Legislature(1999 - 2000)
05/06/2000 04:48 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 3002(FIN)
"An Act setting the compensation and certain benefits
of certain public officials, officers, and employees
not covered by collective bargaining agreements; and
providing for an effective date."
ANNALEE MCCONNELL, Director, Office of Management and
Budget, Office of the Governor, testified that because of
the confusion over the listing of salary and benefits
provisions, changes were made to separate each branch of
government and list their amounts individually. She
detailed the committee substitute adopted by the House of
Representatives.
Section 1 - Outlines the amount needed to cover all
the collective bargaining agreements for the executive
branch and the salary and benefits adjustments for the
non-covered state employees. This equals $20.3 million
total funds for the executive branch. Funding sources
are listed on page three.
Ms. McConnell pointed out that the general fund portion of
the legislation is covered by various reappropriations and
utilizes other savings as outlined later in the bill.
Section 1(d)(2) - Appropriates money into the marine
highway system fund to cover that agency's portion of
the increased costs.
Section 2 - The court system totals over $1.1 million,
all of which is general funds.
Section 3 - The University of Alaska totals $6.4
million, of which over $5.1 million is general funds.
Ms. McConnell noted that part of the increases for
University employees is already covered in the University's
$16.9 million budget request for FY 01. She added that this
language includes employees covered in bargaining units and
non-covered university employees.
Section 4 - The legislature totals $634,000 general
fund and provides that the lump sum payments only are
paid to legislative employees and not to legislators.
Section 5(a) - these items list the remainder of funds
needed to cover the executive branch and non-covered
employees increases.
Subsections 1 through 7 - Remaining balances from
the Department of Environmental Conservation water and
sewer projects already completed that equal $150,000.
Ms. McConnell commented that this reappropriation takes no
money from any project, and that the funds would typically
be available for reappropriation to other projects.
Subsection 8 - Balance of $107,000 of capital
appropriation for emergency housing originally Alaska
Housing Finance Corporation (AHFC) corporate receipts
that lapse at the end of the year.
Section 5(b) - Various miscellaneous appropriations
and reappropriations.
Subsection 1 - The remaining $52,000 of the K-12
foundation formula from the current year.
Ms. McConnell recalled there was an approximate $14 million
lapse balance, which the legislature appropriated all but
$52,000 for various purposes.
Subsection 2 - Unused funds requested in the FY
00 supplemental budget to cover increased fuel prices
for the Department of Transportation and Public
Facilities equaling $82,000.
Ms. McConnell explained that when the additional funds were
appropriated, the fuel prices had raised dramatically.
However, she stated, the gasoline prices have been reduced
somewhat and ten-percent of the entire $820,000
appropriation was not needed.
Section 5(c) - Investment Loss Trust Fund, further
releases totaling $4,055,600, which would clear out
the fund.
Ms. McConnell relayed that it was previously projected
there would be $2.3 million available for release from this
fund, most of which had already been appropriated through
the budget process to the Department of Transportation and
Public Facilities and other agencies. She stated that the
Department of Law had subsequently identified additional
claims against the fund that the courts could release in
the new few months, which in turn allow the reserves to be
released.
Section 5 (d) - Fish and Game Source
Subsections 1 through 5 - The capital items
Subsections 6 and 7 - conforming language
Subsection 8 - completes the transaction of the
fish and game funds into the general fund for the
purpose of funding the employee contracts.
Ms. McConnell reminded the Committee of the capital budget
deliberations where commercial fisheries entry commission
receipts were used in order to fund certain deferred
maintenance projects within the department. She noted a
balance of $900,000 remained in the fund after the
appropriations. She explained that these funds would be
used to replace general funds used for the deferred
maintenance projects, thus freeing up general funds for the
employee contracts.
Section 5(e) - Medicaid Pro-Share appropriates
$8,148,600 statutory designated program receipts
through the complicated program.
Ms. McConnell shared that the Office of Management and
Budget has had recent success in persuading hospitals to
participate in the Medicaid Pro-Share program.
Section 5(f) - Longevity Bonus Program remainder of
$1.4 million fast-track supplemental appropriation
amounting to $818,000.
Ms. McConnell reminded the Committee of the legislature's
intent to fully fund the longevity bonus program with lapse
funds from the Y2K readiness project. She noted that an
additional general fund appropriation was made to cover any
shortfall of Y2K funds. She stated that it was estimated
that $1.4 million general funds would be necessary, however
there were more Y2K funds lapsed than anticipated and only
$612,000 general funds were utilized.
Section 5(g) - Debt Service Offset incorporates the
final debt reimbursement amounts submitted by school
districts, which are $2 million lower than projected.
Ms. McConnell added that with higher than projected
revenues from the tobacco tax to appropriate to school debt
reimbursement, the total reduction to the general fund
appropriation is $4 million.
Section 5(h) - Establishes immediate effective dates
to ensure implementation this fiscal year.
Senator Phillips asked why the additional savings using the
Medicaid Pro-share funding source was not identified during
the normal budget process.
Ms. McConnell replied that the pro-share program has been
"enormously complicated" and that the process has been
expedited for implementation in 2001. She noted that
portions of the program have taken effect already, thus
increasing the savings. She added that the entire
supplemental budget appropriation for Medicaid was not
needed due to the implementation of this program and that
further savings could still be realized after final
determinations are made on June 30, 2000. She admitted that
it has been known there would be savings, but that the
amount of savings is still in question.
Senator Phillips next asked if the administration planned
for any supplemental requests to the FY 01 budget for items
other than forest fires and emergencies. He feared that
after these employee contracts are funded using the various
funding sources, the administration would submit many
requests for general funds to make up the shortfall.
Ms. McConnell responded that compared to the previous year,
formula programs more completely funded and would therefore
not require supplemental appropriations. She added that
Medicaid expenses cannot be precisely anticipated, and that
the costs range from $400,000 to $4 million
Senator Green referred to the language on page 6, lines 25
through 27, "The sum of $634,000 is appropriated from the
general fund to the legislature for salary and benefit
adjustments for legislators and employees of the
legislature for the fiscal year ending June 30, 2001." She
understood the legislators would not receive a salary
increase and but wanted to know if there would be a benefit
adjustment.
Ms. McConnell replied this language relates to changes in
health benefits but not the actual salary of legislators.
Senator Adams offered a motion to report CS HB 3002 (FIN)
am from Committee. Without objection, the bill MOVED from
Committee.
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ADJOURNED
Senator Torgerson recessed the meeting to the call of the
Chair at 9:26 AM.
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