Legislature(2025 - 2026)ADAMS 519
03/06/2026 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB263 || HB265 | |
| Subcommittee Closeout Reports | |
| Department of Law | |
| Department of Health | |
| Department of Family and Community Services | |
| Department of Administration | |
| Department of Corrections | |
| Department of Transportation and Public Facilities | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 263 | TELECONFERENCED | |
| += | HB 265 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE BILL NO. 263
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making 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. 265
"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."
1:34:48 PM
^SUBCOMMITTEE CLOSEOUT REPORTS
1:35:02 PM
ALEXANDER SHROEDER, STAFF, REPRESENTATITVE ANDY JOSEPHSON,
relayed that the subcommittee closeout reports would be
presented by subcommittee aides. He noted that committee
members' packets included the agency budget reports, also
referred to as BA reports or BA sheets, the wordage
reports, and the subcommittee narratives (copies on file).
He explained that the first page of each agency BA report
contained agency totals, position counts, and comparisons
between budget versions. The table in the upper left
portion of the page divided agency totals by fund source.
The rows identified unrestricted general funds (UGF),
designated general funds (DGF), other funds, federal funds,
state receipts, and total funds. The columns compared
totals across budget versions.
Mr. Schroeder relayed that the table in the upper right
portion of the page compared fund sources and percentage
differences between the budget versions. The rows were
divided by fund source, and the columns compared totals
across budget versions. He explained that the comparison
between the FY 26 management plan and the finance
subcommittee recommendations reflected the combined changes
from the adjusted base, the governor's requests, and
subcommittee modifications. The comparison between House
Committee Substitute (HCS) 1 and the subcommittee
recommendations reflected changes from the governor's
requests and subcommittee modifications. The comparison
between the governor's proposal and the subcommittee
recommendations reflected only the changes resulting from
subcommittee modifications.
Mr. Schroeder noted that the table in the lower left
portion of the page displayed the total number of positions
within the agency. The rows identified permanent full-time
positions, permanent part-time positions, temporary
positions, and total positions. The columns again reflected
the different budget versions. The table in the lower right
portion of the page compared position counts and percentage
changes between the budget versions. The rows were divided
by position type, and the columns compared the various
budget versions.
Mr. Schroeder explained that the remaining pages of the BA
reports listed the individual budget action items. The
information for each item was organized into several
columns. The first column contained the item number, which
corresponded to the numbering used throughout the closeout
reports and narratives. The second column identified the
appropriation and allocation within the department. The
third column contained a description of the budget item.
The fourth column listed the governor's request, including
the amount associated with each fund source, any new or
deleted positions, and the transaction type. The fifth
column listed the subcommittee recommendations, which also
included the fund sources, position changes, and
transaction type. The final column contained notes from the
Legislative Finance Division (LFD).
Mr. Schroeder explained that when the information in the
governor's request column and the subcommittee column was
identical, it meant that the subcommittee recommended
adopting the governor's item without modification. If the
row appeared in blue text, it indicated that the
subcommittee had made a change to the governor's proposal.
The changes could occur in several ways. The subcommittee
could decline to adopt the governor's item, which would
appear as "not applicable" or "N/A" in the subcommittee
column. The subcommittee could also modify the governor's
item. Alternatively, the subcommittee could add a new item,
which would appear as "N/A" in the governor's request
column.
1:39:28 PM
Mr. Schroeder continued to describe the second document
included in members' packets, which was the wordage report.
The wordage report contained language approved by the
subcommittee. The language could include conditional
language, which had the force of law and applied to a
specific agency, appropriation, or allocation. The report
could also include intent language, which did not carry the
force of law but provided guidance to agencies on how to
meet legislative goals.
Mr. Schroeder explained that the third document in members'
packets was the subcommittee narrative. The narrative
consolidated the information contained in the BA report and
the wordage report and provided additional detail and
commentary on the subcommittee's actions. The narrative
also described amendments offered during subcommittee
meetings and explained the reasoning behind subcommittee
changes to the governor's proposed budget.
^DEPARTMENT OF LAW
1:40:27 PM
Mr. Schroeder reviewed the finance subcommittee
recommendations for the Department of Law (DOL)(copy on
file):
The House Finance Budget Subcommittee for the
Department of Law held a total of four meetings and
submits the following recommended operating budget for
FY27 to the House Finance Committee:
RECOMMENDATIONS:
Fund Source: (dollars are in thousands)
Unrestricted General Funds (UGF) $87,668.9
Designated General Funds (DGF) $3,142.2
Other Funds $43,842.5
Federal Funds $2,568.7
Total $137,222.3
Compared to the FY27 Adjusted Base/House Committee
Substitute 1, the subcommittee recommendations
represent an increase of $6.1 (0.0%) in Unrestricted
General Funds and a decrease of $462.1 (-1.0%) in
Other Funds. There is no difference in funds between
Gov Amend and the subcommittee recommendations.
Positions:
Permanent Full-Time 601
Permanent Part-Time 0
Temporary 0
Total 601
BUDGET ACTIONS
The House Finance Budget Subcommittee for the
Department of Law reviewed the FY27 Governor's budget
request and recommends accepting the request with no
changes.
Item 3 included an increase of $6.1 UGF for
implementation of the Information Technology (IT)
Classification Study. Administrative Order 284
initiated a study of the State's Information
Technology job classes. Comprehensive analysis in the
study resulted in the establishment and/or revision of
numerous IT job classes across the departments. On
January 6, 2026, the Division of Personnel established
the new IT job classes consistent with the findings in
the study and are requesting this UGF to implement the
new job class in the Department of Law.
SUBCOMMITTEE AMENDMENTS
The Chair set an amendment deadline and welcomed
amendments from all members. The subcommittee received
no amendments.
ATTACHED REPORTS
The House Finance Budget Subcommittee for the
Department of Law adopted the attached reports:
• LAW Agency Totals
• LAW Transaction Compare: House Committee
Substitute 1 to House Subcom
• LAW Transaction Compare: GovAmend to House Subcom
1:42:07 PM
Representative Stapp asked for more information about the
comparison between HCS 1 and the subcommittee version of
the budget. He drew attention to the administrative support
services line on page 3 of the BA report and observed that
the report listed $6,100 in UGF and $27,300 in interagency
receipts. He asked whether the total amount for the item
was $33,400. He remarked that the figures appeared to be
presented somewhat differently than usual.
Mr. Schroeder responded that the $33,400 figure represented
the combined total of the $6,100 and the $27,300 listed for
the item.
Representative Stapp asked what specifically would be
implemented through the IT classification study referenced
in the item. He commented that he had not previously seen
an implementation effort costing only $33,000.
Co-Chair Josephson suggested that Mr. Schroeder might not
have that level of detail available for the item and noted
that the amount was relatively small compared with many
other items in the operating budget. He suggested that LFD
could respond to the question.
Representative Stapp stated that he did not think the
question was worthy of a response from LFD. He noted that
the amount was small compared with typical budget items but
that he was simply curious about the details.
^DEPARTMENT OF HEALTH
1:44:22 PM
ERIN PAGE, STAFF, REPRESENTATIVE ANDY JOSEPHSON, stated
that the subcommittee narrative and the associated BA
report provided full detail regarding the subcommittee's
recommendations and considerations, including the exact
figures associated with each item. She explained that she
would not review each item individually because the
Department of Health (DOH) included nearly 50 budget action
items. Instead, she would highlight several key elements
and would refer to figures in millions of dollars.
Ms. Page reviewed the finance subcommittee recommendations
for DOH (copy on file):
The House Finance Budget Subcommittee for the
Department of Health (DOH) held a total of five
meetings and received eight presentations on
department and division budgets, including the
Governor's proposed and amended budget actions. Based
on that information and related discussions, the
Subcommittee accepted all Governor operating budget
actions and added 11 actions. The Subcommittee submits
the following recommended FY27 operating budget to the
House Finance Committee:
SUBCOMMITTEE RECOMMENDATIONS:
Fund Source (dollars are in thousands)
Unrestricted General Funds (UGF) $1,140,186.6
Designated General Funds (DGF) $50,846.7
Other Funds $110,910.4
Federal Funds $2,989,155.1
Total $4,291,098.8
Compared to the FY27 Adjusted Base (House Committee
Substitute 1, or HCS1), this recommendation increases
Unrestricted General Funds (UGF) by $56,463.3 in
Governor's actions and $21,461.0 in subcommittee
changes, for a total increase of $77,924.3 (7.3
percent). For Federal receipts, the Governor's
increase from the FY27 Adjusted Base/HCS1 is
$359,746.2 and the subcommittee's changes are
$23,202.0, for a total increase of $382,948.2 (14.7
percent). The total change across all fund sources is
$462,851.3 (12.1 percent). Additional detail is in the
attached Budget Action report.
Positions:
Permanent Full-Time 1567
Permanent Part-Time 1
Temporary 59
Total 1627
Compared to the FY27 Adjusted Base/HCS1, the
Subcommittee recommendations reflect no change in
permanent positions and a reduction of one temporary
position due to a Governor action.
[Due to length, see the copy on file for the Budget
Actions portion of the DOH subcommittee closeout.]
1:49:24 PM
Representative Stapp asked for more information about the
comparison between HCS 1 and the subcommittee version of
the budget. He observed that the comparison appeared to
show approximately $77.924 million in additional UGF and
approximately $382.9 million in additional federal receipt
authority. He asked whether the subcommittee was confident
that the additional federal receipt authority would be
approved through Centers for Medicare and Medicaid Services
(CMS) and that the authority was not merely placeholder or
hollow authority.
Ms. Page responded that the subcommittee's understanding
was that the federal receipt authority would be approved.
She explained that the proposed rate increases and Medicaid
funding levels were aligned with the recommendations
contained in the Guidehouse Research study. The study had
incorporated CMS requirements as guardrails when
determining the recommended rates.
Representative Hannan asked for more information about
anticipated savings associated with the private duty
nursing increment. She asked when and where the savings
would appear in the budget.
Ms. Page responded that the savings should begin to appear
almost immediately. She explained that although the
accounting effects might not fully appear until the
following fiscal year, the daily costs associated with the
current hospital-based care for eight patients receiving
complex care were approximately $84,000 per day statewide,
or more than $10,000 per patient each day. The patients
could transition out of hospitals and into home-based care
as soon as private duty nurses became available to provide
care in patients' homes. There would be minimal delay
before the transition could occur because the nurses
involved were already licensed and trained. The shift to
home-based care would quickly reduce Medicaid spending.
Representative Hannan asked for confirmation that the
savings would appear in the Medicaid allocation.
Ms. Page responded in the affirmative.
^Department of Family and Community Services
1:51:44 PM
Ms. Page reviewed the finance subcommittee recommendations
for the Department of Family and Community Services (DFCS)
(copy on file):
The House Finance Budget Subcommittee for the
Department of Family & Community Services (DFCS) held
two meetings and received five department and division
budget presentations, including discussion of the
Governor's proposed and amended operating budget
actions. Based on that information, the Subcommittee
made no changes to the Governor's proposed operating
budget actions and added six actions. The Subcommittee
submits the following recommended operating budget for
FY2027 to the House Finance Committee:
RECOMMENDATIONS:
Fund Source (dollars are in thousands)
Unrestricted General Funds (UGF) $286,338.5
Designated General Funds (DGF) $31,761.8
Other Funds $106,282.5
Federal Funds $86,545.9
Total $510,928.7
Compared to the FY27 Adjusted Base (or House Committee
Substitute 1, HCS1), the Subcommittee recommendation
increases Unrestricted General Funds by $730.8 in
Governor actions and $2,460.0 in Subcommittee actions.
The total increase in UGF is $3,190.8 (1.1%). For
Federal receipts, Governor actions reduce Adjusted
Base/HCS1 by $2,958.8 (-3.3%). The Subcommittee made
no changes in Federal receipts. The total change
across all fund sources is a decrease of $5,016.9 (-
1.0%). Additional detail can be found in the attached
Budget Action report.
Positions:
Permanent Full-Time 1867
Permanent Part-Time 5
Temporary 99
Total 1971
Compared to the FY27 Adjusted Base/HCS1, the
Subcommittee recommendations represent no change in
the number of positions in any category (Permanent
Full Time, Permanent Part Time, and temporary) within
the Department.
[Due to length, see the copy on file for the Budget
Actions portion of the DFCS subcommittee closeout.]
1:54:45 PM
Representative Stapp noted that he was tracking the changes
between HCS 1 and the subcommittee's recommendations. He
understood that there was about $3.2 million in general
funds and a reduction in federal authority and other funds,
which was explained in the narrative report. He asked for
confirmation that his understanding was correct.
Ms. Page responded in the affirmative.
^DEPARTMENT OF ADMINISTRATION
1:55:24 PM
CAROLINE HAMP, STAFF, REPRESENTATIVE CALVIN SCHRAGE,
reviewed the finance subcommittee recommendations for the
Department of Administration (DOA) (copy on file):
The House Finance budget subcommittee for the
Department of Administration recommends the following
Fiscal Year 2027 budget proposal:
Subcommittee Recommendations (Numbers Section Only):
Fund Source: (dollars are in thousands)
Unrestricted General Funds (UGF) $99,329.2
Designated General Funds (DGF) $36,689.5
Other Funds $211,793.4
Federal Funds $1,321.5
Total $349,133.6
Positions:
Permanent Full-Time 1,089
Permanent Part-Time 4
Temporary 26
Total 1,119
Compared to the FY27 House Committee Substitute #1,
the subcommittee recommendations represent an increase
of $148.2 (0.1%) in Unrestricted General Funds, $275.7
(0.8%) in Designated General Funds, $1,217.1 (0.6%) in
Other Funds, and no change in Federal Funds. Compared
to the Governor's proposed budget, the subcommittee
recommendations represent a decrease of $567.7 in
Inter-Agency Receipts.
Budget Action:
The House Finance budget subcommittee for the
Department of Administration (DOA) held three
informational meetings with the Department and one
close-out meeting during the review of the FY2027
budget requests. The subcommittee adopted:
• All Governor budget proposals, including
deconsolidating Shared Services of Alaska to all
agencies and returning Payroll positions and
functions to seven agencies.
• Deletion of vacant Deputy Commissioner and Chief
of Operations positions
The Chair set an amendment deadline and received three
amendments. None were adopted.
Subcommittee Discussion:
The subcommittee commented briefly on the importance
and timeliness of addressing DOA's non-compliance with
intent language regarding the Group Health Life Fund.
Last session, the Legislature passed intent language
"that the rate for the employer contribution to the
AlaskaCare employee health plan for the fiscal year
ending June 30, 2027, be set based on the full
actuarial rate without relying on lapsed funding."
However, DOA and the Office of Management and Budget
(OMB) implemented a "stair-stepped, conservative
approach" to reduce reliance on lapsing fund.
According to the Legislative Finance Division (LFD),
this reduced reliance still projects to use between
$18.5 and $26.3 million in FY27. Without further
changes, DOA projects a need of $27.0 to $50.5 million
by FY30. The subcommittee recommends the full House
Finance Committee review options to reduce reliance
further.
Members also spoke on the importance of Public
Broadcasting funding, particularly for emergency and
rural services, while encouraging political neutrality
in programming.
Lastly, despite the adoption of Shared Services
deconsolidation, the subcommittee shared concerns
about past consolidation actions. Instead of this
back-and-forth, the subcommittee encouraged the
Executive Branch to collect data and information
during this transition so that future administrations
can adequately decide whether centralization or
decentralization will provide efficiencies or savings.
Attached Reports:
The House Finance budget subcommittee for the
Department of Administration (DOA) adopted the
attached BA Report.
1:59:41 PM
Representative Stapp shared his understanding that there
was a change of about $148,200 in general funds between HCS
1 and the subcommittee's recommendations. He asked if his
understanding was correct.
Ms. Hamp responded in the affirmative.
^DEPARTMENT OF CORRECTIONS
2:00:34 PM
HUNTER MEACHUM, STAFF, REPRESENTATIVE SARA HANNAN, reviewed
the finance subcommittee recommendations for the Department
of Corrections (DOC) (copy on file):
The House Finance Budget Subcommittee for the
Department of Corrections submits the following
recommended operating budget for FY27 to the House
Finance Committee:
RECOMMENDATIONS
Fund Source: (dollars are in thousands)
Unrestricted General Funds (UGF) $475,589.9
Designated General Funds (DGF) $14,170.2
Other Funds $24,293.2
Federal Funds $9,382.9
Total $523,436.2
Positions:
Permanent Full-Time 2,127
Permanent Part-Time 0
Temporary 0
Total 2,127
BUDGET ACTION
The House Finance Budget Subcommittee for the
Department of Corrections reviewed the FY27 budget
request and adopted all items and added no additional
items.
Some budget items of note are: (dollars are in
thousands)
• $20,000.0 increase in UGF for personal services and
inmate transportation within the Population
Management Appropriation, Institution Director's
Office Allocation.
• $3,100.2 increase in UGF for medical staff costs
within the Health and Rehabilitation Services
Appropriation, Physical Health Care Allocation.
• $1,788.1 increase in UGF to meet Community
Residential Center contractual costs.
Recommended Intent Language
I am forwarding the following piece of intent language
for consideration:
• It is the intent of the legislature that the
Department of Corrections provides funding
consistent with the budgets submitted by local
police departments for the Regional and Community
Jails program. The current formula does not fully
cover the expense local governments incur
providing jail services to the state or account
for the cost savings they provide for the
Department of Public Safety. Therefore, the
Department shall negotiate the contract amounts
with each community, or their representative, for
all the Regional and Community Jails. The
negotiated contract amount shall be based on the
local government's annual standardized budget
request. The Department shall use the sum of the
contract amounts as the fiscal year 2028 budget
request for the Regional and Community Jails
program.
ATTACHED REPORT
The House Finance Budget Subcommittee for the
Department of Corrections adopted the attached report:
• House Finance Department of Corrections
Budget Action Report
Co-Chair Josephson asked whether the intent of the language
related to community jails was that DOC would enter into
contracts with local community jails and determine the
actual costs of services, and the state would then see a
funding increase for those costs in FY 28 so that the
financial burden would not remain with local governments.
Ms. Meacham responded that his understanding was correct.
2:02:38 PM
Representative Stapp asked whether the change from HCS 1 to
the subcommittee recommendations included an additional
$29.7 million in UGF.
Ms. Meacham replied that she believed the amount was
correct.
Representative Hannan added that the intent language
related to community jails was designed to identify the
total cost of community jail operations, which had not yet
been fully determined. She noted that the language did not
necessarily imply that the full amount would automatically
be incorporated into the next year's budget, but rather
that determining the total cost was necessary for the
legislature to adequately evaluate and address the issue.
Co-Chair Schrage remarked that he wanted to clarify the
budget process for members of the public. He explained that
the finance committee had previously adopted a committee
substitute for the operating budget and that the committee
was now reviewing the budget following the work completed
by the subcommittees. He understood that the difference
between the first committee substitute and the version
currently before the committee reflected both the work
completed by the subcommittees and any additions presented
by the administration. He asked if his understanding was
correct.
Ms. Meacham responded in the affirmative.
^DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
2:04:26 PM
TIMOTHY CLARK, STAFF, REPRESENTATIVE SARA HANNAN, reviewed
the finance subcommittee recommendations for the Department
of Transportation and Public Facilities (DOT) (copy on
file):
The House Finance Budget Subcommittee for the
Department of Transportation and Public Facilities
held a total of four meetings and submits the
following recommended department operating budget for
FY27 to the House Finance Committee.
RECOMMENDATIONS:
Unrestricted General Funds (UGF) $119,505.3
Designated General Funds (DGF) $59,151.5
Other Funds $493.740.1
Federal Funds $5,607.5
Total $678,004.4
This represents a zero percent change in funds between
the subcommittee recommendation and the governor's
amended budget proposal.
Positions:
Permanent Full-Time 2,347
Permanent Part-Time 222
Temporary 92
Total 2,661
BUDGET ACTIONS
The subcommittee adopted all of the governor's
proposed Budget Action items with no additions.
Some Budget Items of Note:
• The administration's requests included close to
$400,000 in UGF, DGF, Other funds, and Federal funds
to meet the costs of implementing the Information
Technology employee classification study. These
increases are necessary to bring compensation for
these positions into professional parity.
• The governor also requested more than $7.9 million
in UGF to restore reductions and reverse one-time
funding sources included in the FY26 budget. This
funding flows to highway and aviation maintenance and
operations across many regions of the state. Without
these restored resources, essential responsibilities
of the department would be materially compromised.
Note as well that these restorations are mitigated by
more than $3.5 million in deleted positions relating
to departmental reorganization.
• Another feature of this budget is the transition of
the Alaska Marine Highway System to multi-year
funding.
This was deemed prudent in large part because of the
budgeting flexibility it will allow the system amid
the worrisome uncertainty over vital federal grant
programs.
SUBCOMMITTEE AMENDMENTS
The chair welcomed amendments from all members. One
member moved to adopt the Budget Action Report as the
subcommittee's working document with all items
deleting positions as part of the department
reorganization removed. The motion failed in a seven-
to-one vote, and the Budget Action Report was
subsequently adopted as originally drafted.
ATTACHED REPORT
The House Finance Budget Subcommittee for the
Department of Transportation and Public Facilities
forwards the attached report:
• The House Finance Subcommittee for the Department of
Transportation and Public Facilities Budget Action
Report
2:08:19 PM
Representative Stapp asked if UGF increased or decreased
overall when comparing the adjusted base to the governor's
request. He explained that he was attempting to simplify
the comparison, particularly when accounting for the Alaska
Marine Highway System (AMHS).
Mr. Clark responded that he did not have the answer
immediately available. He would need to review several
items in the budget documents that were unrelated to the
ferry system transfer to determine the answer. He suggested
that LFD might be better positioned to answer the question.
Representative Stapp responded that the clarification was
not necessary and indicated that the explanation was
sufficient.
2:10:29 PM
Co-Chair Josephson remarked that the committee had reviewed
closeout reports for a portion of the operating budget,
covering approximately one-third of the departments.
Representative Stapp had an additional question for LFD.
Based on a quick calculation, he estimated that the changes
between HCS 1 and the subcommittee recommendations for DOT
appeared to total approximately $118 million in general
funds. He asked what that amount would represent in terms
of the per-person value of the Permanent Fund Dividend
(PFD).
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
responded that the Department of Revenue (DOR) currently
estimated that there were approximately 636,000 eligible
dividend recipients. Based on that estimate, every $100
million in fund changes would equal roughly $157 per
recipient. For $118 million, the number would be slightly
higher.
Co-Chair Josephson reviewed the agenda for the following
meeting.
HB 263 was HEARD and HELD in committee for further
consideration.
HB 265 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 263 HFIN Subcommittee Reports 030626.pdf |
HFIN 3/6/2026 1:30:00 PM |
HB 263 |