Legislature(2023 - 2024)ADAMS 519
03/22/2024 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB268 || HB270 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 268 | TELECONFERENCED | |
| += | HB 270 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 268
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making capital appropriations; making
supplemental appropriations; making reappropriations;
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. 270
"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."
8:37:59 AM
Co-Chair Edgmon MOVED to ADOPT the proposed committee
substitute for HB 268, Work Draft 33-GH2492\D (Marx,
3/21/24) (copy on file).
Co-Chair Johnson OBJECTED for discussion. She asked her
staff to explain the changes between the House Committee
Substitute 1 (HCS1) and House Committee Substitute 2
(HCS2).
REMOND HENDERSON, STAFF, REPRESENTATIVE DELENA JOHNSON,
introduced himself and would review the changes in HCS2.
Representative Ortiz asked for verification he had the
correct document number.
Mr. Henderson confirmed that Representative Ortiz was
correct.
Mr. Henderson reviewed the changes included in HCS2
including FY 25 operating items and FY 24 supplemental
items. The bill reflected a total budget of $10,429,085,200
for agency operations and $620,087,000 for statewide items.
Agency operations and statewide items were comprised of
$4,898,379,600 unrestricted general funds (UGF),
$892,610,400 in designated general funds (DGF),
$1,718,711,100 in other funds, and $3,539,471,100 in
federal receipts. Compared to the governor's amended budget
the UGF spend in HCS2 reflected an increase of $198,088,400
or 1.9 percent in agency operations. The increase was
primarily attributable to the $175 million in additional
education funding. There was a $3,012,500 decrease in
statewide items (1.8 percent) including $2,814,200 UGF.
8:41:41 AM
Mr. Henderson reviewed the changes between HCS1 and HCS2.
He noted he did not intend to reference page and line
numbers unless specifically requested to do so. He began
with Section 7, a new supplemental section that
incorporated the majority of the items requested in the
governor's December 14, 2023, January 30, 2024, February
14, 2024, and March 13, 2024, supplemental requests. He
reviewed exceptions not included in HCS2. The bill deleted
$525,000 in the Department of Administration (DOA) for an
increase in billable rates by the Office of Administrative
Hearings. The rate increase could be absorbed by the
agencies being charged for the service or by the Office of
the Governor's central service cost allocation containing
$5 million, which was available for items such as this. A
multiyear $411,000 appropriation for DOA to address
backlogs in public guardian cases had been moved from the
language section to the numbers section as a one-time item
to eliminate duplication. There was an additional request
in FY 25 to add $429,700 to the base. Under the Department
of Labor and Workforce Development, HCS2 extended FY 24
supplemental funds of $1 million for STEP [State Training
and Employment Program] to allow expenditure in FY 25.
Mr. Henderson reported that HCS2 included all of the
governor's budget amendments from March 13, 2024, with one
exception. Based on advice from Legislative Legal Services,
HCS2 did not include the request to transfer $5,415,300
from the Ocean Ranger Program account to the Commercial
Passenger Vessel Environmental Compliance account. He
explained it was not considered a legal appropriation
because the transfer would occur between subaccounts;
therefore, an appropriation was not needed.
8:44:17 AM
Representative Ortiz asked Mr. Henderson to repeat the
information about the Ocean Ranger Program account.
Mr. Henderson complied. He explained that on the advice of
Legislative Legal Services, HCS2 did not transfer money
from the Ocean Ranger Program account to the Commercial
Passenger Vessel Environmental Compliance account because
they were both subaccounts. He elaborated that the money
could be transferred between subaccounts and did not
require an appropriation.
8:44:57 AM
Mr. Henderson highlighted that HCS2 added $5 million UGF to
the Alyeska Reading Academy under the Department of
Education and Early Development (DEED) as proposed in the
governor's original request. He noted that the $5 million
for Head Start remained. There was a new section with a
one-time increase of $174,600,000, equivalent to a $680
increase to the Base Student Allocation (BSA) for grants to
school districts. The increment was accompanied by
contingency language as follows: "The appropriation is
contingent on the failure of a version of the bill
increasing the Base Student Allocation to be passed by the
rd
33 Alaska State Legislature in the second regular session
enacted into law." The bill restored a $1 million request
in the governor's original bill to provide a grant to the
Alaska Resource Education (ARE) for expanding statewide
workforce development initiatives for the years ending June
30, 2025, and June 30, 2026. The bill added $145,300 to the
Alaska Council on the Arts to match the FY 25 federal
funding. He elaborated there had been $719,900 in the
previous CS and a total level of $865,200 was needed to
fully match the allocation from the National Endowment of
the Arts.
8:46:53 AM
Representative Coulombe asked if the funding for ARE was in
the base or a one-time increment.
Mr. Henderson answered that the funds were in the base. He
deferred to the Legislative Finance Division (LFD) for
confirmation.
Representative Galvin referenced the funding for the
Alyeska Reading Academy and Head Start. She asked Mr.
Henderson to repeat the Head Start appropriation amount.
Mr. Henderson replied $5 million.
CONNOR BELL, ANALYST, LEGISLATIVE FINANCE DIVISION, relayed
that the Alyeska Reading Academy funding was added to the
base. The Alaska Resource Education grant was a two-year
appropriation of $1 million for expenditure in FY 25 and FY
26.
Co-Chair Edgmon asked if the Head Start increment was in
the base.
Mr. Bell replied affirmatively.
Representative Josephson asked if the $1 million increment
for ARE could be spent in any way the grantee chose over
two fiscal years. He asked for verification that the
grantee (in cooperation with the Department of Commerce,
Community and Economic Development) could elect to spend
all of the funding in FY 25 or divide it in any way between
the two years.
Mr. Bell responded affirmatively. He believed the intention
was to spend half the funding in FY 25 and half in FY 26,
but there was flexibility.
8:49:38 AM
Mr. Henderson continued to review the changes between HCS1
and HCS2. Under the Department of Fish and Game (DFG), HCS2
included the addition of three fisheries assessment
projects. The first project was $300,000 for the coho
salmon genetic testing of the of the upper Cook Inlet
commercial harvest. He detailed that the genetic testing
would allow the department to determine total run size,
interception rates, productivity of specific coho stocks,
and harvest patterns for different gear groups, thereby
providing for better scientific stock management. The
second project was $130,000 for the Chelatna Lake Weir for
the first year startup costs and $85,000 the following
years for ongoing operational costs. He expounded that the
camp was dismantled in 2020 and would need initial startup
costs. The ongoing $85,000 would provide funding for one
seasonal part-time fish and wildlife technician 3 and two
part-time seasonal fish and wildlife technician 2 positions
to operate the weir. The third project was $500,000 for a
mark/recapture study that was necessary to gain an updated
estimate of sockeye salmon abundance running through the
Susitna River drainage. The data would be used to better
inform managers on the total sockeye return in the Susitna
drainage and to lead to additional fishing opportunities
for Alaskans. There was $77,000 for a seasonal fisheries
biologist position to maintain the current efforts and to
accommodate the added workflow associated with the three
projects.
Mr. Henderson moved to the Department of Public Safety. He
relayed that public testimony revealed significant concern
about $3.7 million for the Council on Domestic Violence and
Sexual Assault (CDVSA). In response, the funds had been
added to the new CS. The bill included $1 million UGF for
the Department of Transportation and Public Facilities
(DOT) to fund the clearing of vegetation in the setback
along the Old Glenn Highway to allow for better visibility
along the highway. The Old Glenn Highway was the only
alternative route out of Anchorage to Interior Alaska in
the event of a closure of the Glenn Highway. Additionally,
the Old Glenn Highway was a high risk rural road, ranking
high on the statewide list of traffic collisions and
fatalities. Also under DOT, $1,388,700 had been moved from
the numbers section to the supplemental language section of
the bill to enable a multiyear appropriation for FY 24 and
FY 25.
8:52:28 AM
Mr. Henderson relayed that there had been a significant
amount of public testimony expressing concern over the
absence of $2.7 million for caregivers for senior citizens.
He relayed that the funds had not been added to HCS2. He
explained that there had been a misconception that a
reduction had been made to their budget, which was not
accurate. He detailed that the $2.7 million had come
federal COVID-19 funding. He elaborated that caregivers had
increased their rates when the federal funding was received
and there was concern the rates would be reduced without
the funding. He stated that according to LFD, the $2.7
million in federal funds had not been completely expended.
He relayed that LFD had asked the department to provide
information on how much of the funding had been spent, but
LFD had not yet received a response. He had also followed
up with the department and had not received an update. Once
the amount of remaining funds had been determined, it was
likely the amount requested would be added to the budget.
8:53:47 AM
Mr. Henderson referenced the deletion of a section called
"job class reclassification section" that had been in the
budget for decades. The section was intended to direct the
executive branch to not submit supplemental appropriations
when jobs were reclassified. The language was no longer
necessary and had not been followed in years. He stated
that they found a way to fund it within the appropriations
themselves. The CS extended a multiyear appropriation of
$340,000 in statutory designated program receipts (SDPR)
appropriated to the Department of Commerce, Community and
Economic Development (DCCED) for natural hazard planning
assistance through FY 27. The bill included a new section
appropriating $16,733 from the general fund to DCCED for
payment as a grant under AS 37.05.316 to the Alaska
Scholastic Clay Target nonprofit organization for the
maintenance of scholastic clay target programs and other
youth shooting programs including travel to compete in
national collegiate competitions for FY 25 and FY 26. The
amount reflected the expected receipts to be collected for
NRA license plate sales. The funds would lapse to the
general fund if they were unexpended.
8:55:36 AM
Mr. Henderson addressed the Permanent Fund Dividend. The
bill took the amount ($143 million) that was directed in
2023 to the CBR for the waterfall effect (50 to the CBR and
50 percent to energy relief) and directed the entire amount
to the energy relief checks at a total of $286 million. The
result was an additional $444 energy payment in addition to
the PFD amount. The bill also added another $180 for energy
relief by using the remaining FY 24 surplus of $116 million
after paying all FY 24 supplementals. The bill added a new
section appropriating $1.1 billion from the Earnings
Reserve Account (ERA) for a $1,648 PFD.
Representative Ortiz asked Mr. Henderson to repeat the last
statement.
Mr. Henderson complied.
Representative Ortiz asked if the action would exceed the 5
percent draw on the ERA.
Mr. Henderson replied, "No." He clarified that the funding
fell within the percent of market value (POMV) percentage.
He explained there were two ways to do it: the money could
be appropriated from the ERA to the general fund to the PFD
or the money could be appropriated straight to the PFD. The
total PFD would be $2,272 with the energy relief payments.
After the appropriations made in the CS there was a
remaining surplus of $162 million based on the spring
forecast. There were several things that had not been
funded that would reduce the surplus including fiscal notes
(e.g., fiscal notes totaling $23.5 million associated with
a senior citizens benefit legislation sunsetting in 2024),
ongoing employee bargaining negotiations that would result
in contracts in FY 25, capital projects, and a host of
other items. He explained that the surplus could be reduced
quickly depending on decisions made by the legislature. He
highlighted that HCS2 was a balanced budget and did not use
any funds from the CBR. He elaborated that public comments
had been taken into consideration and it contained a PFD
that appeared to be an appropriate amount.
8:59:48 AM
Representative Ortiz thanked Mr. Henderson for the
presentation. He asked how much money would be available
for the capital budget. He asked if there would be anything
above and beyond the governors' current capital budget.
Mr. Henderson answered that the governor's capital budget
was $297 million. He relayed that a portion of the $152
million surplus could be used at the discretion of the
legislature.
Representative Ortiz stated his understanding that the $152
million was potentially available for the capital budget.
He asked what other operating items were in competition for
the funds.
Mr. Henderson responded that the $152 million could be used
for capital projects, operating projects, and bills passed
with accompanying fiscal notes.
9:01:17 AM
Co-Chair Edgmon stated the term surplus was technically
correct; however, in his experience the vernacular was
"headroom." He explained it was the room needed to
accommodate the expenses in fiscal notes, the capital
budget, any unexpected priorities from the governor or
elsewhere, and for the next year.
Mr. Henderson agreed.
Co-Chair Edgmon remarked there was someone in the audience
from CDVSA. He asked if the $3.7 million added to the
budget for CDVSA was in the base.
Mr. Henderson responded affirmatively. [Note: Mr. Henderson
later corrected that the funding was a one-time increment.
See 9:04 a.m. for details.]
Representative Josephson remarked that the language at the
bottom of page 96 did not indicate that a BSA bill would be
in the range of the amount appropriated as a one-time
payment in the bill. He stated it suggested that any bill
increasing the BSA would result in foregoing the $174
million. He stated the language suggested that even a
smaller BSA increase of something like $300 would result in
foregoing the $174 million one-time funding. He asked if
the language was intended the way he was interpreting.
Mr. Henderson believed it was the intent.
Representative Josephson believed the language worked to
tamp down on efforts to increase the BSA.
Mr. Henderson answered that it was a possibility the
legislature may pass a larger BSA, and the language would
allow for that possibility as well.
Co-Chair Johnson relayed that the discussion [on the
possibility referenced by Representative Josephson] had not
taken place. She explained that the bill had been
constructed during the heated debate on education funding;
therefore, the [$680] amount included seemed to be the
proper amount. She stated there had been no subtext or
strategy behind the language included. She relayed the
intent was to ensure education was funded.
Mr. Henderson made a clarifying statement in response to an
earlier question by Co-Chair Edgmon. He clarified that the
CDVSA increment was one-time funding.
Representative Galvin asked about pupil transportation
funding. She recalled there had been funding in a previous
bill [SB 140 passed the legislature during session 2024 and
was vetoed by the governor]. She knew some districts were
very concerned about the funding. She asked whether there
was conversation about reading special needs. A previous
bill had included support for each student with special
reading needs. She knew there was funding in the bill for
the Alaska [Alyeska] Reading Academy and she wondered if
the funding had gone to the academy as opposed to schools
and the classroom for any specialists needs.
9:05:51 AM
Mr. Henderson answered that the bill did not contain
everything that had been in SB 140. He stated that "the
thing that we heard the loudest and clearest was the BSA
increase"; therefore, it was included in the CS.
Representative Galvin believed there was already some
funding for transportation, but she believed some districts
wanted an addition to existing funding.
Mr. Henderson answered there was funding in the base for
pupil transportation, but no additional funding had been
added.
Representative Stapp requested a quick summary of the
budget highlights. He looked at the $680 monetary
placeholder for the BSA, equivalent to a boost of about
$175 million to education. He remarked that the CS
reflected a balanced budget with over $150 million in
surplus, but when factoring in the capital budget and other
items, most of the funding would likely be accounted for.
He asked what the total PFD was estimated to be for
October.
9:07:59 AM
Co-Chair Johnson answered that under HCS2 the PFD was
$2,273 per person. She stated that Alaskans had not
received a full PFD since 2015. She explained that the
$2,273 figure was not a full 50/50 PFD but it was as close
as possible, while critical state services were maintained.
The budget started with a full statutory PFD, which would
result in over $1 billion in deficit spending. One of the
goals throughout the process had been to ensure there was a
balanced budget. The PFD included in the CS represented the
third largest PFD in the state's history. Additionally, the
bill left a surplus of $150 million. She stated that with
inflation and energy it was a way to strike a balance
between state services and an education increase. The CS
took public comment into account and tried to include
things people made note of in addition to a healthy PFD.
Representative Hannan referenced Mr. Henderson's statement
that HCS2 incorporated the supplementals. She asked about
large supplemental items including fire suppression and
disaster response. She asked if anything had been added to
the base for fire suppression under the Department of
Natural Resources.
Mr. Henderson answered that no additional funding had been
added [for fire suppression] beyond the governor's request.
He made a correction to his review of supplemental funding.
The governor's $40 million request for the Department of
Corrections had been temporarily withheld. The co-chair's
office intended to meet with the department and Senate in
order to discuss the increase in cost within the
department. In FY 20, the department spent less than $300
million, while the FY 25 request was over $400 million.
There was also a request for a $32 million increase in FY
25.
Co-Chair Johnson added it was her intent to ask the
Department of Corrections to come before the committee to
explain why its numbers were increasing. She noted that
after that time, additional changes could be made.
9:11:14 AM
Representative Hannan stated that the prior week there had
been a memo asking for authorization to move $5 million
from the Ocean Ranger Program to the passenger vessel fund.
She highlighted Mr. Henderson's statement that permission
was not needed to move the funds because the funds were
within the same appropriation. She asked if the entirety of
the Ocean Ranger Program funds within DEC could be used in
any way the department wanted without legislative
authorization or appropriation. Alternatively, she wondered
if it was limited to the $5 million.
Mr. Henderson deferred the question to LFD.
ROB CARPENTER, DEPUTY DIRECTOR, LEGISLATIVE FINANCE
DIVISION, answered that DEC would need to have expenditure
authority to expend additional ocean ranger money whether
it was in either account. He explained there were two
accounts within one statutory fund framework, which only
required legal appropriations from the fund. If the
department had the expenditure authority, it could move the
funds.
Representative Hannan stated that the $5 million in the
appropriation under discussion was money going to Alaska
Industrial Development and Export Authority (AIDEA) for a
dock in Whittier. She stated it was described in the memo
as backfilling out of the Ocean Ranger Program from an
accounting error. She was trying to determine whose
spending authorization it was. She asked if the spending
authorization was AIDEA's or DEC's. She asked why the
committee was given a memo implying the legislature needed
to authorize the expenditure if they [AIDEA and/or DEC]
could do anything they wanted.
Mr. Henderson requested to hear from Legislative Legal
Services.
9:13:33 AM
AT EASE
9:17:35 AM
RECONVENED
MARIE MARX, LEGISLATIVE COUNSEL, LEGISLATIVE LEGAL SERVICES
(via teleconference), introduced herself and was available
for questions.
Representative Hannan restated her above question.
Ms. Marx surmised that the question pertained to an
appropriation that had happened in the past. She explained
that the original restrictions would remain attached to
funds deposited no matter how it was coded. She clarified
that subaccounts were fund codes and were not the same
things as funds. She elaborated that subaccounts were
internal department accounts that did not exist in statute.
When the legislature appropriated money into a fund, it was
giving an entity authorization to spend money in accordance
with the purposes of the fund. She expounded that fund
codes were established administratively as a way for
departments and LFD to track money. She relayed that
transfers between subaccounts did not necessitate an
appropriation. There was no basis in law for such an
appropriation. She explained that under the specific
circumstance, the money would be moved from the Commercial
Passenger Vessel Environmental Compliance Fund into that
same fund, which had no legal effects. Under statute,
agencies could not transfer money between appropriations,
but they could transfer money within an appropriation
subject to the original restrictions established when the
money was first appropriated.
9:21:08 AM
Representative Ortiz referred to the original language that
created the ocean ranger fund with a $4 tax. He asked for
verification that things that transpired since the passage
of the law fell within that law created by a citizen's
initiative.
Ms. Marx responded that the use of the fees under AS
46.03.480 had other restrictions attached and was guided by
statute. She stated that whether the money had
constitutional or statutory restrictions was different than
whether the legislature should be appropriating money from
a fund into the same fund. The original restrictions when
the legislature appropriated money into the Commercial
Passenger Vessel Environmental Compliance Fund remained.
How the funds were used in the fund was a separate issue.
She clarified that the question at hand was about
appropriating money into the fund or between subaccounts
that did not exist in statute and were really an accounting
mechanism. She explained that if the department had been
transferring money between its subaccounts (fund codes), an
appropriation was not needed to do so. She reiterated that
it was a completely separate issue from how the money was
spent.
9:23:32 AM
Representative Ortiz stated the issue was still unclear. He
understood how there was separate accounting that took
place within the fund itself. He referred to the end of the
Ocean Ranger Program that occurred when the current
administration took office. He asked if the use of the
funds since that time fell within the original statutory
language that created the fund.
Ms. Marx deferred the question to LFD to answer how the
money was spent. She did not have that detail. She stated
the issue she was speaking to was how money should be
appropriated into and out of the fund. She recommended
asking LFD what restrictions existed when the legislature
appropriated money into the fund.
Co-Chair Johnson directed the question to Mr. Carpenter
with LFD.
9:26:09 AM
Mr. Carpenter would follow up on Representative Ortiz's
question about whether the funds were being used for the
statutory purpose. He explained that LFD tracked the intent
behind revenues and how the legislature intended to
appropriate them; however, moving the money within the fund
was up to the agency using the funds.
Representative Josephson referenced the Janus appropriation
structure from FY 20 and FY 21 or FY 21 and FY 22. He
relayed that it was currently the subject of litigation. He
explained that to hem in expenditures the legislature had
created a separate appropriation within the Department of
Law's Civil Division in order to control how funds were
spent. He asked if the legislature would need to do
something of that nature to ensure funds were spent on
environmental protection and not on docks in Whittier.
Mr. Carpenter responded, "For the most part yes." He
explained there was a statutory framework where revenue was
collected into the fund for a designated purpose and the
legislature appropriated from that fund. He stated if the
legislature wanted to restrict the revenue source, it would
likely require modification in statute.
Co-Chair Johnson thought it sounded like something that
needed to be investigated further.
Representative Josephson referenced a recent presentation
from LFD Director Alexei Painter titled "Fiscal Update"
[dated March 20, 2024] (copy on file). He looked at slide 6
of the presentation showing major outstanding items. He
excluded education, which he noted was partially funded in
the budget if the governor did not veto it. The slide
showed $23 million for senior benefits, $38 million for a
shortfall in the Alaska Marine Highway System (AMHS)
budget, and union contracts. He estimated the slide showed
costs in excess of $70 million. Slide 7 highlighted an
additional $41 million for renewable energy fund, school
construction, major maintenance, and deferred maintenance,
bringing the total from slides 6 and 7 to over $100
million. Slide 8 included fiscal notes and community
assistance. He did not know the status of community
assistance in the budget. The slide showed other potential
items including the replacement of one-time items including
funding for the Council on Domestic Violence and Sexual
Assault (CDVSA). Funding for CDVSA was in the budget.
Additionally, there was the fire and disaster fund and the
hiring of new employees. The committee was told that the
cost of hiring new full-time employees could be $11
million. He stated the above items were in the range of
$200 million. He considered the scenario where the budget
was passed by the House and the public believed it was
getting a $2,272 PFD. He asked if it was realistic.
9:30:35 AM
Mr. Henderson responded that the $152 million [in remaining
funds] could disappear rapidly. He clarified that the items
listed in the LFD presentation could potentially happen and
were not set in stone. He explained that the presentation
mentioned $35 million to $38 million for AMHS. He stated
that based on how AMHS would be operating, LFD did not
believe it would occur; it was a possibility depending on
the AMHS schedule. He explained that all of the items were
potential additions to the budget. He agreed that if the
items occurred, they would reduce the amount of the PFD.
Representative Coulombe commended Mr. Henderson on his work
on the budget. She noted that much had changed as a result
of public testimony. There had been a lot of consensus
around things that were added to the CS. She knew the PFD
was always controversial, but Alaskan families were hit
hard with inflation. She appreciated the effort to make the
PFD as large as possible to help families. She remarked
that although there were still numerous budget items
"hanging out there," there was a comfortable surplus to
cover expenditures. She pointed out that the House was put
on the spot to put the first operating budget out and many
things changed and shifted throughout the process. She
thanked Co-Chair Johnson.
Co-Chair Johnson appreciated the comments. She remarked
that it was quite a lift to analyze every fund source and
consider everything that may need to be changed. She was
grateful for all of the work put in by committee members'
finance staff throughout the process. She stated that the
House operating budget was the first budget out and she was
pleased with its composition. She noted that if the current
version did not get changed it would be the first time in
state history.
Representative Ortiz appreciated the work done by Mr.
Henderson and the other finance staff. He looked at the
breakdown of the PFD. He asked for more detail about the
percent of market value (POMV) split pertaining to the
$2,227 [$2,272] PFD in the CS.
9:35:09 AM
AT EASE
9:35:46 AM
RECONVENED
Mr. Henderson referred to page 72, lines 12 through 17 of
HCS2 where $3,657,263,378 was appropriated from the ERA as
follows: $1.1 billion to the dividend fund and $2.5 billion
to the general fund.
Representative Ortiz asked about the idea of 50 percent of
the money going to the CBR and 50 percent to a fuel
subsidy. He understood the CS directed 100 percent of the
funding to the fuel subsidy. He asked for the current
balance of the Constitutional Budget Reserve (CBR) and how
much the balance would not increase as a result [of
directing the funds to the fuel subsidy].
Mr. Henderson believed the current CBR balance was about
$2.7 billion. He stated that whether or not there was any
growth would depend on how much was spent when the budget
reached its final composition. There could be some
reductions made, vetoes that could occur, which could add
to the CBR.
Co-Chair Johnson noted that the CBR was not invested at the
same level as some of the other funds and did not see the
same large investment return.
Representative Ortiz understood. He asked about the
opportunity cost of not putting the 50 percent into the
CBR. He asked for the amount that would not be deposited
into the CBR [that would have been if it were not directed
to the energy relief payments].
Mr. Henderson answered $143 million.
Representative Stapp remarked that due to high vacancy
rates in the state's departments, payroll services funds
lapsed and continued to add to the balance of the CBR. He
noted it was similar to what had taken place the previous
year. He highlighted that a couple of years ago the federal
government ruled that energy relief money was tax exempt
from federal income taxes. He stated that net value to
Alaskans during a high inflation period was impressive.
9:39:12 AM
Representative Ortiz believed the budget originally
included $14 million for fire suppression. He remarked that
the committee had seen that the average was much higher. He
asked if the budget increased funding for fire suppression.
Mr. Henderson asked if Representative Ortiz was referring
to the FY 25 request or the FY 24 supplemental.
Representative Ortiz answered FY 25.
Mr. Henderson responded that it was clear the legislature
was not budgeting enough for fire suppression.
Consequently, there continued to be supplemental funds
appropriated for fire suppression. He relayed that LFD had
suggested that perhaps more money should be allocated
towards fire suppression to reflect truth-in-budgeting. He
could not specify what the amount would be or should be. He
remarked that perhaps the budget should include the average
annual cost for fire suppression.
Representative Ortiz asked for verification that the CS did
not include any additional funding for fire suppression.
Mr. Henderson agreed.
Co-Chair Johnson shared that there had robust discussions
on the topics in her office. She relayed that fire
suppression was funded at the level of the administration's
request. She would rather see the department come back with
true numbers for fire suppression costs rather than
appropriating more money that may not be needed. She
preferred to wait for the supplemental request. She
remarked that the number was changeable.
9:42:06 AM
Representative Galvin appreciated the work that went into
the CS. She thanked the chair for the conversation as she
had not been privy to the conversation in Co-Chair
Johnson's office. She agreed there had clearly been
substantial attentiveness to public testimony. She stated
there had been substantial testimony from care providers
for day healthcare provider wages. She asked if it had been
factored in. She asked about the pieces of education
funding. The public testimony had not come in for education
because the public had been told education funding was in a
separate bill. She explained that at the time, SB 140 had
been the vehicle for K-12 public education. She noted that
it was no longer the vehicle. She believed the committee
did not get a chance to hear as much as it potentially
would have on education components like transportation,
reading help, early learning, and the Alaska Reads Act had
SB 140 not been in play.
Mr. Henderson believed the first question related to $2.7
million for caregivers. He explained that they were still
trying to determine how much of the money received was
still available before appropriating any additional funds.
Pertaining to the second question [related to education
funding], the only thing addressed was the $175 million for
the $680 BSA increase.
9:45:56 AM
Representative Josephson asked if Mr. Henderson was certain
the $2.7 million for senior and disability services was
connected to the testimony on personal care attendants.
Mr. Henderson believed so. He stated his understanding that
the funding was for increased rates for caregiver providers
to take care of individuals. There was concern that the
rates would have to be dropped when the $2.7 million
disappeared.
Representative Josephson thought it was $7.5 million for
the services described by Representative Galvin in the
current fiscal year. He thought they were different funds.
VALERIE ROSE, ANALYST, LEGISLATIVE FINANCE DIVISION,
responded that they were talking about a variety of rates
and legislative actions over the past few years. The
testimony from the previous week was related to the senior
and disability services (SDS) American Rescue Plan Act
(ARPA) funds, which were set to expire at the end of FY 24.
The governor requested an extension of the funds into FY 25
in his supplemental budget request, which was reflected in
the CS. She believed the carryforward for the services was
$2.8 million in FY 24 and $3.9 million in FY 23, meaning
approximately $1.1 million in ARPA fund grants had been
expended in FY 23. She believed the funds had to be
liquidated by the end of January 2025. She did not know how
much the department was projecting to carry forward into FY
25, but if they were keeping pace with prior years, there
should be sufficient funding to carry forward into FY 25 if
the supplemental funds were approved by the legislature.
Ms. Rose addressed the one-time UGF increment of $7.5
million appropriated in FY 24 to boost childcare wages. She
stated her understanding there was not a similar increment
in the FY 25 budget.
9:49:36 AM
Representative Josephson clarified that he was referring to
money used for DPS and PCA [personal care assistance] to
keep seniors and disabled individuals in their homes rather
than in institutions. He thought there was an amount
similar to the childcare number [of $7.5 million] included
in the budget. He highlighted that the committee had heard
testimony from over 20 caregivers earning $18 to $21 per
hour who had continually said they could not afford to do
the work. He wondered if it had been added to the budget.
Ms. Rose answered that the legislature had included one-
time funding in FY 23 and FY 24. She believed there was
intent language to the one-time funding in FY 23 specifying
that the legislature was adding one-time funds on top of a
set rate for services with the intent for providers to use
the funds to support worker wages. She explained that when
it came to privately held businesses, the legislature could
only do so much to direct how it wanted funding to be spent
and there was limited legal authority to ensure compliance.
She did not have the figures on hand and would follow up
with the information. In FY 24, there was another one-time
item with no attached intent language. Currently, there was
not any one-time funding in the budget for FY 25.
9:51:46 AM
Representative Cronk shared that his office had been
examining true fire costs. He stated it looked like the
supplemental provided a more accurate cost. He believed in
FY 23 there was $19 million that was more than needed. He
thought providing the funds through the supplemental was
the right way to address the issue. He suggested investing
money into a forestry program that helped to suppress
fires. He remarked that the investment may look like a
substantial amount of money, but the state would hopefully
save hundreds of millions from actively fighting fires.
Additionally, it would produce business and product. He
thought they were doing it backwards. He explained that the
state had been spending a lot of money and getting nothing
out of it. He recommended spending a lot of money and
getting something out of it instead.
Mr. Henderson was finished with his explanation of the
changes.
Co-Chair Johnson WITHDREW the OBJECTION.
There being NO further OBJECTION, Work Draft 33-GH2492\D
for HB 268 was ADOPTED.
9:53:50 AM
Co-Chair Foster MOVED to ADOPT the proposed committee
substitute for HB 270, Work Draft 33-GH2490\U (Marx,
3/20/24) (copy on file).
Co-Chair Johnson OBJECTED for discussion.
Co-Chair Johnson asked her staff to explain the changes in
the committee substitute (CS).
REMOND HENDERSON, STAFF, REPRESENTATIVE DELENA JOHNSON,
explained the changes in the CS. He stated that the
governor had submitted one amendment on March 13, 2024,
which had been accepted. The CS added $500,000 in general
fund/mental health funds for Crisis Now and $250,000 in
general fund/mental health funds for crisis services
grants. The CS reflected all of the items approved and
requested by the Alaska Mental Health Trust Authority
(AMHTA) in its operating budget request.
Representative Josephson believed the governor's original
budget required AMHTA to spend money it held that AMHTA did
not necessarily want to spend. He believed the CS dispensed
with that.
Mr. Henderson agreed.
Representative Josephson asked if he was correct that the
budget did not include all of the budget recommendations
made by AMHTA.
Mr. Henderson clarified that all of the AMHTA operating
budget recommendations were included in the CS. Capital
items were not reflected in the operating budget.
Representative Josephson highlighted that AMHTA recommended
the use of state general funds. He thought it meant the
items would be in the regular operating budget [HB 268],
not the mental health budget [HB 270].
Mr. Henderson was unclear on the question. He explained
that the AMHTA had presented a document [to the committee
on January 31, 2024 (copy on file)] showing AMHTA budget
recommendations, items the governor left out of his budget,
and items in the governor's budget funded with Mental
Health Trust Authority Authorized Receipts (MHTAAR). He
stated that the governor had taken them out in his
amendments. The CS reflected exactly what the AMHTA board
adopted.
9:57:27 AM
Co-Chair Johnson WITHDREW the OBJECTION.
There being NO further OBJECTION, Work Draft 33-GH2490\U
for HB 270 was ADOPTED.
Co-Chair Johnson set an amendment deadline of 12 p.m. on
Tuesday, March 26.
Mr. Henderson thanked committee members and their staff in
addition to Legislative Legal Services.
HB 268 was HEARD and HELD in committee for further
consideration.
HB 270 was HEARD and HELD in committee for further
consideration.
Co-Chair Johnson reviewed the schedule for the following
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 268 CS FIN WorkDraft FIN v.D 032224.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 |
| A. Agency Summary HCS2.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 HB 270 |
| B. Agency Summary HCS2 - UGF Only.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 HB 270 |
| 1. Statewide Totals HCS2.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 HB 270 |
| 2. Statewide Totals HCS2Sup.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 270 |
| 3. Transaction Compare GovAmd+ to HCS2.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 HB 270 |
| 4. Transaction Compare HCS1 to HCS2.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 HB 270 |
| 5. Transaction Compare GovSup+ to HCS2Sup.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 HB 270 |
| 6. Transaction Compare HCS1Sup to HCS2Sup.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 268 HB 270 |
| HB 270 CS FIN WorkDraft v.U 032124.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 270 |
| HB 115 PTOT Board Letter 05-06-2024.pdf |
HFIN 3/22/2024 8:30:00 AM |
HB 115 |