Legislature(2017 - 2018)HOUSE FINANCE 519
05/13/2017 01:15 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB23 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 23 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 23(FIN) am
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
1:20:37 PM
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, addressed
the changes from the governor's proposed capital budget and
the Senate version of the legislation. He read from an
explanation of changes:
Section 1, Pages 2-9: Agency capital appropriations
proposed by the Governor and amended by the Senate
Finance Committee
Changes:
Page 2, lines 24-25 Adds language that the
appropriation to the Alaska Energy Authority- Bulk
Fuel Program is conditional upon receiving matching
federal funds.
Appropriation are made from the Cruise ship Vessel
Passenger Tax as follows:
Page 2 lines 26 -30
The Alaska Railroad Corporation for: Seward Cruise
Ship Dock Terminal Planning and Design $300,000,
Seward Dock Safety Enhancements $1,200,000
Page 3 Lines 11-16
The Hoonah Dock Company
Inner Point Sophia Phase I, New Dock Mooring Buoys
$2,000,000
Outer Point Sophia Dock Safety Improvements $500,000
Page 4 Lines 4-5
City of Ketchikan
Cruise Ship Berth 4 Dock Expansion $2,000,000
Available funding from the Cruise Ship Vessel
Passenger Tax Account totals $7.5 million. The above
projects total $6 million.
Representative Wilson requested that Mr. Labolle slow down
his explanation.
Mr. Labolle complied. He continued reading from an
explanation of changes:
Page 3 lines 20-24. Reduces the appropriation to the
Inter- Island Ferry Authority by ($135,000)-There is a
Reappropriation in section 37 backfilling this
reduction. Total appropriation $250,000
Page 3 line 25-27 Marine Exchange of Alaska
appropriation is reduced from $600,000 to $400,000 -
In line with FY17 funding level
Page 3 Line 30 - Page 4 Line 3 Anchorage Police
Department for Patrol of the Seward Highway between
Anchorage and Indian. $200,000. Adds intent language
that the municipality and the department coordinate on
patrol of the Seward highway
Page 5 lines 4-5 $20 million appropriation from the
Alaska Capital Income Fund to the Office of the
Governor for state-wide agency deferred maintenance -
carry's out the intent of SB 107
1:24:20 PM
Mr. Labolle continued to read from an explanation of
changes:
Page 5 lines 6-8 Intent language that the Office of
the Governor prioritize deferred maintenance needs and
distribute the funds to address the highest priority
issues
Page 6 lines 32-33 Alaska Permanent Fund Corporation
Headquarters Renovation $4,050,000 APFC receipts
Page 7 lines 19-20 Alaska Housing Finance Corporation-
Supplemental Housing Development Program -reduced the
appropriation from $3 million to $2.25 million - this
was the FY17 funding level
Representative Guttenberg asked Mr. Labolle to restate the
line reference.
Mr. Labolle answered page 7, line 19. He continued to
discuss the changes:
Page 7, lines 21-22: Alaska Housing Finance
Corporation Teacher, Health and Public safety
Professionals Housing reduced the appropriation from
$1.750 million to $1 million - FY17 funding level
Page 7, lines 31-33: AMHS Vessel Overhaul the funding
source was switched from General Funds to Marine
Highway Vessel Replacement Funds and reduced by $1
million
Representative Wilson asked Mr. Labolle to restate the
location of the change. Mr. Labolle answered page 7, line
31.
Representative Wilson asked for verification the reduction
had been $1 million.
Mr. Labolle replied that the increment had been reduced by
$1 million and there was a fund source change. He continued
to address changes:
Page 8, lines 4-5. Reduced State Equipment Fleet from
$15 million to $12.5 million
Page 8, line 13: Reduced Federal Program Match from
$58 million to $12 Million, this is also reflected
same page line 10.
Page 8, lines 15-17: Inserted language relating to the
re-appropriation found in the language Section for
Federal-Aid Highway State Match totaling $41.1 million
- providing total match of $55.2 million (a reduction
of $2.8 million from $58 million)
Page 9, lines11-12: Added $5 million from the Alaska
Capitol Income Fund to the University of Alaska for
Deferred Maintenance
Items removed from the Governor's requested budget in
Section 1:
The appropriation to the Life Alaska Donor Services
because this has already been included in the
Operating Budget, $80,000 receipts
Public and Community Transportation State Match
$1,000,000
1:27:30 PM
Co-Chair Seaton asked for the page and line reference. Mr.
Labolle answered the items no longer appeared in the bill -
they had been in the governor's version, but had been
removed by the Senate.
Co-Chair Seaton asked for a repeat of the information.
Mr. Labolle detailed that the $80,000 agency receipts
appropriation to the Life Alaska Donor Services had been
moved to the operating budget because it was a recurring
expenditure.
Representative Guttenberg requested a copy of the items no
longer in the budget.
Co-Chair Foster replied that his office would provide the
information.
Mr. Labolle elaborated that the second item no longer
appearing in Section 1 (that had been in the governor's
request) was the public and community transportation state
match of $1 million.
Representative Wilson asked if there were any other funds
in operating or capital budgets related to the matching
funds.
Mr. Labolle answered for the match it was the only funding.
He added it was funding provided by the states to
communities to make their own federal match.
Sec. 2 Pages 10-12: The breakout of funding by agency
for the appropriations made in section 1
Sec. 3 Pages 13 & 14: The breakout of statewide
funding for the appropriations made in section 1.
Sec. 4 page 15 & 16: Supplemental capital projects and
grants.
Mr. Labolle noted that the supplemental capital
appropriations had been a separate bill, but the Senate had
rolled the items into the capital budget.
1:29:52 PM
Mr. Labolle continued to read from an explanation of
changes:
Items not included from the Governor's Supplemental
Capital request:
Reappropriation from the Fairbanks University Avenue
Project:
Arctic Strategic Transportation and Resources Project
- $7,798,000
Reappropriation from the Juneau Access Project:
Transportation Infrastructure Enhancement in Greater
Lynn Canal $34,140,100
Representative Guttenberg asked for verification the
increment related to Fairbanks, University Avenue. Mr.
Labolle answered in the affirmative.
Representative Wilson asked for a repeat of the last item.
Mr. Labolle answered "transportation infrastructure
enhancement in Greater Lynn Canal." He detailed that in the
governor's request, Juneau Access Project funds had been
reappropriated to the infrastructure enhancement in Lynn
Canal and ferry construction, which had been removed by the
Senate. He continued to address changes in the bill:
Sec. 5 page 16: The breakout of funding by agency for
the appropriations made in section 4.
Sec. 6 page 17: The breakout of statewide funding for
the appropriations made in section 4
Sec. 7 pages 18-38: supplemental operating items
proposed by the
Governor by Department, set out in Sec. 8.
Sec. 8 pages 39-44: The breakout of funding by agency
for the appropriations made in section 7
1:31:18 PM
Co-Chair Foster asked for page numbers for Section 8.
Mr. Labolle answered that Section 8 was located on pages 39
through 44; Section 9 was located on pages 45 through 47.
Sections 10-19 are primarily Governor's request
supplemental language sections as follows:
Sec. 10 (a) page 48, lines 1-6. Department of
Administration - labor contract negotiations and
arbitration support $792,000-extends lapse date
through FY18
Sec. 10 (b) Page 48 Lines 7- 11. Reappropriation of $3
million from the Department of Public Safety Academy
driver training facility, land acquisition and
construction for the Alaska Land Mobile Radio System
Sec. 11 page 48, line 12-16. Department of Commerce,
Community, and Economic Development - Appropriation of
$630,000 of Federal Receipts to the Division of
Insurance for the health insurance enforcement and
consumer protection grant for Fiscal years 17, 18, and
19.
1:33:03 PM
Mr. Labolle addressed Sections 12 through 15:
Sec. 12 page 48, lines 17-21. Department of
Environmental Conservation -Appropriation from the
general fund for $5,740,000 to fulfill the terms of
the Settlement in State v. Williams Alaska Petroleum,
Inc. - also referred to as the Flint Hills refinery
settlement
Sec. 13 (a) page 48, line 22-27. Department of Health
and Social Services - Medicaid language necessary to
cover potential program shortfall for FY17
(b) Lines 28-30. Federal Receipt authority for the
Medicaid program of $238,500,000 for FY17.
Sec. 14 page 48, line 31- page 49, line 5. Department
of Labor and Workforce Development - Reappropriation
to the Department in the amount of $213,155 for
deferred maintenance, renewal, repair, and equipment
Sec. 15 page 49, lines 6-29. Department of Law- (a)
Judgements and settlements broken out - total:
$228,671 (Language for Planned Parenthood Judgment was
removed) that language is "The necessary, after
application of the amount appropriated in (a) of this
section, to pay judgments awarded against the state on
or before June 30, 2017, is appropriated from the
general fund to the Department of Law, civil division,
deputy attorney general's office, for the purpose of
paying judgments against the state for the fiscal year
ending June 30, 2017" (c) Line 21: (c) extends lapse
provision to include FY18 and FY19 for the
reappropriation of $2,000,000 to the Department for
outside counsel and experts and for the state's share
of interim remedial actions to protect the health,
safety, and welfare of the people in the North Pole
area for FY14-19 (simply added fiscal year 19 to this
language)
1:35:18 PM
Mr. Labolle moved to Section 16:
Sec. 16 page 49, line 30 - page 50 - line 3.
Department of Transportation and Public Facilities -
$5,500,000 appropriation from the General Fund for
fulfilling the terms of the signed consent agreement
and final order with the United States Environmental
Protection Agency regarding the decommissioning and
remediation of Class V injection wells (this is
reduced from $8 million at $5.5 million is the amount
needed for FY17 and FY18)
Sec. 17 page 50, lines 4 - 31 - Page 51 Lines 1 - 17.
Debt and Other Obligations - subsection (a) reduces
the amount for early redemption on debt related to
international airport revenue bonds (about $21
million) Sec 17 (b) Page 50, line 26: reduces the
amount for debt service on Goose Creek Correctional
Center by $655,500 due to savings associated with
refinancing
Sec. 17 (c) Page 51 Line 3: appropriates $745,000 for
the costs associated with issuing previously
authorized GO Bonds. ($3 million for this purpose
lapsed at the end of FY16)
Sec. 17 (d) Page 51 Line 7 If federal receipts are not
sufficient to cover international airports, the
deficient amount would be borrowed from the General
Fund
Sec. 17 (e) Page 51 line 13: Allows for the repayment
in (d) if necessary (d) and are necessary as a result
of IRIS functionality
1:37:17 PM
Mr. Labolle moved to Sections 18 through 23:
Sec. 18 page 51, lines 18-22. Fund Capitalization -
(a) $3,000,000 is appropriated from the General Fund
to the Disaster Relief Fund
Sec 18 (b) Line 20: $288,000,000 is appropriated from
the Statutory Reserve Fund to the oil and gas tax
credit fund to pay outstanding tax credit liabilities-
this is new added by the Senate
Sec. 19 page 51, lines 23 - Page 52 Line 3: Fund
Transfer- Revises the date and amount to be
transferred to the oil and hazardous substance
prevention account in the oil and hazardous substance
prevention and response fund - Change is on page 52
lines 1 and 2 subsection (3)
Sec. 20 page 52, lines 4-12. Federal and Other Program
Receipts - Standard Federal receipt authority language
for agency's to receive Federal and other receipt
authority from Legislative Budget and Audit
Sec. 21 page 52, lines 13-17. Insurance Claims -
amounts to be received in settlement of insurance
claims are appropriated to the general fund from the
(1) State insurance catastrophe reserve account or (2)
appropriate state agency to mitigate the loss.
Sec. 22 page 52, lines 18-28. National Petroleum
Reserve - Alaska Impact Grant appropriated to the
Department of Commerce, Community, and Economic
development for capital project grants under the NPR-A
impact grant program. This year's grants total
$1,378,346 and will be distributed to the City of
Barrow, City of Wainwright, and the City of Anaktuvuk
Pass.
Sec. 23 Page 53, line 29 - Page 53, line 3: Alaska
Housing Finance Corporation [AHFC] - Amends the FY18
Operating Budget reducing the AHFC dividend that is
deposited into the General Fund by the capital and
operating operations that are made in FY18 using a
portion of the AHFC dividend
Mr. Labolle elaborated that the change to Section 23
essentially allowed AHFC to retain a part of the dividend
it paid the state for internal capital projects rather than
sending the state the entire dividend and making an
appropriation back to AHFC from the General Fund.
1:40:13 PM
Mr. Labolle advanced to Sections 24 through 28:
Sec. 24 page 53, lines 4-12. Department of Commerce,
Community, and Economic Development - Reappropriations
for: (a) Alaska Energy Authority Electrical
Emergencies- not to exceed $330,000.
Page 53, line 10-12. (b) reappropriates the unexpended
and unobligated balance of the renewable energy grant
fund estimated to be $3,200,000 to the Alaska Energy
Authority for Rural Power Systems Upgrades
(contingency language in section (contingency language
in section 41 50/50 match)
Sec. 25 page 53, lines 13-24. Department of
Corrections - Reappropriations from the State
Libraries Archives and Museum project to: (a)
Underground storage tank upgrades - not exceed
$1,850,000 and
Subsection (b) on Line 19: for Deferred maintenance,
renovation, repair, and equipment - not to exceed
$740,000
Sec. 26 page 53, line 25 - page 55, line 28:
Department of Education and
Early Development - Reappropriation of past major
maintenance projects to the Major Maintenance grant
fund - estimated to be $3,503,492
Sec. 27 page 55, line 29 - Page 56, lines 6.
Department of Fish and Game -Reappropriation for
vessels and aircraft maintenance, repair, and
upgrades- not to exceed $500,000.
Sec. 28 page 56, lines 7-26: Department of Health and
Social Services Reappropriations for (from various
sources, reference the bill) -
(a) Deferred maintenance, renovation, repair, and
equipment for Alaska Pioneers' Homes - not to exceed
$773,432
Line 17: (b) Deferred maintenance, renovation, repair,
and equipment for facilities of the department other
than Alaska Pioneers' Homes - not to exceed $382,143.
1:42:59 PM
Mr. Labolle addressed Sections 29 through 34:
Sec. 29 page 56, line 27- Page 57, line 5. Department
of Labor and Workforce Development- Reappropriation
for deferred maintenance, renewal, repair, and
equipment - not to exceed $550,000
Sec. 30 page 57 lines 6 - 8. Appropriates from the AK
liquefied natural gas project fund to Department of
Law $5,000,000 to hire additional prosecuting
attorneys. This is only for fiscal year 2018.
Sec. 31 page 57, line 9- 14. Department of Natural
Resources -Reappropriation for the national recreation
trails federal grant program - not to exceed $150,000
Sec. 32 page 57 lines 15 - 17. Department of Public
Safety appropriates from the AK liquefied natural gas
project fund to Department of Public Safety
$10,000,000 to hire additional state troopers. This
is only for fiscal year 2018.
Sec. 33 Page 57, lines 18 - 23. Department of Revenue
- (a) appropriation from the General fund to the Tax
Division for reprogramming the tax revenue management
system and revenue online tax portal - HB 111 oil and
gas tax credit bill implementation $1,200,000 - this
is contingent on passage of HB 111 (Contingency
language found in Sec. 41)
Line 21: (b) appropriation from the General fund to
the Tax division for Tax Division for reprogramming
the tax revenue management system and revenue online
tax portal - SB 25/HB 60 Motor Fuel Tax bill
implementation $50,000-this is contingent on passage
of SB 25/HB 60 (Contingency language found in Sec. 41)
Sec. 34 page 57, line 24 - Page 77 line 9. Department
of Transportation and Public Facilities -
Reappropriations (a) for the Izembek Road project -
not to exceed $10,000,000
1:45:34 PM
Mr. Labolle continued to address Section 34:
Subsections (b), (c), and (d) reappropriate to
Federal-aid Highway match
Line 30: (b) Federal-aid Highway match - not to exceed
$7,798,000
Page 58 line 5: (c) Federal-aid Highway match -
unexpended balance estimated to be $2,179,929
Page 58 Line 14: (d) Federal-aid highway match -
unexpended balance estimated to be $481,530
Page 58 Line 19: (e) - the unexpended estimated
balance of $281,393 from the Hydaburg small boat
harbor is reappropriated to the Harbor facility grant
fund
Page 58 Line 24: (f) Federal-aid Highway match -
estimated balance total:
$30,593,679 - Reappropriations start on page 58 line
27 - page 70 line
3 (118 reappropriations)
1:47:02 PM
Mr. Labolle continued to subsection (g) of Section 34:
Sec. 34 (g) Page 70, line 4 - page 71, line 31:
Cleaning up Federal Authorization -Consolidates
previously authorized federal-aid highway
appropriations into one new appropriation for
efficiencies in the management of the appropriations
in IRIS - estimated to be a total of $675,600,000,
reappropriated to the Department of Transportation and
Public Facilities for previously authorized federal-
aid highway surface transportation program projects
Representative Wilson asked if the cleanup items pertained
to federal, state, or a combination of federal and state
dollars.
Mr. Labolle answered that Section 34 dealt with federal
dollars associated with the federal highway program.
Subsection (h) on page 72 pertained to federal aid for the
aviation and rural airports.
Representative Wilson clarified she was interested in page
70, subsection (g). She asked if it was a cleanup because
there was additional state funding [allocated to projects]
that may not have been used, federal funds the state may
still be able to use, or both.
Mr. Labolle replied that funding in subsection (g) was
federal only. He elaborated that there were several cleanup
items in subsections, some of which were state and others
were federal, which went to various airport and road
programs.
Co-Chair Seaton asked if some of the unexpended balance
included both state and federal funds.
Mr. Labolle answered that there was General Fund
authorization in subsection (i), but funds were not
expected to be there - it was empty authorization that
needed to be taken off the books. He added there was
language included that specified if extra funding was
available it would be put in the federal highway match
program.
Co-Chair Foster recognized Representatives Harriet Drummond
and Louise Stutes in the audience.
1:49:51 PM
Mr. Labolle addressed the final references to Section 34:
Page 76, line 25: (k) Intent language for the cleanup
of past appropriations in the previous subsections
Page 76, line 29: $10,000,000 is appropriated from the
Alaska liquefied natural gas project fund to the
Department of Transportation for road maintenance and
plowing. This appropriation is only for FY 2018
Representative Wilson remarked that language had been
included specifying that two previous appropriations were
for FY 18. She stated the appropriation [on page 76, line
29] did not include the same language specifying the
appropriation was for FY 18. She asked if the funding could
be used "more like capital" that could be used for five
years.
Mr. Labolle answered that unless otherwise specified, any
appropriation in the capital budget was a one-time item.
Representative Wilson replied that she understood that
appropriations were one-time only, but she thought that the
recipient had five years to utilize the funds. She referred
to the items for DOL and DPS that were specifically for FY
18. She wondered if the appropriation for the item [on page
76, line 29] could be spread out over a five-year period.
Mr. Labolle answered that the item was a maintenance
project, not a capital project. He clarified that it was a
one-time appropriation for FY 18 that could be spent over a
period of five years.
Co-Chair Foster asked for clarification on the page and
line references. Mr. Labolle answered he was speaking to
page 76, line 29.
1:51:45 PM
Mr. Labolle addressed Sections 35 through 37:
Sec. 35 page 77, lines 1-5.: Fund Transfer - Transfer
of the large passenger vessel gaming and gambling tax
account balance to the Alaska Capital Income Fund
estimated to be $8,100,000
Line 4 Subsection (b) appropriates 25,000,000 from the
Alaska liquefied natural gas project fund to the
public school trust fund.
Sec. 36 page 77, lines 6- 9. Appropriates $37,500 for
Arctic Winter Games Team Alaska for participation in
the 2018 Arctic Winter Games (contingent on sec 41)
Sec 37 Page 77 Lines 10- 15. House Districts 33 -36 -
Reappropriation to the Inter-Island Ferry Authority as
identified in Section 1 to provide them $250,000 in
total for service between Ketchikan and Prince of
Wales Island (backfill mentioned in section 1)
1:53:05 PM
Mr. Labolle moved to Sections 38 and 39:
Sec. 38 page 77, lines 16 - Page 79, line 23. Office
of the Governor - Reappropriations to the Office of
the Governor subsections (a) and (b) for facilities,
and state government efficiency efforts, and to pursue
economic development opportunities for consideration
at the state and federal levels -estimated to be a
combined total of $2,738,000
Page 78, line 16: (c) to advance state government
efficiency efforts and to evaluate the current
structure and focus of AHFC, AEA, and AIDEA updating
date to include FY19 - estimated to be $850,000
Page 79, line 13: (d) for costs associated with state
government efficiency and to pursue economic
development opportunities for consideration at the
state and federal levels - estimated to be $950,000
Representative Wilson did not know what the agencies were
using the money for. She requested the backup information
to understand whether the funds would be spent on a new
program or other. She observed the funding was close to $4
million and she did not know what it would be spent on.
Mr. Labolle answered that he would get the information from
the Senate for the committee. He continued to read from an
explanation of changes:
Sec. 39 Page 79, line 24 - Page 80 lines 7.
Reappropriation of Legislative Appropriations -To
Legislative renovations, projects, and technology
improvements - estimated to be $6,465,000
Sec. 40, starting on page 80, line 8: Lapse - (a)
capital projects, Insurance claims to state agencies
to mitigate loss, and NPR-A grants lapse, (b)
capitalization of funds do not lapse and (c) capital
projects lapse unless a fiscal year is specified
1:56:02 PM
Mr. Labolle addressed Sections 41 through 43:
Sec. 41, Page 80, lines 15-26. Contingency Language-
(a) Rural power system upgrades state funding is
contingent on federal matching funds (section 24 page
53 line 10)
Line 18. (b) Appropriation of $1.2 million to the Tax
division for reprogramming the tax revenue management
system is contingent on the passage of HB 111- oil and
gas tax credits
Line 21. (c) Appropriation of $50,000 to the Tax
division for reprogramming the tax revenue management
system is contingent on the passage SB 25/HB 60 -
motor fuel tax
Line 24. (d) Appropriation made in Sec. 36 is
contingent on the raising of $450,000 by Arctic Winter
Games Team Alaska for team participation in the 2018
Arctic Winter Games.
Sec. 42 page 80, lines 27-28. Effective Dates for
Agency appropriations, debt and other obligations,
fund capitalization, fund transfer, and the motor fuel
tax passage implementation
Sec. 43 page 80 lines 29 - 30. Effective Dates for
Agency reappropriations, other reappropriations,
contingency language for rural power system upgrades
Sec. 44 page 80, line 31- Page 81 line 1: Effective
Date except sections 42 and 43 take effect July 1,
2017.
1:58:13 PM
AT EASE
1:59:37 PM
RECONVENED
Mr. Labolle made a correction to his statement related to
Section 44. He clarified that the effective date would be
July 1, 2017 except as provided in Sections 42 and 43.
^PUBLIC TESTIMONY
2:00:07 PM
Co-Chair Foster provided detail on public testimony
protocol.
2:00:50 PM
FRED STURMAN, SELF, KENAI (via teleconference), spoke about
companies leaving the state for other locations due to
better treatment. He surmised there appeared to be a
substantial amount of [oil] drilling in the Lower 48. He
supported the legislature's action of taking $50 million
from the gas pipeline - he thought all of the funds should
be withdrawn. However, he did not support reappropriation
of the funds - he thought the funds should be saved because
the money would be needed in the future. He shared that the
Kenai Peninsula Borough was taking about $4 million to $6.5
million out of the economy. He remarked that the City of
Kenai seemed to be short on money as it had lost $500,000
in sales taxes. He thought sales taxes were much lower in
many cities than they had been the previous year. He
supported further cuts to the budget and was disappointed
that the legislature was still giving raises to government
employees. He did not support that the legislature and the
state had offered to pay more than the government could
afford.
2:03:36 PM
ELSTUN LAUESEN, SELF, ANCHORAGE, addressed the portion of
the capital budget providing subsidies for oil companies in
the amount of $288 million. He did not know when the state
had gotten into the business of guaranteeing the
profitability of private oil companies. He wanted it to
stop. He thought it was a corrupt practice on the Senate's
side. He stressed that it was not the state's job to
underwrite the risks at the cost of the state's fundamental
services or the diversification of its economy. He read a
small portion of a blog written by Brad Keithly related to
the $288 million subsidy. He surmised that the state was
choosing the investors over the interests of the families
of the state (whose Permanent Fund Dividends had been cut).
He stressed it was not the role of the legislature.
2:07:15 PM
KARLA HART, SELF, JUNEAU, spoke in opposition to the
proposed $288 million appropriation from the budget reserve
fund to the oil industry. She stressed the substantial
figure. She reasoned that some programs required $10,000,
$100,000, or $1 million, which really made a difference for
those programs. She discussed that the $288 million could
be spent on things like capital or operating budget items,
education, matching federal funds, and other. She
underscored that the money was going to the richest
industry in the state. She believed the usage of the money
made no sense. She urged the committee to remove the
amount.
Vice-Chair Gara noted that there were two sides of the
issue and he tended to be on Ms. Hart's side. He relayed
that the Senate operating budget included $75 million in
oil tax credit payments; therefore, the total was about
$350 million.
Ms. Hart replied that it was worse than she had known.
Co-Chair Foster clarified that the committee was addressing
the Senate's version of the capital budget. The [$288
million] increment had been included by the Senate. The
committee would be considering whether it would address the
item in the coming days.
2:09:41 PM
WOLFGANG FAULKE, SELF, FAIRBANKS (via teleconference),
spoke in favor of eliminating the Permanent Fund Dividend.
He discussed that it had attracted numerous people for the
extra money and due to the one-year residency requirement
for eligibility. He urged the committee cut and eventually
eliminate the dividend. He spoke to the need for attracting
residents who could help develop the state and do something
productive. He noted that the state had much to offer
including mining. He did not want Alaska to be a welfare
state. He liked the dividend, but he believed there were
more useful ways to spend the funds.
2:12:03 PM
COLLEEN DOSHKIN, ADMINISTRATOR, ASSOCIATION OF ALASKA
HOUSING AUTHORITIES, ANCHORAGE (via teleconference),
testified in support of the Alaska Housing Finance
Corporation (AHFC) supplemental housing development grant
program. The organization requested to fund the program at
a minimum level of $3 million. She shared that the program
provided up to 20 percent of the total development costs
for energy efficiency, water and sewer, electrical
distribution, and access roads for housing projects. She
explained that the program was a wise investment of state
funds and when combined with additional resources results
in a critical boost to local economies throughout the
state. The program had been an incredible value to Alaska's
affordable housing by providing development gap funding.
She explained that in many cases the grant was a make-or-
break funding source that enabled a project to move
forward. She asked for the committee's support for the
funding for state sanitary development.
2:14:34 PM
CHRIS KOLEROK, PRESIDENT AND CEO, BERING STRAITS REGIONAL
HOUSING AUTHORITY, NOME (via teleconference), thanked the
committee for its time. He requested the minimum funding of
$3 million for the Alaska Housing Finance Corporation
(AHFC) supplemental housing development grant program. He
detailed that regional housing authorities were primarily
funded by federal appropriations; however, the funds were
less than they had been in the past. He stressed that
inflation had cut the housing authority budget in half and
people were feeling the pain. He provided examples of 19
individuals living in 3 bedroom homes. The AHFC helped to
fill an ever shrinking gap. He provided information about
materials the authority had purchased for projects in the
current year. He shared that 90 percent of the funds were
spent on Alaska workers or with Alaska businesses. He
concluded that funding the program at a minimum of $3
million was a wise investment for the state's economy.
2:16:51 PM
SCOTT MACMANUS, SUPERINTENDENT, ALASKA GATEWAY SCHOOL
DISTRICT, TOK (via teleconference), thanked the House for
its support for education. He shared that the district was
not unaware that budget issues existed and that it needed
to do its part to address them. He detailed that the
district had been planning for the contingency for a number
of years. He expounded that the district had implemented
biomass heating systems and power supplement systems in a
couple of its schools. Additionally, the district had
implemented pay freezes, it was not filling some positions,
and it would probably have to cut music and counseling
programs in the present year. He disputed claims that
teachers in Alaska were paid more than in other states. He
spoke to the inability to attract quality teachers due to
low pay, which was frustrating when trying to create a good
team for students. He had spoken at a recent University of
Alaska commencement ceremony and shared that a Tok high
school student had received their associate's degree and
would be graduating from high school as well. He urged the
committee to hold the line with the budget.
Vice-Chair Gara asked if the district was losing music and
counseling positions based on a flat budget or with the
Senate's proposal.
Mr. MacManus replied the positions would be lost under the
Senate's budget.
2:19:43 PM
GEORGE PIERCE, SELF, KASILOF (via teleconference), did not
support the bill. He was in favor of removing funding for
specific items. He was opposed to using money from the
Permanent Fund. He did not support paying $288 million to
the oil and gas industry. He stated that the Senate was a
joke. He detailed there was $25 million for election, yet
the Senate was proposing to cut state school funding by
nearly 6 percent. He asked if it was called giving from one
hand and taking from another. He did not support a $700
million tax credit for the oil industry annually. He asked
the committee to correct all of the giveaways. He stressed
that state funding for nonprofits had to stop. He did not
support corporations and LLCs being exempt from taxes. He
stressed that more cuts were needed. He asked why funding
had not been removed from the Juneau Access road project.
2:23:23 PM
JAMES KOWALSKY, SELF, FAIRBANKS (via teleconference),
testified in opposition to a $10 million appropriation for
the Izembek road. He stated that more than $50 million had
already been spent on evacuation considerations for King
Cove. He continued that federal tax money had been used. He
explained that tens of millions already spent on a road
partially north. He spoke to other expenditures. The
proposed road would mean that evacuations from King Cove
would take about two hours. He continued that $52,000 per
King Cove resident had already been spent. He elaborated on
costs that would be incurred by the state. He believed
medical evacuations on the road would be dangerous. He
thought the seafood industry was still the primary
justification for the road. He provided further detail. He
referred to hundreds of teachers losing their jobs due to
the budget shortfall. He underscored there were much
greater needs for the money than for use on the road.
2:27:50 PM
ABUL HASSAN, DIRECTOR, PUBLIC TRANSPORTATION, CITY OF
ANCHORAGE, ANCHORAGE (via teleconference), shared that the
bus ridership was 4 million. He referenced other programs
that ran between Anchorage and Mat-Su. He provided detail
about his professional background. He spoke to an
allocation from the governor that he believed could be
added back into the legislation. He detailed that the
matching funds enabled Anchorage to get an additional $1
million from the federal government. He discussed
individuals who relied on public transportation to get to
school, work, the store, and other. He underscored that the
$1 million cut would impact a large number of the
legislature's own constituency. He implored the committee
to restore the funding for public transportation. He added
that public transportation was the only agency that had
reduced its own budget and was making innovative changes
that were making national headlines.
2:31:21 PM
JOHN SONIN, SELF, JUNEAU, spoke on behalf of human
civilization. He did not want the House to capitulate to
the Senate version of the income tax. He did not want funds
to be robbed from transportation, education, and other
services. He stated that the legislature would have to take
money from vital services. He spoke about a recent
education rally at the capitol building. He wanted the
legislature to act on its constituents' behalf and not take
money from education. He supported new revenues. He was
concerned that the Senate may get the House to reconsider
its income tax proposal, which he believed was a critical
component.
2:35:07 PM
SCOTT ANAYA, SELF, ANCHORAGE (via teleconference), thanked
the committee for its work. He stressed that the
legislature's action would determine how bleak the state's
financial future would be or how the state would emerge
from the financial deficit. He urged the committee to stand
strong against the Senate's proposal. He believed the
House's work was the best option for coming out of the
deficit as unscathed as possible. He spoke from the
perspective of a small business owner and shared that the
recession had really hit main street retailers the previous
summer. He urged the committee to scrap the oil tax program
all together. He did not want further cuts to the Permanent
Fund Dividend. He was in favor of an income tax. He did not
want further damage to the economy. He stated that children
were the state's future.
2:38:44 PM
PAT LAVIN, DEFENDERS OF WILDLIFE, ANCHORAGE (via
teleconference), thanked the committee for its work to try
to balance the budget. He did not support further cuts to
education and critical services. He urged the committee to
delete the $10 million appropriation for the proposed
Izembek Road. He discussed that the road was unnecessary
and did not make sense as an emergency transportation
solution in the region. He noted that road maintenance
stations around the state had been closed due to budget
cuts; over 100 maintenance workers had been laid off. He
urged investing funds in priority projects that served
well-defined state needs. He beseeched the committee to
look into the project further before authorizing the $10
million in funds. He added that the $10 million cost would
be the tip of the iceberg if the road was built.
2:42:00 PM
ROB PICOU, SUPERINTENDENT, LOWER YUKON SCHOOL DISTRICT,
MOUNTAIN VILLAGE (via teleconference), encouraged the
committee to restore the Senate's proposed 5.6 percent cut
to public education. He stressed that the cut would bring
many districts across the state dangerously close to
implosion. The district had a $13.6 million structural
deficit as a result of flat funding. He understood the
fiscal crisis facing the state and the district had
eliminated all counselors and had cut administrative staff
by 60 percent. He shared that he had worked in various
roles in school districts in both rural and urban Alaska
for the past 20 years. He supported the restoration of
funds to the governor's recommendation for teacher health
and public safety housing. He spoke to a recent study
related to costs of education in Alaska. He discussed
reasons for teachers leaving the district including decent
housing conditions. The district was working with regional
partners to upgrade teacher housing. The district had spent
$4.3 million to renovate substandard and dilapidated
teacher housing - funds that could have otherwise been
spent on students. He spoke about teacher housing that
flooded annually. He continued that a six-plex construction
project was costing the district $2.3 million. He
reiterated his request to restore funding to the governor's
request of $1,750,000 for teacher health and public safety
housing.
2:45:47 PM
MARK SPRINGER, TULUKSAK NATIVE COMMUNITY, BETHEL (via
teleconference), spoke in support of a request for $300,000
for power plant upgrades. He did not see the increment in
the current bill version and asked for it to be restored.
He explained that the project was economic development and
community sustainability issue. He provided detail about
the current power plant operations. He explained that the
community did not currently have capacity to supply power
to the school, which it would like to have. He detailed
that Tuluksak had made a significant investment of its own
funds to improve capacity. He continued that several years
earlier the community had several million dollars through
the Alaska Energy Authority (AEA) for fuel upgrades, but
the money had been swept up for a parking garage. He
elaborated on the usage of requested funds.
Co-Chair Foster noted that a few years earlier when the
state was flush with funding each district had been
allocated capital funds to provide for projects like the
power plant upgrades. He explained that for the past few
years the legislature had not allocated the funding due to
a lack in funds. He elaborated that there had been no
discretionary and reappropriation funding over the past
several years, which in all likelihood would continue. He
noted that things would be taken on a case by case basis.
He encouraged people to continue to advocate for their
funding requests.
2:49:48 PM
SUSAN HANSEN, SELF, FAIRBANKS (via teleconference), spoke
against the $10 million increment for the road through the
Izembek Wildlife Refuge. She explained that the road had
initially been proposed in the 1990s as a road to expedite
shipping of seafood from canneries in King Cove to Cold
Bay. She detailed that the drive would take 1 hour and 50
minutes and the proposed goal was to use the road for the
emergency transportation of patients. She believed the road
would not be practical for that purpose. She asked the
committee to remove the item. She did not believe it was
prudent to ask taxpayers to fund the item.
2:51:14 PM
JOE BANTA, SELF, ANCHORAGE (via teleconference), spoke in
strong support for education. He asked the committee to
reject cuts proposed in the Senate's budget. He stated that
the Senate's budget favored tax cuts for big oil over
adequate education funding, housing, and other basic
infrastructure needs. He underscored that education
provided a future for the state's children. He urged the
committee to develop a comprehensive fiscal plan -
including new revenues - to deal with the budget deficit.
He remarked that taking the dividend could negatively
impact the state's economy. He urged a bipartisan effort to
solve the state's budget problem. He supported the
implementation of an income tax. He stressed that credits
of $350 million to the oil industry represented corporate
welfare. He did not support a change to the former oil tax
structure Alaska's Clear and Equitable Share (ACES) that
had taken place several years earlier.
2:54:21 PM
PAM GOODE, SELF, DELTANA (via teleconference), supported
further spending cuts to reduce the size of government. She
believed further cuts would make government stronger and
more efficient. She believed the best way forward was to
keep the money in the hands of the people. She did not
support an income tax. She stressed that the Permanent Fund
Dividend needed to go back into the hands of the people.
She was opposed to the appropriation of $288 million in
credits to the oil industry. She urged the committee to
make more cuts.
Co-Chair Foster CLOSED public testimony.
CSSB 23(FIN) am was HEARD and HELD in committee for further
consideration.
Co-Chair Foster noted amendments were due on Monday, May 16
at 6:00 p.m.
Representative Wilson stated there were projects included
in the budget that she did not know anything about. She
asked about resources to contact over the weekend to gain
more information.
2:57:20 PM
AT EASE
2:58:25 PM
RECONVENED
Co-Chair Foster replied that his staff and staff from the
Legislative Finance Division and Legislative Legal Services
would be available for questions.
Co-Chair Foster addressed the schedule for the following
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 23 Lower Yukon SD.pdf |
HFIN 5/13/2017 1:15:00 PM |
SB 23 |
| SB 23 ASTAR Letter NSB MAYOR.PDF |
HFIN 5/13/2017 1:15:00 PM |
SB 23 |
| SB 23 ASTAR funding request to House Fin-signed.pdf |
HFIN 5/13/2017 1:15:00 PM |
SB 23 |
| SB 23 Naneng Testimony Gara.pdf |
HFIN 5/13/2017 1:15:00 PM |
SB 23 |