Legislature(2001 - 2002)
03/16/2002 09:42 AM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 403
An Act making appropriations for the operating and loan
program expenses of state government, for certain
programs, and to capitalize 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. 404
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.
DEPARTMENT OF MILITARY & VETERANS AFFAIRS
Agency-wide Unallocated Reduction
DMVA#1
Add Intent Language
"It is the intent of the Legislature that the Department of
Military and Veterans Affairs eliminate the Technologies and
Special Projects position, and not eliminate the State
National Missile Defense Coordinator position."
Co-Chair Mulder explained that the choice of elimination of
the National Missile Defense Coordinator position would
limit Alaska's ability to respond to the development of the
National Missile Defense activities in Alaska, thus,
associated economic development. He thought that the duties
of the Technologies and Special Projects should be absorbed
within the Department.
Co-Chair Mulder MOVED to ADOPT DMVA#1.
Representative Croft OBJECTED. He stressed that the effect
would affect how the work was done. He advised that the
effect of the language could not be fully understood.
A roll call vote was taken on the motion.
IN FAVOR: Bunde, Foster, Harris, Hudson, Lancaster,
Whitaker, Mulder, Williams
OPPOSED: Croft, Davies, Moses
The MOTION PASSED (8-3).
DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
DOT/PF #3
ADD:
AGY: Department of Transportation & Public Facilities
BRU: Highways & Aviation
Component: Northern Region
Fund Source Amount
General Fund $1,044,200
Representative Davies MOVED to ADOPT DOT/PF #3. Co-Chair
Mulder OBJECTED.
Representative J. Davies explained that the amendment would
be used to restore funding and avoid closing four Northern
Region highway maintenance stations:
· Birch Lake - $135,000
· Coldfoot - $150,000
· Chitina - $371,700
· Trims - $387,500
He pointed out that services would be greatly reduced in the
Birch Lake area, with 53 miles of Richardson Highway
responsibility being spun off to the Fairbanks and Delta
Stations. Some roads in that area would be closed, and all
would see delays with implications for safety. In addition
to service failures, the facilities would suffer maintenance
problems.
Representative J. Davies added that closing the Trim Station
on the Richardson Highway another 35 miles of roadway would
see curtailed maintenance, acutely in the winter, with
repair work limited to the emergency calls only. Shutting
down the generator would curtail power service to other
buildings nearby.
Representative J. Davies pointed out that closing of the
Cold foot Station would chiefly affect commercial traffic on
the Dalton Highway and local aviation facility service, with
an increase in safety concerns for stranded vehicles. The
building will react negatively to harsh weather conditions,
with increased maintenance requirements if it is closed.
He added that closing the Chitina Station would impact
winter service for local, residential and school
transportation traffic on the Edgerton Highway, in addition
to summer dust control during the tourist season.
Representative J. Davies recommended accessing the motor
fuel tax to maintain the road system throughout the State.
He stressed the importance of maintaining the fundamental
infrastructure.
Representative J. Davies emphasized that there is going to
be a series of problems within the budget that relate to
highway maintenance. He warned that the State is heading
toward an emergency supplemental down the road. If the
responsibilities are to be transferred to local entities,
those locations will need time to plan for that obligation.
He urged that the Committee reconsider the proposed
reduction.
Co-Chair Mulder spoke against the amendment. He commented
that it is not a new proposal. Each year, the State
attempts to solve the problem for those local communities.
He noted that the Department should be able to address that
concern, pointing out the unallocated reduction within the
Department's budget. He commented that he did not agree
with the characterization proposed by Representative Davies,
suggesting that this is the first stop along the process of
considerations within that Department. He indicated that it
was his intent to work with the Department of Transportation
& Public Facilities.
Representative Croft countered statements made by
Representative J. Davies, pointing out the significant
impact to the Department of Transportation & Public
Facilities that the reductions would bring. A cut of that
magnitude reaches throughout the State in each district.
Co-Chair Mulder interjected that he did not intend to claim
that the Department was unfairly targeting certain areas.
He admitted that there will be statewide impacts. When
making a general fund reduction, the Department of
Transportation & Public Facilities is one Department that
would be dramatically impacted. He reminded members that
there is a revenue problem in the State of Alaska and that
fiscal restraint needs to be displayed to the public. The
State is living its' fiscal means.
Representative Davies voiced concern with impacts to the
Northern Region, referencing the vast area the Northern
region encompasses. He added that there are other reasons
why closing maintenance stations should not be possible. He
stressed that the proposed reduction was not feasible. He
asked to hear from the Department regarding how the
reduction will impact the State.
KURT PARKIN, DEPUTY COMMISSIONER, DEPARTMENT OF
TRANSPORTATION & PUBLIC FACILITIES, advised that the
proposed cuts were four times greater than the one
implemented in FY00 when four maintenance stations were
closed. He noted that the cut would be spread throughout
the entire State. The Northern region will experience a
large portion of the hit, as it is the largest region.
Representative Davies urged that the amendment be adopted.
He reminded members that it does not make sense not to
maintain the infrastructure. People are paying motor fuel
taxes and expect that the roads will be maintained. That is
one of the fundamental jobs of government. If revenue is
taken into consideration, these responsibilities must be
addressed. Representative J. Davies advised that the budget
reductions were being driven from a wrong point of view.
Representative J. Davies urged that all the amendments be
considered together as they each address "real" concerns.
Representative Harris admitted that the reductions do affect
the roads that he uses almost daily. He recommended that
there be a discussion on how to use the implemented
reductions. He noted that the subcommittees had asked the
departments how to use the reductions and that now the
departments are evaluating what the most important cuts
would be. He added that the choices have been made.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Moses, Croft
OPPOSED: Foster, Harris, Hudson, Lancaster, Whitaker,
Bunde, Williams, Mulder
The MOTION FAILED (3-8).
DOT/PF #10
ADD:
AGY: Department of Transportation and Public Facilities
BRU: Marine Highway System
Component: Marine Vessel Operations
Fund Source Amount
1076 Marine Hwy Fund $4,234,400
AMEND: Section 15 to read:
The sum of $45,769,800 [$40,968,400] is appropriated
Alaska marine highway system fund (AS 19.65.060).
Representative Croft MOVED to ADOPT DOT/PF #10. Co-Chair
Mulder OBJECTED.
Representative Croft explained that this two-part amendment
would:
· Restore operating weeks of the Alaska Marine Highway
System to the FY99/00 planned service levels;
· Add new service by the Metlakatla shuttle in the Spring
2003;
· Support fuel price increases from FY99/00; and
· Fund the general fund portion of the FY03 labor
contracts.
Representative Croft pointed out that the Municipality of
Anchorage does support full funding of the Alaska Marine
Highway Transportation System. He emphasized that the Taku
would be off for 33 weeks. Through the proposed cut, the
Bartlett would be taken off line. He informed members that
the State of Alaska built that ferry system when there was
not much money in the State coffers knowing that it was
essential for a portion of the State. He warned that this
Legislature was "dis-mantling" that system.
Co-Chair Mulder admitted that the arguments provided by
Representative Croft were persuasive. He interjected that
there is $80 million cost dollars of which only half comes
from program receipts. He emphasized that the State is
attempting to provide a level of service given the funds
that are available.
He acknowledged that many of the seats are currently booked.
The projected hope is to provide the same level of service
as provided last year. He added that all highway areas are
taking reductions this year.
Representative Hudson emphasized that the proposed reduction
is the most problematic one in the budget. The net effect
reduces 48 full-time positions in Ketchikan. He compared
the ferry system to the road system throughout Northern
Alaska.
TAPE HFC 02 - 51, Side B
Representative Hudson stated that the Department would be
hit two times. He urged that a solution be addressed and
that there be alternative means for the State to get more
revenue.
A roll call vote was taken on the motion.
IN FAVOR: Moses, Croft, Davies, Hudson, Williams
OPPOSED: Whitaker, Bunde, Foster, Harris, Lancaster,
Mulder
The MOTION FAILED (5-6).
DEPARTMENT OF PUBLIC SAFETY
DPS#5
ADD:
AGENCY: Department of Public Safety
BRU: VPSO Program
Component:Program Support
Fund Source Amount
General Fund $1,129,000
Representative Davies MOVED to ADOPT DPS#5. Co-Chair Mulder
OBJECTED.
Representative J. Davies stated that the amendment would
restore the general fund reduction to the Village Public
Safety Officer (VPSO) support component. He pointed out
that the House Finance Subcommittee proposal would result in
the elimination of six of the nine State Trooper positions
funded in that component.
Representative J. Davies advised that the troopers were the
first responders to felony crimes throughout Rural Alaska.
The VPSO's do not have authority to make arrests and
investigate felonies.
Representative J. Davies reiterated that State troopers
eliminated by the subcommittee proposal were directly
involved in daily oversight of the VPSO's and response to
more serious crimes in the villages. Oversight troopers
travel to villages and provide on-going training for VPSO's.
Those activities help establish relationships between the
VPSO's and the troopers that are important to the local
community.
Representative J. Davies emphasized that the reduction would
also eliminate four Regional Public Safety Officers (RPSO),
which were funded in the last legislative session. The RPSO
program was established to provide a local certified police
officer to the rural areas of the State. RPSO's are
intended to augment trooper patrol activities. RPSO's would
be trained and certified by the Alaska Police Standards
Council as police officers.
Vice-Chair Bunde agreed that public safety should be a core
function. When that Department received their allocations,
the Subcommittee determined which core services could be
added back and concluded that they were the VPSO's in
supervisory roles. That cut was an attempt to do the least
harm.
Representative Croft stated that the VPSO program is
efficient because partially trained officers are placed in
the village areas. The cost savings is in having the
trooper forward. Trooper's work is very important.
Representative Davies added that these are some of the
positions that respond to felony crime circumstances and
provide the basic training for the VPSO's. The program will
not function without this type training. It is the key
component of the program.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Moses, Croft, Davies
OPPOSED: Harris, Hudson, Lancaster, Whitaker, Bunde,
Mulder, Williams
The MOTION FAILED (4-7).
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
HSS#4
ADD:
AGENCY: Department of Health & Social Services
BRU: Family and Youth Services
Component: Front Line Social Workers
Fund Source Amount
General Fund $977,500
Representative Davies MOVED to ADOPT HSS#4. Representative
Harris OBJECTED.
Representative J. Davies discussed the concern that social
workers are the front line workers for the Department of
Health & Social Services, Division of Family and Youth
Services. They provide services to abused and neglected
children and their families trying to find the best solution
for a child that has been removed from the home due to
neglect or abuse. Alaska has one of the highest rates of
child abuse and neglect in the nation. The proposed cuts
would result in the following actions:
• Lay off of 18 social workers statewide (Fairbanks,
Palmer, Delta, Kodiak, Ft. Yukon, Haines, Wrangell,
Petersburg, Sitka). Coupled with layoffs in other
areas (Balloon project 14), approximately 32 social
workers could lose their jobs. That would increase
the remaining social workers caseload by five cases.
Social workers in this Division already have one of
the highest caseloads in the nation, more than double
the national standard of 15 cases. A cut like this
will result in social workers leaving their jobs, as
it is an area where turn over rate is already high.
• Elimination of the Dual Track projects in Mat-Su.
Under the Dual Track program, the Division of Family
and Youth Services (DFYS) grantee provides services to
clients determined to be at low-risk. With that
project, DFYS is able to respond to 100% of the
legitimate reports of harm in that area.
• Increased caseload will affect social workers ability
to investigate reports of harm. They will be unable
to investigate all reports of harm leaving some
children in danger. Ability to investigate may be
reduced by as much as 15 to 22% when all cuts are
factored in.
• Increased caseloads will affect social workers ability
to perform crisis intervention, case planning, and
other services that support children and families.
Children will stay in foster care longer, costing the
State more money.
Representative Harris responded that this was a difficult
section of the Department of Health and Social Services
budget to reduce. He admitted that there is a case
overload. He warned that there is a fundamental problem
within the State. What is causing this harm to these
children and what is the State's responsibility versus local
responsibility.
Representative Harris addressed the supplemental funding
request from last year for Department of Health and Social
Services. He commented that there are "other" problems
throughout the State that contribute to the reports of harm
and what government's responsibility is. He thought that no
matter how much funding was provided, the problem will
continue.
A roll call vote was taken on the motion.
IN FAVOR: Moses, Croft, Davies
OPPOSED: Whitaker, Bunde, Foster, Harris, Hudson,
Lancaster, Mulder, Williams
The MOTION FAILED (3-8).
DEPARTMENT OF LABOR
Labor #6
ADD:
AGENCY: Department of Labor & Workforce
Development
BRU: Office of the Commissioner
Component: Alaska Safety Advisory Council
Fund Source Amount
Statutory Designated Program Receipts (SDPR)
$108,400
Co-Chair Mulder explained that the Intent Language would
read as follows:
"The amount appropriated by this appropriation includes
the unexpended and unobligated balance on June 30, 2002,
of the Department of Labor and Workforce Development,
Alaska Safety Advisory Council receipts under AS
18.60.840."
Co-Chair Mulder explained that the amendment would restore
the Alaska Safety Advisory Council (ASAC) by funding
activities through Statutory Designated Program (fee)
receipts (SDPR). In effect, the general fund budget
reduction remains. The ASAC operates entirely on fee
receipts from contracts with participants (entrance fees,
booth rental space and corporate sponsorships), who attend
the annual safety and health conference, thereby, qualifying
the program as a fee receipt program.
ASAC provides the following services which would be
eliminated:
• Coordination with official and unofficial
organizations and agencies to reduce accidental death
and injury;
• Recommendations to the governor, the legislature,
State departments and federal agencies, who develops
law, policies and programs addressing safety programs
and accident prevention;
• Annual safety conference that brings together over 500
participants interested in safety and health matters.
Co-Chair Mulder added that the staff would include one
seasonal clerical position and 13 non-compensated appointed
positions, consisting of individuals representing labor,
industry, and local, state and federal government.
Co-Chair Mulder MOVED to ADOPT Labor #6. There being NO
OBJECTION, the amendment was adopted.
DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
DOTPF#11
ADD:
AGENCY: Department of Transportation & Public Facilities
BRU: Marine Highway System
Component: Marine Vessel Operations
Fund Source Amount
Marine Highway Funds 1076 $4,000.0
Representative Hudson explained that the amendment would
allow the marine highway system to increase its revenue
charges to offset operating cost increases.
Representative Hudson MOVED to ADOPT DOTPF #11.
Representative Davies OBJECTED.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, discussed inconveniences
that would occur with summer bookings. The amendment would
create a lot of changes for this summer season.
Co-Chair Mulder thought that the Department could look at
alternative means beyond the scope of the amendment. He
suggested that the proposed amendment would not be a total
answer, rather a partial remedy.
Representative Croft commented that the amount could not
come close to the $4 million dollars. He pointed out that
it would affect new bookings this summer, a small number.
He stressed that this is a tax that will fall on local
residents. It would be an increased tax and would be
revenue. He recommended that all taxes be discussed in a
package of taxes. He stated that proposing the tax was
backward. The action does not discuss the revenue in any
way. Representative Croft emphasized that this is not
systematic and it is being hidden in the budget as an
allowance to raise taxes.
Representative Davies WITHDREW his OBJECTION to the
amendment. There being NO further OBJECTION, DOTPF#11 was
adopted.
RECESS: 11:10 A.M.
RECONVENED: 11:35 A.M.
LANGUAGE
Co-Chair Mulder introduced Language Amendments #6, #7, #8 &
#9.
Language #6
Insert in the beginning of the language section of the
operating appropriation bill:
Sec. A. R.EAPPROPRIATION OF UNEXPENDED AND UNOBLIGATED
BALANCE.
The unexpended and unobligated balance on December 31,
2002, of an appropriation made in Section B of this Act
is reappropriated to the Department to which the
appropriation was made for operating expenses of that
Department during January 1, 2003, through June 30,
2003.
Adjust internal section references accordingly. Section B
is the bill section that makes operating appropriations for
the first half of fiscal year 2003.
Language #7
Insert in the beginning of the language section of the
operating appropriation bill:
Sec. C. EARLY EXPENDITURE AUTHORITY.
Notwithstanding Section D of this Act, an appropriation
made in Section D of this Act may be expended for the
stated purpose of that appropriation before January 1,
2003, contingent upon compliance with the program review
provisions of AS 37.07.080(h).
Adjust internal section references accordingly. Section D
is the bill section that makes operating appropriations for
the second half of fiscal year 2003.
Language #8
Insert on Page 61, following line 3, a new subsection to
read:
(c) The unexpended and unobligated balances on December
31. 2002, of the appropriations made in (a) and (b) of
this section are reappropriated to the Office of the
Governor for operating costs of the Office of the
Governor for the period of January 1, 2003, to June 30.
2003.
Language #9
Lead-in Language for the Full Year Appropriation
* Section 1. The following appropriation items are for
operating expenditures from the general fund or other funds
as set out in Section 2 of this Act to the agencies named
for the purposes expressed for the fiscal year beginning
July 1, 2002 and ending June 30, 2003, unless otherwise
indicated. A department-wide, agency-wide, or branch-wide
unallocated reduction set out in this section may be
allocated among the appropriations made in this section to
that department, agency or branch.
Lead-in Language for the First-Half Year Appropriation
* Section 1. The following appropriation items are for
operating expenditures from the general fund or other funds
as set out in section 4 of this Act to the agencies named
for the purposes expressed for the portion of the fiscal
year beginning July 1, 2002 and ending December 31, 2002,
unless otherwise indicated. A department-wide, agency-wide,
or branch-wide unallocated reduction or increase set out in
this section may be allocated among the appropriations made
in this section or in section 1 to that department, agency,
or branch.
Lead-in Language for the Second-Half Year Appropriation
* Section 1. The following appropriation items are for
operating expenditures from the general fund or other funds
as set out in Section 8 of this Act to the agencies named
for the purposes expressed for the portion of the fiscal
year beginning January 1, 2003 and ending June 30, 2003,
unless otherwise indicated. A department-wide, agency-wide,
or branch-wide unallocated reduction or increase set out in
this section may be allocated among the appropriations made
in this section or in section 1 to that department, agency,
or branch.
1) The following appropriations are excluded from the
process (i.e., they receive full year appropriation in
Sections 1, 2 and 3 of the bill):
· Language Appropriations
· All formula programs
· University of Alaska
· Courts
· Legislature
· Other Allocations (included in attached list)
2) The remainder of the budget is split in half. The half-
year appropriations will appear as Sections 4 through 9.
(Sections 5 and 7 are fund roll-ups by agency and Sections 8
and 9 are fund roll-ups statewide.) Appropriations in
Section 4 are for the portion of the fiscal year beginning
July 1, 2002 and ending December31, 2002. Appropriations in
Section 6 are for the portion of the fiscal year beginning
January 1, 2003 and ending June 30, 2003.
3) In Sections 4 and 7 reduce each allocation by 10%, and
appropriate the l0% to new Agency-wide Unallocated Increases
components.
4) Unexpended, unobligated balances from the first half-year
are reappropriated to the respective Agency-wide Unallocated
Increases components for the second half of the year. The
amount of money appropriated at the end of the process is
identical to the amount appropriated at the starting point.
5) There is a Legislative Budget and Audit review process to
move money from a second-half appropriation to the same
appropriation for the first half-year.
Department of Administration
Special Systems
Unlicensed Vessel Participant Annuity Retirement Plan
Elected Public Officers Retirement System Benefits
Longevity Bonus Grants
Longevity Bonus Grants
Department of Community and Economic Development State
Revenue Sharing
National Program Receipts
State Revenue Sharing
Municipal Assistance
Fisheries Business Tax
Safe Communities Program
Safe Communities Program
Qualified Trade Association Contract
Qualified Trade Association Contract
Alaska Aerospace Development Corporation
Alaska Aerospace Development Corporation
Alaska Aerospace Development Corporation Facilities
Maintenance
Fisheries Enhancement Tax Receipts
Fisheries Enhancement Tax Receipts
Alaska Industrial Development and Export Authority
Alaska Industrial Development and Export Authority
Alaska Industrial Development Corporation Facilities
Maintenance
Alaska Energy Authority Statewide Operations and
Maintenance
Rural Energy Programs
Energy Operations
Circuit Rider
Alaska Science and Technology Foundation
Alaska Science and Technology Foundation
Alaska Seafood Marketing Institute
Alaska Seafood Marketing Institute
Department of Education and Early Development
K-12 Support
Foundation Program
Tuition Students
Boarding Home Grants
Youth in Detention
Schools for the Handicapped
Community Schools
Pupil Transportation
Pupil Transportation
Department of Environmental Conservation
Air and Water Quality
Air and Water Director
Air Quality
Water Quality
Commercial Passenger Vessel Environmental Compliance
Program
Department of Health and Social Services
Medical and Public Assistance Services
Alaska Temporary Assistance Program
Adult Public Assistance
General Relief Assistance
Old Age Assistance-Alaska Longevity Bonus (ALB) Hold
Harmless
Permanent Fund Dividend Hold Harmless
Tribal Assistance Programs
Child Care Benefits
Children's Health Eligibility
Medicaid Services
Catastrophic and Chronic Illness Assistance (AS 47.08)
Family and Youth Services
Foster Care Base Rate
Foster Care Augmented Rate
Foster Care Special Need
Foster Care Alaska Youth Initiative
Subsidized Adoptions & Guardianship
Court Orders and Reunification Efforts
Department of Military and Veterans Affairs
Alaska National Guard Benefits
Retirement Benefits
Department of Revenue
Permanent Fund Corporation
Permanent Fund Corporation
Alaska Housing Finance Corporation
Alaska Housing Finance Corporation Operations
Department of Transportation & Public Facilities
International Airports
International Airport Systems Office
International Airports
Anchorage Airport Administration
Anchorage Airport Facilities
Anchorage Airport Field and Equipment Maintenance
Anchorage Airport Operations
Anchorage Airport Safety
Fairbanks Airport Administration
Fairbanks Airport Facilities
Fairbanks Airport Field and Equipment Maintenance
Fairbanks Airport Operations
Fairbanks Airport Safety
Marine Highway System
Marine Vessel Operations
Marine Engineering
Overhaul
Reservations and Marketing
Southeast Shore Operations
Southwest Shore Operations
Vessel Operations Management
Southeast Vessel Operations
Southwest Vessel Operations
University of Alaska
University of Alaska
Budget Reductions/Additions - System wide
Statewide Programs and Services
Statewide Services
Statewide Networks (ITS)
University of Alaska Anchorage
Anchorage Campus
Kenai Peninsula College
Kodiak College
Matanuska-Susitna College
Prince William Sound Community College
University of Alaska Fairbanks
Cooperative Extension Service
Bristol Bay Campus
Chichi Campus
Fairbanks Campus
Fairbanks Organized Research
Interior-Aleutians Campus
Kuskokwim Campus
Northwest Campus
Rural College
Tanana Valley Campus
University of Alaska Southeast
Juneau Campus
Ketchikan Campus
Sitka Campus
Alaska Court System
Alaska Court System
Appellate Courts
Trial Courts
Administration and Support
Commission on Judicial Conduct
Commission on Judicial Conduct
Judicial Council
Judicial Council
Court-watch
Legislature
Budget and Audit Committee
Legislative Audit
Ombudsman
Legislative Finance
Committee Expenses
Legislature State Facilities Rent
Legislative Council
Redistricting Board
Salaries and Allowances
Administrative Services
Session Expenses
Council and Subcommittees
Legal and Research Services
Select Committee on Ethics
Legislative Operating Budget
Legislative Operating Budget
Debt Service and Special Appropriations Debt Service
Debt Retirement Fund
Certificates of Participation
School Debt Reimbursement
Alaska Clean Water Fund Revenue Bonds
Alaska Drinking Water Fund Revenue Bonds
International Airport Revenue Bonds
Special Appropriations
Anchorage Jail Lease
Fund Transfers
Alaska Children's Trust
Alaska Clean Water Fund
Alaska Drinking Water Fund
Disaster Relief Fund
Fish and Game Fund
Marine Highway Stabilization
Municipal Capital Project Matching Grant Fund
Oil and Hazardous Substance Release Prevention Account
Oil and Hazardous Substance Release Response Account
Power Cost Equalization and Rural Electric
Capitalization Fund
Permanent Fund Dividend Fund
Storage Tank Assistance Fund
Unincorporated Community Capital Project Matching
Grant Fund
Power Project Fund
Co-Chair Mulder explained that Language Amendments #6, #7,
#8 and #9 would bifurcate the budget. Half of the budget
st
would be appropriated through December 31, 2002 and the
th
other half would be appropriated through June 30, 2003. He
noted the list of amendments showing the division of
funding. The programs that the Administration has direct
control over would be funded at 50%. If there is a problem
within a Department, the Administration would have the
ability to come before the Legislative Budget and Audit
Committee (LBA) to request more funds.
Co-Chair Mulder noted that he was offering the amendments
Language #6, #7, #8 & #9.
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that Amendment #6 would move any unspent balance
st
from the 1 half of the year to the second half of the year.
Representative Croft asked if the budget had ever been
bifurcated before.
Mr. Teal did not know of a time it had occurred.
Co-Chair Mulder interjected that something "similar" had
been done before.
Representative Croft warned that dramatic consequences could
result by cutting the budget as proposed.
Mr. Teal advised that there would be problems. For the
accounting purposes, there would need to be a close out
process in December 2002. If there are problems, it will be
an accounting situation, not a budget problem.
Co-Chair Mulder advised that there is a flexibility tool
contained in Language #9, which reduces the appropriation
within each BRU by 5% for each half year and places it back
into the Commissioner's Office. He believed that it could
increase the flexibility within that office.
Co-Chair Mulder MOVED to ADOPT Language #6. Representative
Croft OBJECTED.
Ms. McConnell commented on the implications of proposing an
amendment of that magnitude without providing any lead-time
for ample consideration. She emphasized that if Language #6
was adopted, it would substantially affect all
administrations coming into office. Ms. McConnell advised
that closing out of a budget is not a small matter.
Ms. McConnell noted that there often is tremendous amount of
difference between the first half of the fiscal year and the
second half. It is not an even type matter for the budget
to be split like that. She stressed that the amendment
deserves further consideration. She commented that there
are no good elements within the proposal and pointed out
that the amendment would create a budget every six months
and will complicate any new administration coming into
office 25 days before the end of the first fiscal year half.
She added that the Division of Finance would be asked to do
more with less money also. She could not project the
practical implications of the motion.
In response to Representative Hudson, Ms. McConnell
explained that the process begins after the close of the
fiscal year. She pointed out the statutory reference. Ms.
McConnell noted the many national level changes regarding
what has to be reported and that process is very involved.
She added that there would be additional complications
because of all the work for the federal fiscal year.
Representative Hudson voiced concern bifurcating the budget
and the labor contracts. He advised that is a complicated
process for the Departments. He noted that he did not feel
comfortable with the language amendment package.
Mr. Teal explained that the amendments are a package and
that it is difficult to address them individually. The
language gives the Governor the ability to do things
differently, however, does not force him to do anything
differently. He reminded members that right now there has
been a significant "holding the line" on the budget. The
language would provide "flexibility" to the Governor.
Through the amendment, the unallocated reduction could be
taken and placed into a program that does not have as much
money as the department would like it to have and then place
it into another area. The amendment would provide more
flexibility to the Executive Branch. The Governor will have
the option to do it or not.
Representative Lancaster asked if the amendments would
"force" anything on the Administration.
Mr. Teal acknowledged that it would provide the
Administration a tool.
Representative J. Davies asked what would happen if
Legislative Budget and Audit (LBA) met and denied the
request.
Mr. Teal replied that if they denied the request, the
Governor could implement it anyway.
TAPE HFC 02 - 52, Side A
Co-Chair Mulder voiced concern that the current
Administration could "tie" the next administration's hands.
The amendment package does provide some flexibility. He
warned that the amendments provide a clear division, as this
Administration would spend beyond their full share. He
added that it was the intent to provide the next
administration with the maximum flexibility to make
necessary adjustments. He referenced a situation last year
when the LBA Committee turned down a proposed expense and
the Governor continued to proceed with the project.
Representative Croft requested greater clarification of the
language amendments.
Co-Chair Mulder advised that under the current guidelines,
the amendments would not "totally hamstring" the
Administration and would have practical implications.
Mr. Teal clarified that even if the Governor chooses to
disregard the bifurcation portion of it, which he could do
through the LBA process, the other portion is that it takes
5% of the budget and places it into an unallocated increase
so that it gives the administration more flexibility than it
has now as it would allow them to cross the appropriation
line.
Representative Davies elaborated that the amendment was
clearly a statement of "lack of trust and respect" for the
Administration. He emphasized that this was a partisan
attempt to bifurcate the budget into two pieces at a time
when the State is attempting to struggle with important
issues that need bipartisan support. Representative J.
Davies reiterated that proposing the language amendments was
a transparent bipartisan attack on the current Governor.
Representative Davies MOVED to TALBE all the language
amendments before the Committee. Co-Chair Mulder OBJECTED.
Co-Chair Williams interjected that a tabling motion was not
debatable.
A roll call vote was taken on the motion to table the
language amendments #6, #7, #8 and #9.
IN FAVOR: Croft, Davies, Moses
OPPOSED: Foster, Harris, Hudson, Lancaster, Whitaker,
Bunde, Mulder, Williams
The MOTION FAILED (3-8).
Representative Croft advised that no other Governor has
taken such action as proposed in Language #6.
A roll call vote was taken on the motion to adopt #6.
IN FAVOR: Foster, Harris, Lancaster, Whitaker, Bunde,
Mulder, Williams
OPPOSED: Hudson, Moses, Croft, Davies
The MOTION PASSED (7-4).
Mr. Teal spoke to Language #7 which would allow an agency to
come forward and go to LBA for their requests.
Co-Chair Mulder MOVED to ADOPT Language #7. Representative
Davies OBJECTED.
Representative Croft asked why the amendments had been faxed
to the Chairs office on March 14, 2002, two days prior. He
asked why they had not been included in member's packets for
consideration with that much lead-time.
Co-Chair Mulder responded that the Majority Leadership was
"working through the amendments" to make sure that they fit
in anticipation of any possible problems.
Representative Croft responded that the Minority had worked
"very hard" to get their 80 amendments to the Chairman's
office by the cut off deadline. He stated that with issues
this large, the minority should have been given time to
consider the legal implications of the language amendments
being proposed.
Representative Croft pointed out that there had been a
significant shift that the current Legislature has created
during the past four years. The formula programs are funded
at a low case scenario knowing that a supplemental would be
coming. Representative Croft stressed that the Finance
Committee was doing a dis-service to both administrations
with the proposed bifurcation. The implications will be
dramatic. Overspending on one hand and under-funding on the
other. He requested that the language amendments be offered
on the House floor in two days.
Co-Chair Mulder took exception to the accusation that the
Committee was "knowingly" under funding certain budgets. He
claimed that many of the numbers funded were the ones
brought forward by the Governor.
Representative Harris interjected that there are formula
programs that are not subject to bifurcation.
A roll call vote was taken on the motion to adopt #7.
IN FAVOR: Harris, Lancaster, Whitaker, Bunde, Foster,
Williams, Mulder
OPPOSED: Moses, Croft, Davies
Representative Hudson was not present for the vote.
The MOTION PASSED (7-3).
Co-Chair Mulder MOVED to ADOPT Language #8.
Mr. Teal explained that the amendment refers to the election
costs and the transition costs that the Governor requested.
The amendment would allow for any money that has not been
st
spent by December 31 to be reappropriated to the Office of
the Governor.
Representative Davies OBJECTED.
A roll call vote was taken on the motion to adopt #8.
IN FAVOR: Lancaster, Whitaker, Bunde, Foster, Harris,
Mulder, Williams
OPPOSED: Croft, Moses, Davies
Representative Hudson was not present for the vote.
The MOTION PASSED (7-3).
Co-Chair Mulder MOVED to adopt Language #9. Representative
Davies OBJECTED.
Mr. Teal explained the amendment would provide the language
that would lead into the number sections of the bill.
Representative Whitaker asked to respond to accusations made
through previous testimony regarding that the legislation as
a manifestation of partisan politics. He agreed with the
notion and need for parties to disagree. He stressed that
the disagreements should not be mischaracterized as being a
negative thing.
A roll call vote was taken on the motion to adopt #9.
IN FAVOR: Lancaster, Whitaker, Bunde, Foster, Harris,
Mulder, Williams
OPPOSED: Davies, Moses, Croft
Representative Hudson was not present for the vote.
The MOTION PASSED (7-3).
Representative Davies MOVED to WITHDREW all remaining
Minority amendments in view of the "nature of the process".
Vice-Chair Bunde MOVED to ADOPT an amendment, which would
allow the Division of Legislative Finance to make technical
adjustments to the legislation. There being NO OBJECTION,
it was adopted.
Vice-Chair Bunde MOVED to report CS HB 403 (FIN) and CS HB
404 (FIN) out of Committee with individual recommendations.
Representative Davies OBJECTED.
Representative J. Davies maintained that the proposed budget
is an unfair and incomplete effort at addressing the needs
of Alaska. He stressed that a "hold the line" budget should
maintain the same level of service and the proposed budget
clearly does not do that. The proposed budget holds the
line in nominal dollars but requires a high reduction of
services in the amount of $80-$90 million dollars. He
asserted that the proposed budget should be characterized as
a flat-line budget.
Representative Croft advised that the Minority had offered
only nine of the twenty-six amendments proposed. The nine
amendments totaled $17 million general fund dollars, which
represents less than a 1% increase to last year's budget.
Representative Croft stated that if those amendments had
been adopted, they were designed to support the
developmentally disabled, the front line social workers and
the Division of Family and Youth Services to protect
children. He stressed that adoption of the proposed
amendments would have made a far better budget.
Vice-Chair Bunde interjected that the budget is more than
just numbers as it is also about philosophy.
Representative Lancaster acknowledged that everyone has
areas of concerns within the proposed budget. He reminded
members that next week, the Committee would be considering
revenue measures.
Representative Whitaker commented that each of the
amendments presented had merit. Transcending individual
amendments is the need to provide for a stable fiscal future
for the State. He added that there are necessary components
for creating a long-term fiscal need and concluded that the
proposed budget is not irresponsible.
Representative Harris agreed that everyone has problems with
the proposed budget, however, the State cannot spend its way
out of the problems nor can it tax its way out of trouble.
Part of the solution has to be a restrain on spending. He
noted that the public has the option to turn down revenue
sources that the Legislature proposes. He added that
services and dividends are going to be affected and stressed
that through taxation, less money will be going to the
public.
Co-Chair Mulder claimed that that the proposed budget was a
responsible one. He admitted that it had been a difficult
process. He advised that the number of services that the
public wants is unlimited. The budget "holds the line",
which is the responsible thing to do.
A roll call vote was taken on the motion to move the bill
from Committee.
IN FAVOR: Whitaker, Bunde, Foster, Harris, Hudson,
Lancaster, Mulder, Williams
OPPOSED: Davies, Moses, Croft
The MOTION PASSED (8-3).
CS HB 403 (FIN) and CS HB 404 (FIN) were reported out of
Committee with "do pass" recommendations.
#
ADJOURNMENT
The meeting was adjourned at 12:31 P.M.
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