal
government determines eligibility for the 100% funding,
following completion of an audit. The audit will be
completed when the disaster is closed out. Co-Chair Hanley
recommended waiting to pay until the audit was completed.
DEPARTMENT OF CORRECTIONS
Representative Mulder, Department of Corrections
Subcommittee Chair provided supplemental appropriation
budget overview.
Representative Mulder began, Section #4(a), Page 1, the
Governor and House Subcommittee recommend $67 thousand
dollars be funded for the court appointed Cleary monitor.
Section #4(b) request to establish and staff the Office of
the Commissioner in Juneau. The Governor recommended $44.5
thousand dollars, the House Subcommittee recommended zero
funding. Representative Mulder reminded the Committee that
the Subcommittee recommendations reflected court ordered
items, resulting from increased capacity or outside
unanticipated contracts.
Representative Mulder referenced Section #4(c), Page 1,
request in the amount of $98 thousand dollars to the
Commissioner's Office for the estimated cost resolution for
two personnel legal actions, with funding recommended by
both the Governor and the House. Section #4(d) funding in
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the amount of $9.8 thousand dollars for the Board of Parole
was recommended by the Governor, whereas, the House
Subcommittee recommended zero funding.
Representative Mulder referenced Section #4(e), the
supplemental funding request for the Correctional Officers
Training Academy. The Governor's supplemental request was
in the amount of $366.3 thousand dollars which would cover
both a fall and spring training; the House subcommittee
recommended that amount be changed to $172 thousand dollars
in order to cover the cost of the fall training only.
Section #4(f), Page 1, increased costs for inmate health
package, supplemental appropriation request by the Governor
was in the amount of $2.1 million dollars; the House
Subcommittee recommendation was in the amount of $2 million
dollars.
He continued, Section #4(g), Page 1, supplemental request by
the Governor for statewide operations/correctional
industries was requested in the amount of $293.3 thousand
dollars, whereas, the House Subcommittee recommended funding
in the amount of $99 thousand dollars.
Representative Mulder explained that Section #4(h) was
recommended for full funding as requested by the Governor
and the House Subcommittee on Corrections in the amount of
$2.35 million dollars which would cover costs associated
with the Arizona prison contract. Section #4(i)
supplemental request would provide funding for the
Department to hire three additional Administrative Clerk II
positions for the remainder of FY95. The hire would free up
Correctional Officers for safety and security tasks at the
Sixth Avenue Correctional Facility in Anchorage. The
Governor recommended that section be funded at $51.9
thousand dollars, whereas, the House Subcommittee
recommended zero funding of that component.
Section #4(j), Page 1, request would provide two additional
adult Probation Officers plus housing, feeding and clothing
for increased inmate capacity at the Spring Creek facility.
The Governor and the Subcommittee agreed on funding at the
requested amount of $156.6 thousand dollars. Section #4(k)
supplemental request in the amount of $772.3 thousand
dollars was recommended by both the Governor and House
Subcommittee in order to add ten additional positions plus
housing, feeding, and clothing to reduce the vacancy factor
and would also provide for up sizing of 59 beds at the
Wildwood Correctional Center.
Representative Mulder pointed out that Section #4(l), Page
2, supplemental request would reduce the prison vacancy
factor. The Governor's amended request was in the amount of
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$3.1 million dollars, whereas, the House Subcommittee
recommended zeroing out the funding. Section #4(m), Page 2
request was fully funded in the amount recommended by the
Governor and the House Subcommittee for increased CRC
capacity for statewide operations in the amount of $726.3
thousand dollars. Section #4(n), Page 2, would request to
provide an increase for probationary visits to smaller towns
and communities under the Department's supervision for
statewide operations. The Governor's amended request was in
the amount of $31.8 thousand dollars, whereas, the House
Subcommittee requested zero funding. Section #4(o), Page 2,
supplemental request in the amount of $52 thousand dollars
for funding for transferred positions from Wildwood and
would also include food, clothing, and gratuities for
prisoners at Point MacKenzie. Full funding was recommended
by both the Governor and the House Subcommittee.
Representative Navarre pointed out that all the Subcommittee
members did not agree on the deletion of Section #4(d), Page
1, the personal services component. He felt the impact
would result in not implementing the Board's decisions. He
added, that action would keep prisoners in prisons for a
much longer period of time, costing the State more than
funding Section #4(d).
(Tape Change, HFC 95-31, Side 2).
Representative Brown advised without additional funding for
the spring academy, the public's safety could be at risk.
Representative Martin disagreed, stressing that the current
budget for the Department has funds to operate adequately.
MARGARET PUGH, COMMISSIONER, DEPARTMENT OF CORRECTIONS,
responded to the discussion of Representative Brown and
Representative Martin. She spoke to the spring academy
need, emphasizing the necessary standards which the
Department must have for the participating troopers. The
State is obligated to provide the training. Co-Chair Hanley
emphasized that the spending pattern must end. He added, if
the request is not critical to the life, health and safety
of the correctional officers or inmates, it will be denied.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, commented on the impact to each program and the
ramifications of all the changes needing to be absorbed by
the Administration for the next three months. She strongly
recommended that the current Administration can not change
those choices done in the prior Administration. The current
Administration is willing to work in the future with the
funding level established by the Legislature and the amount
spent. She reiterated to ask the Knowles Administration to
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reduce spending established by the Hickel Administration
will create difficulty for the Departments and undue public
safety.
Commissioner Pugh noted that there are currently 207
prisoners housed in Arizona; prison growth continues and
limits are being pushed with those prisoners having left the
state. She added, the Cleary maximum capacity for our
current system is 2,665 prisoners. Beyond that point, the
State would be fined. Currently, the system is immediately
below that figure.
Commissioner Pugh commented on the need for additional
funding for the correctional activities. She explained that
service teaches the prisoners basic life skills, how to keep
a job, how to go back and forth to work, when to get up and
when to go bed. With the increased population in prisons,
the need for increased prison operation jobs expands as a
management tool.
Representative Grussendorf his voiced concern on the cut to
Section #4(n), Page 2. Commissioner Pugh remarked that the
S.E. Region received unallocated cuts in prior years and
without the requested supplemental funding, probation
officers will not be able to travel to the smaller
communities in Alaska particularly in the Southeast region.
Commissioner Pugh noted the Department's most serious
repercussions would result from the zero funding for Section
Committee to reconsider funding a portion of that request.
Representative Mulder pointed out that each facility within
the FY95 budget was fully funded through the Governor's
requested amount, except for the Spring Creek and Wildwood
Centers. He emphasized the amount funded by the Legislature
was the amount requested by the last Administration.
Representative Brown disagreed with Representative Mulder,
stating that there was a divergence between what the
Governor was asking for and what the Legislative budget
actually funded. Representative Navarre noted that if the
spending exceeded the amount given in the first eight months
of the fiscal year, the Department can not make up that
funding in the remaining four months of that fiscal year.
Representative Martin interjected that the Legislature
controls the budget and that spending over and above the
amount allocated should not result in a supplemental
appropriation.
Representative Brown stated that some of the supplemental
requests are due to underfunding of the last budget. Those
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funds were spent because the Department felt that public
safety would be jeopardized as the prison population
continued to grow. Representative Mulder responded that the
numbers he used were those generated by the Legislative
Finance Division. He understood that the shortfalls had
been addressed through the use of fiscal notes. The actual
Governor's FY95 Governor's amended amounts compared to the
FY95 Operating Authorized matches line by line.
Representative Brown argued that those were one time fiscal
notes authorized on a bill and not the base of the budget
funding. She added that the base of the budget was not
adequate to fund the necessary level of employees in order
to maintain safety.
DEPARTMENT OF PUBLIC SAFETY
Co-Chair Hanley pointed out that Section #5, Page 2, the
request to fill ten vacant positions for the Alaska State
Troopers was zeroed out. He indicated that the request had
been a policy call of the Governor and should be included in
the FY96 Operating Budget.
OFFICE OF THE GOVERNOR
Co-Chair Hanley explained Section #1, Page 3, supplemental
request for the Division of Elections for unanticipated
overtime and costs associated with recounts. The Governor's
amended request in the amount of $212.2 thousand dollars was
decreased by the House Subcommittee request of $170 thousand
dollars.
(Tape Change, HFC 95-32, Side 1).
DEPARTMENT OF ADMINISTRATION
Representative Kohring, Chairman of the Department of
Administration Subcommittee provided an overview of the
supplemental recommendations for that Department. Section
deleted. Section #3, Page 3, Office of Public Advocacy/OPA,
Governor's request in the amount of $530 thousand dollars to
cover operational shortfalls, was reduced by the House
Subcommittee in the amount of $200 thousand dollars.
He continued, Section #4, Page 3, Public Defender request to
cover the operational shortfalls, the Governor's amended
request was in the amount of $125 thousand dollars, whereas,
the House Subcommittee recommended reducing the request to
$50 thousand dollars. Representative Kohring advised that
Section #5, Page 3, Retirement and Benefits/EPORS system
request would cover the operational shortfall for one
legislator. The Governor requested supplemental funding in
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the amount of $37.5 thousand dollars, whereas, the House
Subcommittee recommended funding of $27.5 thousand dollars
which would provide funding for the insurance portion of the
request.
Section #4, Page 3, the leasing and facilities request by
the Governor and the House Subcommittee for full funding
supplemental request in the amount of $93 thousand dollars
to cover operational shortfalls. Representative Kohring
added, Section #7, Page 3, the Alaska Public Officers
Commission, the Governor's amended supplemental request in
the amount of $49.5 thousand dollars, whereas, the House
Subcommittee recommended $35 thousand dollars to address the
hearing for the Gravo case. He admitted that hearing funds
were justified although he felt that the amount requested
was too high. Section #8, Page 3, Personnel EEO/Personnel
EEO supplemental request funding to be used for labor
arbitration costs, the Governor's requested $139.6 thousand
dollars, whereas, the House Subcommittee recommended zeroing
the amount out. Representative Kohring ascertained that the
need was not emergency in nature and that those costs should
be addressed in the FY96 Operating Budget.
Representative Grussendorf questioned the recommended cut to
Section #8, Page 3, advising that the FY96 Operating Budget
request would include program receipts generated from
negotiations of the contract requests.
Ms. Slagle stated that Section #8 were arbitration costs
dealing with employee grievances. The courts have made a
determination that the State has failed in the efforts to
deal with clearing up the arbitrations. The supplemental
request was a portion of the effort of the current
Administration to comply with the court ruling.
SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF ADMINISTRATION, explained to
Representative Grussendorf that there was not a direct
connection between the labor negotiations and the
arbitration costs. She added, although the request
establishes the States credibility with the Unions.
Representative Brown noted her concern with the decreased
funding of Sections #3 and #4, Office of Public Advocacy and
the Public Defender. She asserted that these issues are not
discretionary, they are constitutional rights. Ms. Barton
added, these costs must be paid, either now or later. Both
programs have been managed tightly and not funding the
supplemental request fully will not save the State money.
The result will end in a court appeal in order to defer the
case.
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DEPARTMENT OF LAW
Co-Chair Hanley stated that in Section #9, Page 3,
supplemental request for the Mental Health Lands, the amount
recommended to be funded would be the amount due. The
additional amount of $435 thousand anticipated costs for the
non settling plaintiffs for the court of appeals was not
considered by the Subcommittee. Those costs have not been
reduced to judgments to date.
Ms. Slagle pointed out that the Governor's request included
estimated costs for the fiscal year. Historically, those
costs were funded in the supplemental request.
Representative Martin questioned the increased departmental
costs during the last six months.
BARBARA RITCHIE, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW,
advised that there were many substantial costs at the end of
the procedure resulting from a large booklet mailing
throughout the State and an appeal file.
Co-Chair Hanley referenced Section #10, Page 3, Legal
Service operations request amount to repay the federal
government for inappropriate cost allocations in the amount
of $500 thousand dollars as recommended by the Governor and
the House Subcommittee. Section #11, Page 3, Legal Service
operations request for judgments and claims request by the
Governor in the amount of $4.3 million dollars, whereas, the
House Subcommittee request in the amount of $494 thousand
dollars be funded. Ms. Ritchie provided the Committee with
a handout listing the current judgments in the Department of
Law. [Attachment #3].
Co-Chair Hanley directed the Department of Law to testify
regarding the supplemental requests not contained in the
handout. He stated that an amendment would be drafted to
include the amount requested by the Department.
SUSAN COX, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW,
explained the statutes which specifically govern commercial
fishing and regulations. The Courts had been applying a
general statute, Title XVI, which provided that courts could
fine people up to $5 thousand dollars. Many fines were
ordered. In 1987, the Court of Appeals determined that the
ceiling for violations was in effect until the Legislature
enacted the law in 1988 which passed a statute regarding
penalties for commercial fishing violations. In the
meantime, there have been four court of appeal decisions.
The class actions have consisted of three subsections.
Co-Chair Hanley stated that the House Subcommittee did not
recommend funding Section #12, Page 3, the Gubernatorial
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election lawsuit which the Governor requested in the amount
of $50 thousand dollars.
ALASKA COURT SYSTEM
ARTHUR SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA JUDICIAL
COUNCIL, ALASKA COURT SYSTEM, testified to Section #60, Page
7, the Court System for the North Slope Royalty case and
grievance settlement. The Governor's amended request was in
the amount of $158.6 thousand dollars, whereas, the House
Subcommittee request was in the amount of $120 thousand
dollars. He pointed out that the $40 thousand dollar
disparity will short the oil and gas litigation fund. He
urged the Committee to reconsider the reduced allocation to
that Department's supplemental funding.
Co-Chair Hanley asked if one judge would be shifted for the
trial. Mr. Snowden replied that Judge Carpenetti from
Juneau would be trying the case for six months. It was the
intent of the Court System to bring a retired judge in order
to handle the Juneau case load. The entire Juneau caseload
will increase for the next six months by sixty percent. At
this point, the back log is over a year and a half.
DEPARTMENT OF REVENUE
Representative Martin, Subcommittee Chair, overviewed the
Department of Revenue proposed supplemental budget. Section
Gaming Task Force meetings was zeroed out by the House
Subcommittee. Section #14, Page 3, the Governor's
supplemental request in the amount of $15 thousand dollars
was also zeroed out by the House Subcommittee for the
license denial appeal costs in the Alcohol Beverage Control
Board (ABC) Egegik hearing. Section #15, Page 3, treasury
management for additional safekeeping and debt management
advisor fees was initially zeroed out by the House
Subcommittee, although, Representative Martin asked for
reconsideration of that component. The Governor's requested
amount of funding is $259.5 thousand dollars.
Representative Martin continued, Section #16, Page 4,
supplemental request of the Governor's amended for the
Permanent Fund Dividend for additional data processing costs
in the amount of $91 thousand dollars was zeroed out by the
House Subcommittee. Section #17, Page 4, supplemental
request by the Alaska Mental Health Trust Authority for
additional costs requested by the Governor in the amount of
$283.1 thousand dollars was also zeroed out by the House
Subcommittee.
BOB BARATKO, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
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DEPARTMENT OF REVENUE, replied that the deletion of Section
enforcement component of the division. Also, he continued,
the deletion of Section #14 in which the ABC Board will not
be able to have the appeal in accordance with the statute
will be difficult, pointing out that the budget for appeals
has currently been expended. The community has a right to
request a hearing within their community. This request is
for a non issuance of a license, a local option, therefore,
that population has the right to testify. Co-Chair Hanley
recommended testifying via teleconference.
Mr. Baratko emphasized how important funding of Section #15
was. Those fees were removed from the budget three years
ago and made an off budget item. The two functions of that
division are tied together; currently, there exists a lack
of management capabilities. The substance of the bond
account is not changeable and the accounts need to be
separated, whereas, volatility exists and the State will be
vulnerable without funding this request. Representative
Martin suggested approving the request.
Representative Grussendorf recommended better educating the
public and the legislators about charitable gaming with the
growing increase to that industry. The task force as
recommended by the Governor would be able to provide
education to interested parties. He affirmed that the
supplemental request was minimal in relationship to the
profits which could be made for the State by funding that
request. Representative Martin agreed that the amount of
money generated through charitable gaming was large. He
added, with the legalization of pull tabs, the increase has
quadrupled. His major concern is the choice of persons
chosen for that task force. Representative Navarre stressed
that removing funding from the audit portion of charitable
gaming would be unacceptable; the State is required to
perform that function.
Co-Chair Hanley agreed that the task force was a beneficial
idea, although, that funding should be contained in the FY96
Operating Budget. Mr. Baratko clarified that the first
meeting of the task force has been scheduled and public
noticed given for March 16, 1995. Co-Chair Hanley urged
that the Governor not take the funds necessary for the task
force out of the audit function of the Department.
Representative Martin recommended that the high revenue
generating vendors pay the costs of the task force.
(Tape Change, HFC 95-32, Side 2).
DEPARTMENT OF EDUCATION
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Co-Chair Hanley explained Section #18, Page 4, K-12
Support/Foundation Program for increased student enrollment
as requested by the Governor in the amount of $2 million
dollars, House Subcommittee recommended zero funding. He
thought that the Department should adjust the units to
illustrate the difference between the fall and spring
student count.
Ms. Slagle advised that the districts do have a drop in the
spring count. Although, those districts do have hired staff
on contract for the level of students they had in the fall.
A reduction can not be made in the middle of the year.
Representative Kohring, House Subcommittee Chair for
Education, explained Section #19, Page 4, education program
support for the federal vocational education grants was
recommended to be zeroed out by the House Subcommittee. He
understood that it was a temporary request. Section #20,
Page 4, additional funding for the WAMI program for Alaska
Postsecondary Education, Governor's supplemental request in
the amount of $22.2 thousand dollars was zeroed out by the
House Subcommittee. Representative Kohring recommended that
those funds be taken from another account.
Representative Kohring concluded, Section #21, Page 4,
supplemental request in the amount of $1.8 million dollars
was accepted at the Governor's request by the House
Subcommittee. He pointed out the emergency nature of the
request. Many children have experienced ill effects by the
contaminated water. He added that the clean up costs should
come from the Oil and Hazardous Waste Clean Up Response
Fund.
HB 178 and HB 137 were HELD in Committee for further
discussion.
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