Legislature(2019 - 2020)ADAMS ROOM 519
02/20/2020 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 | |
| HB205 || HB206 | |
| Governor's Fy 21 Operating Budget Amendments | |
| HB234 | |
| Governor's Fy 20 Supplemental Budget Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 205 | TELECONFERENCED | |
| += | HB 206 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 234 | TELECONFERENCED | |
HOUSE BILL NO. 205
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; 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. 206
"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."
1:34:31 PM
^GOVERNOR'S FY 21 OPERATING BUDGET AMENDMENTS
1:34:34 PM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced the PowerPoint
Presentation: FY2021 Governor's Amended Budget Overview."
He began with the chart on slide 2 showing an updated
Office of Management and Budget (OMB) fiscal summary that
included the supplemental, capital, and operating
amendments. He indicated the total difference was not noted
on the slide. The amendments offered by the governor for
FY 21 totaled $45.3 million in unrestricted general funds
(UGF) and $42.5 million in all funds. He reported that the
total for the FY 21 capital budget equaled $4.6 million UGF
and $2.8 million all funds. He relayed that the
supplemental budget for FY 20 totaled $30.5 million UGF and
$815.9 million from the Permanent Fund (PF) Earnings
Reserve Account (ERA).
Mr. Steininger continued to slide 3 listing the amended
statewide items. The first item dealt with the calculation
for the FY 21 salary adjustments which were initially
calculated in the prior November and inadvertently included
some other factors in the base. The salary adjustment was
misstated higher than it should have been. There were
several minor changes to the salary adjustments totaling a
reduction of $300,300 in UGF and other fund sources. He
indicated it had been a clerical error by OMB as it
calculated the impacts of bargaining agreements.
Co-Chair Foster recognized the committee had been joined by
Representative Carpenter.
Mr. Steininger explained that in the fund transfer section
of the bill, OMB included an amendment that would deposit
the remaining balance of the Alaska Fish and Game Revenue
Bond Fund into the Fish and Game Fund. The amount in the
redemption fund was enough to pay off the outstanding debt
on the bonds with a residual amount left in the fund of
between $4 million to $6 million. The funds needed to be
spent on other sport fish related activities. Therefore,
OMB planned to deposit the remaining balance into the Sport
Fish Enterprise Account within the Fish and Game Fund.
Co-Chair Johnston asked Mr. Steininger to share the terms
of the paper being paid off. Mr. Steininger did not recall
all of the details. However, he offered that once the
balance of the redemption fund was enough to payoff the
bonds, the state would do so. The balance would be high
enough in FY 21 to pay off the outstanding principle.
Mr. Steininger conveyed that in the debt service section
OMB included $55 million to pay financing on oil and gas
tax credit bonds assuming that the outcome of the pending
legislation was in the state's favor. Included was a
transfer of $815.9 million from the ERA to the Permanent
Fund Dividend (PFD) Fund for the PFD payment equal to the
shortfall amount in calendar year 2019.
1:38:36 PM
Representative Knopp asked about the debt service for the
oil and gas tax credits and how the state would be affected
if the sale did not occur. Mr. Steininger responded that
should the judgement not fall in the state's favor, the
legislature would have to come back to appropriate funds to
cover the statutory obligation to pay down the tax credits.
Representative Knopp asked if the outcome would be known
before the budget cycle was completed. Mr. Steininger could
not speculate when a decision would be made.
Co-Chair Johnston referred to the transfer of $816 million
on slide 2. She clarified that the Percentage of Market
Value (POMV) draw from the ERA to the general fund (GF)
included the $816 million. Mr. Steininger responded that
the fiscal summary was collapsed to fit on the slide. He
indicated that behind the detail to the POMV draw was
detail on the ERA draw as set out in statute the portion
that went to the dividend. The slide showed the amount
available for state operations.
Co-Chair Johnston referred to the $510 million deficit
reflected on the slide. She wondered if there would be an
additional deficit without the draw from the ERA (a draw
beyond the structured draw). Mr. Steininger explained that
the slide only showed the amount available for statewide
operations. It did not include the dividend within the
fiscal summary.
Co-Chair Johnston referred back to slide 3. She asked if
Mr. Steiniger was referring to an ad-hoc draw without
operations. Mr. Steininger responded, "Correct."
Representative Merrick believed the administration offered
legislation, HCR 13 [Legislation introduced in 2020 Short
Title: Support Future of Permanent Fund/Dividend]. She
wondered if the bill had the same PF distribution
information as reflected on the slide.
Mr. Steininger assumed she was speaking of the substantive
bill that would determine the eligibility for the payment
of the back-pay portion of the dividend in the current
year. He wondered if that was what the representative was
referring to.
Representative Merrick asked if the figure was for the back
pay for the dividend from the prior year. Mr. Steininger
responded in the affirmative. He confirmed that there was a
bill in play that would set the eligibility for individuals
who would receive the back-pay if they received the
dividend in 2019 and were eligible in 2020.
Representative Merrick clarified that whoever was eligible,
per the bill, would receive a portion. Mr. Steininger
responded, "Correct." Representative Merrick queried the
amount. Mr. Steininger responded that it was about $1042.
1:42:39 PM
Co-Chair Foster referred to the oil tax and an amount of
$55 million. He suggested that if the court struck down the
bond program, one of the options would be for the
legislature to pay the statutory minimum. He asked for the
statutory minimum amount. He thought the figure was
approximately $166 million.
Mr. Steininger agreed with the number suggested by Co-Chair
Foster.
Representative Josephson referred to oil tax credits. He
provided a brief history of the oil tax changes since he
had been in the legislature. He suggested that if he had
been asked in the prior year why the state had not paid
anything, he would have responded that there was litigation
pending and the payment was subject to appropriation. He
wanted to pay what was owed. He wondered how to explain why
the legislature would be paying if the state were to lose
the litigation. He pondered how to explain the situation to
his constituents.
Mr. Steininger suggested responding that the state did not
pay oil tax credits because it did not have certainty in
the outcome of the litigation. The outcome of the
litigation would dictate the state's path into the future.
Representative Knopp commented that the PFD draw was
obviously a way of complying with a perceived statute or to
fulfill a campaign promise. He suggested that following the
old statutory formula for calculating the dividend clearly
violated the provisions of SB 26 [Legislation passed in
2018 establishing a Percent of Markey Value draw for state
operating expenditures]. He suggested that the budgeting
process was flawed because of the conflicting statutes. He
thought the legislature should really be talking about
actual revenues and expenditures. He asserted the waters
were being muddied.
1:46:39 PM
Co-Chair Johnston asked what the state's responsibility
would be if it lost the lawsuit. Mr. Steininger thought the
obligation would be about $166 million. He could get back
to the committee with an exact amount. Co-Chair Johnston
clarified that the amount was over $160 million. Mr.
Steininger responded in the affirmative.
Mr. Steininger reviewed the changes for the Department of
Administration (DOA) on slide 4. There was an amendment for
an additional $1 million in other funds for a third-party
claims' administrator contract within the Division of
Retirement and Benefits. He reported $169,000 of UGF
related to mandatory patient-centered outcomes research
institute dues that must be paid under the Affordable Care
Act. In the Office of Public Advocacy there was a new
Alaska Mental Health Trust Authority (AMHTA) item.
Throughout the presentation there were a handful of new
recommendations received from AMHTA after the budget
release in December. There was a request for funding for a
public guardian position. He also noted there was program
receipt authority for increased collection activity and
vendor fee revenue within the Shared Services Alaska
Initiative. He pointed to the $500,000 DGF which would help
offset costs that would otherwise be billed out to agencies
throughout the state. In the Office of Information
Technology there was a transfer of a position related to
the State of Alaska Telecommunications System (SATS). The
position was being transferred to the Department of
Military and Veterans Affairs.
Co-Chair Johnston referenced the AMHTA funds. She was aware
of a number of positions that were not match-funded in the
Department of Health and Social Services (DHSS) and in the
Department of Administration (DOA). She thought the amount
was close to $4 million. She asked if the $91,000 UGF were
matching funds for AMHTA. She asked Mr. Steininger for
further clarification.
Mr. Steininger replied that the $91.5 million was AMHTA
receipt authority. He indicated there were several other
areas within the budget in which the AMHTA had recommended
use of its money.
Co-Chair Johnston asked if the money was matching UGF
dollars to AMHTA funds. Mr. Steininger responded, "No it is
not."
1:49:43 PM
Mr. Steininger moved to slide 5 showing the changes for the
Department of Commerce, Community and Economic Development
(DCCED). He explained that there was a technical
correction. He indicated that when the Alaska Oil and Gas
Conservation Commission (AOGCC) was transferred to DCCED a
couple of technical items got lost in the shuffle. He
relayed that $224.8 million DGF were transferred from the
Department of Law to AOGCC for support to and payment for
services the commission provided. He continued that there
was also carry-forward language in the numbers section of
the bill in which OMB had added an amendment. The language
previously existed but was not carried over when the
appropriation was moved into the department.
Representative Merrick clarified that she had incorrectly
stated the bill regarding the supplemental payments of the
PFD. She indicated the correct bill number was SB 205
[Legislation introduced in 2019 - regarding a supplemental
PFD for 2019 recipients].
Co-Chair Foster asked if further clarification was needed.
Mr. Steininger responded that he thought the intent of the
bill had been addressed previously in the meeting.
1:51:15 PM
Mr. Steininger reviewed the changes for the Department of
Corrections (DOC) on slide 6. He reported a net reduction
in the department of $13.4 million. The change reflected a
reduction of the out-of-state contract appropriation in the
amount of $17.8 million associated with sending prisoners
out of state. The amount had been offset by some fixed cost
increases by the department that would be experienced in
FY 21. He continued that $3.2 million was listed under the
Health and Rehabilitation Office and related to risk
management cost increases. The department had seen
insurance claim increases which increased the risk
management allocation amount.
Representative Josephson thought the reduction was a wise
move. He thought it reflected the need to house and feed a
certain number of prisoners out of state. He wondered where
the costs were reflected since prisoners would remain in
the state. He asked if the costs were covered in the
existing bill and were adequate.
Mr. Steininger responded that it was covered in the
term-year extension of the appropriation to re-open the
Palmer Correctional Facility. He explained that extending
the term-year and spending the money to re-open the
facility, the department did not have to find the money
elsewhere in its budget. There was also additional money
within the institution director's office that would be used
to cover the cost of housing inmates. The department looked
at its projections for the number of inmates it expected in
FY 21 and did not need further adjustment within the
institutions. As long as the department was able to cover
the fixed cost increases it would not have to bill the
institution for the costs.
Mr. Steininger discussed the changes for the Department of
Education and Early Development (DEED) on slide 7. There
was an adjustment to the amount of technical and vocational
education funding that the department received. There was a
handful of other transactions throughout the amendments
that were adjustments related to Technical Vocational
Education Program (TVEP) funding. The number was adjusted
after the December release. He also noted a new federal
grant that the department received for $211,000. The grant
was designed to help the Libraries, Archives, and Museums
division address emergency events for preservation of state
historical artifacts.
1:54:22 PM
Representative Sullivan-Leonard asked if there was a
required state match for the federal grant related to the
state libraries, archives, and museums. Mr. Steininger
responded that there was not a dollar value match, but
existing staff in the division would help manage the grant.
Representative Sullivan-Leonard asked if the item was
urgent. Mr. Steininger responded that it was in the FY 21
operating budget. It was not an urgent matter.
Mr. Steininger continued to slide 8 which showed the
changes made to Department of Environmental Conservation's
(DEC) budget. The administration restored the dairy program
at $164,600 UGF and anticipated $15,000 in receipts to be
collected from the industry.
Vice-Chair Ortiz asked if the amount was already a part of
the operating budget the committee was currently
addressing. He thought the item had been dealt with at the
finance subcommittee level. Mr. Steininger explained that
when OMB was submitting budget amendments, they were
submitted based on the budget submitted in December [2019].
The amendment was an acknowledgement of support of the
action taken by the subcommittee.
Representative Merrick asked if there were three dairies
that would be contributing to the receipts Mr. Steininger
had mentioned. Mr. Steininger believed so but did not know
the exact number of dairies.
Representative Merrick asked if the dairies were consulted
about the receipt amount.
Mr. Steininger was aware that the department had had
conversations with the industry and discussed the level of
state support and the level of receipts needed.
Representative Merrick commented that in the past she had
supported companies paying for their own testing and
regulations. She thought it was a good faith effort by the
industry.
Mr. Steininger advanced to slide 9 which listed changes for
the Department of Health and Social Services (DHSS). The
first item removed $7 million of federal authority.
Unfortunately, a grant the department anticipated did not
go through and the federal authority was no longer needed.
He reported there was an addition of $700,000 UGF and
$700,000 of federal receipts for the Family First
Prevention Services Act for the Office of Children's
Services (OCS). The funding would target families at risk
of entering the OCS system to help prevent taking children
out of their homes. There had been a growing number of
children in subsidized adoption and guardianship
arrangements. The administration had added $1 million in
UGF and a small amount of additional federal authority. He
noted that the $1 million was not representative of the
actual amount of federal matching dollars. It was enough
federal authority to collect the amount OCS anticipated
leveraging with the $1 million.
Mr. Steiniger discussed changes within the Division of
Senior and Disabilities Services. The Alaska Mental Health
Trust Authority recommended adding an Adult Protective
Services III position at a cost of $75,000 from trust
receipts and $75,000 from federal revenue. He conveyed that
AMTHC recommended adding a Research Analyst III position in
the Division of Behavioral Health at a cost of $96,000 from
trust receipts.
1:58:47 PM
Mr. Steininger continued to discuss changes to the DHSS
budget on slide 10. The Alaska Mental Health Trust
Authority recommended professional off-site evaluations at
a cost of $300,000 in trust receipts. The Trust also
recommended a Partner Access LinePediatric Alaska Program
at a cost of $89,000 and a peer support certification with
the Behavioral Health Administration at a cost of $125,000.
He reported that within the commissioner's office the Trust
recommended the Statewide Designation Evaluation and
Stabilization/Designation Evaluation and Treatment
Coordinator position at a cost of $75,000 in trust receipts
and $50,000 in federal revenues.
Mr. Steininger continued to review slide 10. He reported
that within the Division of Behavioral Health OMB made a
transfer of $400,000 from the administrative component to
the Suicide Prevention Council to cover grant funding for a
Suicide Prevention Council Grant a grant that went to the
Department of Education and Early Development (DEED).
Representative Josephson asked for clarification regarding
the Suicide Prevention Council Grant and the grants related
to behavioral health. Mr. Steininger responded that they
were related to an administrative component within
behavioral health. The Office of Management and Budget
looked at historical trends of lapsed amounts within the
component and found that the full amount of UGF had not
been used each year. The department thought the lapsed
amount could be used to support a much-needed program
within the Suicide Prevention Council.
Representative Josephson suggested that the $400,000 was
not reaching beneficiaries in need. Mr. Steininger
responded that it was not that the dollars were not making
their way to beneficiaries. Rather, the money was not
assigned to specific grants but to the administration side
of behavioral health. The dollars were being reallocated to
pay for the suicide prevention grants.
Co-Chair Johnston summarized that the mental health add-ins
were additional AMHTA receipts. She asked if the Trust was
expecting a UGF match from the legislature for any of the
grants. Mr. Steininger responded in the negative.
Mr. Steininger addressed the changes to the budget for the
Department of Labor and Workforce Development (DOL) on
slide 11. There were two items adjusting the TVEP funding.
There was an addition of $457,900 UGF to the Workforce
Investment Board and $227,500 in TVEP funding for the
Alaska Vocational and Education Center (AVTEC). There was
also an increased salary and benefit adjustment within
AVTEC of $48,000 UGF and $10,600 in other funding.
2:02:45 PM
Mr. Steininger reported changes made to the Department of
Law's budget on slide 12. The amount noted on the slide was
the other half of the technical adjustment he had mentioned
within DCCED. The amount would correct a coordination issue
at the release of the December budget and noticed after the
release. The adjustment would ensure that the money to
support AOGCC went to the right place.
Mr. Steininger advanced to slide 13 which showed changes
made to the budget for Department of Military and Veterans
Affairs (DMVA). There was an amount of $280,500 UGF added
to support the management positions for the State of Alaska
Telecommunications System. He explained that when the
program was housed within the Department of Administration
(DOA), the positions were funded through the Office of
Information Technology budget. Now, because the program was
housed within DMVA, it required general funds. There was an
additional technical correction, a reduction of $35,500, to
correct a calculation error in the December budget. He
noted that the other side of the transfer of the position
could be found on the DOA slide.
Mr. Steininger reviewed slide 14 listing the changes made
to the Department of Natural Resources' (DNR) budget. There
was an addition of $204,000 for the servicing of an
agricultural revolving loan program support. There was also
a federal grant for a boating safety program in the amount
of $200,000. There was an addition of a position for the
Citizens' Advisory Commission on Federal Areas at a cost of
$178,000 within the Office of Project Management and
Permitting. He mentioned that there were several items on
the end of the current slide and the following slide that
addressed concerns the department had with travel regarding
activities that required employees to conduct site work.
The change was an adjustment to the travel reductions that
were implemented in the current fiscal year to ensure that
critical needs travel was funded.
Mr. Steininger indicated that slide 15, a continuation of
the changes made to DNR's budget, addressed some of the
other areas in which the critical needs travel was
occurring.
Mr. Steininger moved to slide 16 which indicated the
changes made to the budget for Department of Public Safety
(DPS). There were two other AMHTA items one in the
training academy and one in the Police Standards Council.
Both items were for a crisis intervention team training
course and reflected a total cost of $160,000 in trust
receipt authority.
Mr. Steininger advanced to the list of changes for the
Department of Revenue (DOR) on slide 17. There was an
increase across two different change records totaling
$346,600 UGF. The changes reversed efficiency savings. He
elaborated that as the department looked at its overall
budget for the Tax Division and the need to move the Tax
Revenue Management System into the operating budget out of
the capital budget, it realized that while it could
eliminate the positions identified, it needed the authority
to fully support the Tax Revenue Management System. There
was also a backlog within the Unclaimed Property Division
at a cost of $150,000 DGF (funds collected by the Unclaimed
Properties Section) to get through the claims backlog.
2:06:53 PM
Mr. Steininger discussed changes made to the Department of
Transportation and Public Facilities' (DOT) budget on
slide 18. He reported the need for $55,000 to address
equipment calibration and certification for measurement
standards. There was also a Vessel Construction Manager
position to work with the Interisland Ferry Authority on
their annual overhaul and construction projects at a cost
of $126,900. The department determined that the position
was needed to help the authority to coordinate with all of
the various requirements of the federal monies it received
for the overhaul and construction projects.
Mr. Steininger turned to the list of changes to the
Judiciary (JUD) budget on slide 19. There was a handful of
adjustments having to do with the conversion to a bi-weekly
payroll. He reported that as Judiciary looked at the
management of the conversion to a bi-weekly payroll, it
realized the conversion would have a budgetary impact for
its personal services costs. The changes also reflected a
restoration of full funding for the Appellate Court budget,
a reduction of $9,100 UGF related to Executive Branch
Services, and an adjustment in the number that would be
required.
Mr. Steininger reviewed changes made to the budget for the
Office of the Governor on slide 21. He reported an increase
of $60,000 related to ensuring that local governments had
access to the Alaska Administrative Code. There was also
$236,500 related to election worker pay. An update to their
pay level was needed requiring an additional amount of
money.
Mr. Steininger continued to slide 22 which listed changes
made to the University of Alaska's (US) budget. He reported
an adjustment of $605,900 related to TVEP funding. He
concluded his presentation of the FY 21 effective items.
HB 205 was HEARD and HELD in committee for further
consideration.
HB 206 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 205 HB 234 FY21 Gov Amend Presentation 2-20-20.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 205 HB 234 |
| HB 205 Operating Amendment Spreadsheet021920.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 205 |
| HB205 and HB206 Operating Budget Amendments Letter 2.19.2020.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 205 HB 206 |
| HB 234 Sup Amendment Summary 021920.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 234 |
| HB234 Supplemental Budget Amendments Letter 2.19.2020.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 234 |
| HB 234 Supplemental Amend Spreadsheet 021920.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 234 |
| HB 234 OMB Response to HFC Questions 2-20-20022620.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 234 |
| HB 234 response OMB Appropriation Limit Analysis022620.pdf |
HFIN 2/20/2020 1:30:00 PM |
HB 234 |