Legislature(2021 - 2022)SENATE FINANCE 532
05/05/2021 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB27 | |
| HB169 | |
| Presentation: Omb May 3, 2021 Amendments Op/cap/sup | |
| SB49 || SB51 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 169 | TELECONFERENCED | |
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 27 | TELECONFERENCED | |
| += | SB 49 | TELECONFERENCED | |
| += | SB 51 | TELECONFERENCED | |
SENATE BILL NO. 49
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental appropriations; making appropriations
under art. IX, sec. 17(c), Constitution of the State
of Alaska, from the constitutional budget reserve
fund; and providing for an effective date."
SENATE BILL NO. 51
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; making
supplemental appropriations; and providing for an
effective date."
1:05:21 PM
Co-Chair Stedman discussed the afternoon portion of the
agenda. The committee would consider adoption of a
committee substitute (CS) for SB 49 and SB 51 and would
hear a fiscal update from LFD. He explained that the
committee had been working on a base budget with fund
source exchanges, COVID-19 relief funds, and transfers from
other fiscal years excluded. The committee would consider
the base budget with recurring revenues and recurring
expenditures. The CS would include all subcommittee work,
and he would look to members for amendments and other
concerns to be submitted to his office by Friday.
Senator Hoffman MOVED to ADOPT proposed committee
substitute for SB 49, Work Draft 32-GS1509\N (Marx,
5/4/21).
Co-Chair Stedman OBJECTED for discussion.
1:07:27 PM
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, spoke to the
proposed CS. He discussed the structure of the bill, which
had been divided into sections and groupings for purposes
clarity. There was multiple numbers sections. He detailed
that Section 1 through Section 3 were the regular operating
budget, which contained the recommendations from all the
Senate Finance budget subcommittees. Section 2 and Section
3 were all the funding source roll-ups of all the
appropriations made in Section 1. He continued that Section
4 through Section 6 were the number sections operating and
supplemental items, and Section 5 and Section 6 were the
funding source roll-ups for all the supplemental operating
items listed in Section 4.
Mr. Ecklund added that Section 7 through Section 9 was the
numbers section for capital supplemental items. Sections 8
and 9 were the funding source 'roll ups' of all of the
supplemental capital items listed in section 7.
Mr. Ecklund read from a prepared statement:
The Language Section
The bulk of supplemental language items have been
grouped together at the beginning of the language
section. These varying supplemental language
appropriations could be for either operating or
capital items, as well as direct or 'inflexible' ARPA,
CRRSAA, CARES or from other federal acts that require
appropriation to be accepted.
Sections 10 27 of the language section are the bulk
of those varying language supplemental items for FY21
I just referred to
The remaining sections (28-59) are mainly more
'normal' or 'usual' FY22 language appropriations
1:09:45 PM
Mr. Ecklund continued his remarks about the proposed CS for
SB 49. He addressed the substance of the bill. He noted
that there were many reports that described the funding
laid out in the CS in varying degrees of detail. He noted
that there would be even more detailed reports posted on
LFD's website after the hearing.
Mr. Ecklund highlighted that one change incorporated in the
CS was the many transactions approved to accommodate the
Governor's request to consolidate human resources and
procurement into the Department of Administration. He
highlighted that it was the reason that members might
notice small differences between their subcommittee
recommendation and what was contained in the draft CS.
Mr. Ecklund gave a high-level overview of the dollars and
fund sources appropriated in the bill. He affirmed that he
would list all of the reports in front of members and may
reference them but did not intend for members to look at
the reports each time. He noted he would use round numbers
for clarity.
Mr. Ecklund addressed the budget totals:
Totals
FY22 Operating totals
All Funds 10.78 billion
UGF 4.56 billion
General funds 5.42 billion
FY21 Operating supplemental totals
All funds 1.27 billion
UGF 77.2 million
General funds 76.1 million (neg DGF sup of
just over 1 M)
FY21 Capital supplemental totals
All funds 168.7 million
UGF 10.2 million
General funds 30.8 million
Mr. Ecklund noted that there was a typo on member's sheets
and that the capital supplemental total should be for FY 21
rather than FY 22.
Mr. Ecklund addressed a packet of reports with a cover
sheet entitled "CS1 Reports Master Sheet" (copy on file).
The reports went into detail listing the fund sources and
dollars in the CS. He noted that there were three
spreadsheets in the packet, which OMB had presented the
previous Friday. The spreadsheets covered operating and
capital governor supplemental requests as well as federal
direct or 'inflexible' grant funds. He noted that there was
an added a Senate column that denoted whether a request had
been included in the CS. Further, there was a column
labeled 'lang', which stood for 'language'. He clarified
that a 'Y' in that column denoted that an item, if
included, could be found in the language section; while an
'N' in the column instructed that if that item was
included, it could be found in the supplemental numbers
section.
1:13:46 PM
Mr. Ecklund highlighted language items of note in the bill:
Sec 14 (f) the Administration requested extension
of an 'estimated to be $9 million federal'
appropriation related to CARES act funding from last
year, we are partially granting that request. There is
approximately $331 million of Coronavirus Relief Funds
(CRF) associated with the estimated to be
appropriation that we are not rolling forward to next
fiscal year
Sec 20 amends the current year 'Federal and Other
Program Receipts' or RPL language, to restrict
designated program and federal receipt authority from
being added to the Alaska Gasline Development
Corporation and for natural gas pipeline expenditures.
It also restricts the RPL process from being used for
the 'flexible' CRRSAA DOTPF funds and the flexible
ARPA funds. This section further restricts the RPL
process from being used for any future funds
appropriated by the 117th Congress for infrastructure,
jobs, or as part of the American Jobs Plan and federal
funds related to economic recovery.
Sec 21 (a) supplemental fund cap of $21,315,700 of UGF
to the Community Assistance Fund to bring the balance
of the fund to $90 million dollars so the FY22 payout
to communities will be $30 million
(b) $30 million UGF to the Disaster Relief Fund, the
Administration had asked for a re-appropriation for
this, we are using UGF
(c) $6.7 million re-appropriation of FY21 FAA match
that is no needed for match, to the Alaska Marine
Highway fund to bring the AMHS fund balance up to zero
at the end of FY21
Sec 27 NPRA Impact Grant Program, updated the FY21
estimate available and listed out the projects that
are to receive funding in FY21
Sec 31 Updated the Alaska Industrial and
Development and Export Authorities (AIDEA) dividend to
the correct amount, $17,305,000
Sec 32 (e) $2 billion transfer from the Permanent Fund
Earnings Reserve to the Corpus: leaving 9 billion 652
million of spendable realized earnings in the ERA on
June 30th (based on March 31st statement)
Sec 35 Carry forward language allowing FY21 federal
funds from man-day billings to be carried forward into
FY22 for the Anchorage Correctional Complex
Sec 37 Deleted: former section 13 (e), the request
to carry forward $35 million of Medicaid lapse for
FY22 expenses
Sec 38 Deleted: former section 14 (f) open ended
federal authority to the Dept of Labor for employment
and training services
Sec 40 Deleted: former section 16 (e) re-
appropriation request of $5 million in lapsing fire
suppression funds to DNR for fire break activities
will be addressed in the capital budget.
1:18:13 PM
Mr. Ecklund continued to highlight notable language items:
Sec 41 (b-j) this is the 18-month Marine Highway
Funding plan. The total AMHS budget for one year is
proposed to be the same level the Legislature passed
last year, $123.5 million. The proposal uses a mix of
CRRSAA FTA and FHWA federal funds (53,093,700), UGF
($66 million) and other funds ($4.4 million) to
support Marine Highway operations for the next
calendar year. This one-time 18-month plan uses one-
time federal funds to move the funding of the System
onto a calendar year basis.
Moving to calendar year funding will allow managers to
get the ferry schedule out to the public in July or
August for the following calendar year. Having a
reliable schedule out in advance has shown to increase
system revenues by over $5 million dollars.
Sec 41 (k) $10,525,400 dollars of federal CRRSAA and
ARPA FTA funds for Coordinated Transportation Grants
Sec 41 (l) $6 million of federal CRRSAA grants to the
Inter-Island Ferry Authority to replace their depleted
reserves and allow them to continue operation
Sec 44 debt and other obligations Deleted the
former section 20, relating to allowing the Department
of Revenue to issue Revenue Anticipation Notes
Sec 44 (L) full funding for school bond debt
reimbursement
$83,543,960
$52,744,460 UGF
$30,799,500 School Fund
Sec 45 (c) Same RPL restrictions as FY21, but for FY22
Sec 46 (g) $12,394,800 in FY22 from the PCE formula
payment to the Community Assistance Fund
Sec 46 (h) $17,605,200 in FY22 from the general fund
to the community assistance fund to bring the FY22
balance of the C.A. Fund to $90 million so there can
be a $30 million dollar payout to communities in FY23.
Sec 46 (k) $34,238,00 from the general fund to the
Regional Educational Attendance Area (REAA) Fund (full
funding)
Deleted: former section 22 (u) $50 million in program
receipt authority for AGDC for deposit into the Alaska
liquefied natural gas project fund
Deleted: former section 22 (v) open ended federal
receipt authority for AGDC
Sec 46 (u) Oil and gas tax credits: not to exceed $114
million from the general fund.
Sec 46 (v) $100 thousand from general fund program
receipts collected by DMV to the abandoned motor
vehicle fund for removing abandoned vehicles from
highways.
Sec 47 (L) Fund transfers: authorizes repayment of
WWAMI loans to the Alaska Commission on Postsecondary
Education to be deposited into the Higher Education
Fund, $504,044
Sec 47 (m) change the estimate to a zero balance of
the large passenger vessel gaming tax account deposit
into the general fund.
Sec 52 (a) Statutory Budget Reserve: The unencumbered
balance of the Unrestricted General Fund available for
lapse on June 30, 2021 are appropriated to the SBR
(estimated to be $100 million)
Sec 52 (b) the sum of $325 million is appropriated
from the general fund to the SBR (an FY21
appropriation)
Deleted the Constitutional Budget Reserve sections
Effective Dates: Made supplementals effective April
15th for agency supplemental funding needs and June
30th, for lapse and reappropriation provisions
1:23:43 PM
Senator Wielechowski asked about Section 31 and the Alaska
Industrial Development and Export Authority (AIDEA)
dividend, which referred to the "correct amount." He asked
if there was a statutory formula for the dividend.
Mr. Ecklund affirmed that there was a statutory formula for
the AIDEA dividend.
Senator Wielechowski asked if the formula was for a range
or a set number.
Mr. Ecklund could not recall the formula but thought the
amount would approximate half of the earnings.
Co-Chair Stedman thought the committee could ask the
question of LFD.
Senator Hoffman thought the general public should be aware
that although the Permanent Fund Dividend (PFD) was not
addressed in the CS, it was the intent of the Senate to
fund a PFD. He asked if his assumption was correct.
Co-Chair Stedman affirmed that Senator Hoffman was correct.
He stated that the topic of the PFD had yet to be taken up
by the committee. The committee's intent was to work on the
topic over the following two weeks. he informed that the
proposed $2 billion transfer from the corpus was a
placeholder. The committee would discuss and further review
the Earnings Reserve Account (ERA) with input from all
members as to whether to increase or decrease the amount.
He recalled that the previous legislature had put $4.9
billion in as a transfer.
1:26:14 PM
Senator Olson asked how $2 billion was decided upon as a
placeholder.
Co-Chair Stedman relayed that he had grabbed the number as
a starting point after consideration of inflation-proofing
numbers. He stated that a data sheet would be available to
the members when the topic was up for consideration. He
thought it would be nice if members had time to consider
the issue.
Senator Olson asked about Section 41, and the AMHS moving
to an 18-month funding plan. He wondered why the department
would not go to a six-month funding plan.
Co-Chair Stedman explained that the bill proposed to add
six months of one-time funding to the AMHS appropriation,
and later adjustments could be made with COVID-19 relief
funds. The following year would return to a 12-month cycle
with 6 months of lead time.
Senator Wilson asked about the proposed deletion of the CBR
section and asked if there would need to be a three-
quarters vote to enact the proposed budget.
Co-Chair Stedman stated there was currently no need for the
three-quarters vote, but as the budget process continued
the provision would have to be put back in.
Senator Wielechowski asked about Section 44 (l), which
proposed full funding for school bond deb reimbursement. He
asked if the funding was typical and normally drew from the
School Fund.
Mr. Ecklund answered in the affirmative, and that the
number used in the CS was the amount available that was
unspent in other parts of the budget.
Senator Hoffman asked about Section 46(u) pertaining to oil
and gas tax credits. He knew that the item had been
discussed by the committee as well as both bodies. He noted
that the language for funding the credits used the word
"may," which had been pointed out many times by Senator
Wielechowski; while the language for funding the PFD used
the word "shall." He felt a little uncomfortable in funding
the credits without knowing what the support was for
different level of funding.
Co-Chair Stedman thought the original submission was for
$60 million and there had been an amendment from the
administration that had been added. He thought the item was
open for discussion by the committee.
Senator Hoffman asked about discretionary capital funds.
Co-Chair Stedman noted that the committee was considering
the operating budget.
1:31:50 PM
AT EASE
1:31:55 PM
RECONVENED
Senator von Imhof asked about Section 52(a) relating to the
Statutory Budget Reserve (SBR) Fund, and the sum of $325
million. She asked for explanation of the section.
Co-Chair Stedman noted that the issue might warrant
discussion or changes by the committee. He explained that
that at the end of the fiscal year, the excess revenue in
the General Fund was swept into the CBR. The action would
"front-run" the balance available to sweep to the CBR
(which took a three-quarter vote to access) and put it in
the SBR, which only took a majority vote to access. He
considered that the action would make the funds more
accessible, while the funding amounts in the state's
accounts would be the same. He anticipated the committee
would discuss the matter and had the option of making
changes. He noted that LFD would discuss projected account
balances shortly.
Senator Hoffman referenced Section 32(e), which addressed
the transfer of $2 billion from the ERA to the corpus of
the Permanent Fund. He asked how the proposal was brought
forward to be included in the budget.
Co-Chair Stedman thought the state needed to make sure it
was inflation-proofing the Permanent Fund, and even though
there was a substantial appropriation the previous year,
the proposed appropriation would be an additional amount
into the constitutionally protected portion of the fund. He
reiterated that the amount was just a starting point for
the committee to consider. He acknowledged that the
committee may consider not doing the appropriation at all,
or changing the amount. He thought the committee needed to
consider a presentation on the Permanent Fund, including
the corpus and the ERA. He reminded that the PFD came out
of the ERA. He estimated that there was about $10 billion
unencumbered in the ERA, and perhaps $17 billion including
encumbered funds.
1:36:47 PM
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered. The CS for SB 49 was
ADOPTED.
Co-Chair Stedman encouraged members to contact his office
with concerns or proposed amendments by midday Friday, and
work with committee aides to resolve issues.
Senator Wilson MOVED to ADOPT proposed committee substitute
for SB 51, Work Draft 32-GS1508\G (Marx, 5/4/21).
Co-Chair Stedman OBJECTED for discussion.
Mr. Ecklund explained that the dollars appropriated in the
mental health bill were accounted for in the operating
budget reports. He noted that the other body would remove
the capital projects listed in the bill, and the Senate
would do the opposite, so all items were coferenceable. He
highlighted that there were six proposed capital projects
in the mental health budget bill, and the other body
removed five of the projects. The Senate proposed to fund
deferred maintenance and accessibility improvements for
$500,000.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered.
1:40:18 PM
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
addressed an earlier question by Senator Wielechowski about
the AIDEA dividend. He specified that the AIDEA dividend
could be anywhere between 25 percent and 50 percent of net
income, and the proposed $17.3 million represented the full
50 percent.
Mr. Painter discussed a presentation entitled "Fiscal
Update with Senate Committee Substitute" (copy on file).
Mr. Painter turned to slide 2, "Fiscal Summary Based on
Senate Committee Substitute," which showed a table of a
fiscal summary of SB 49. He detailed that the table went
back to FY 20 and showed the final budget and supplementals
for that year. The information for FY 21 included the
enacted budget and the supplementals included in the bill.
Information for FY 22 only included the appropriations
listed in the bill. The numbers for supplementals
referenced by Mr. Ecklund were on line 9 and line 12, which
resulted in a total deficit for FY 21 of just over $600
million. He explained that if the operating appropriations
in the bill for FY 22 on line 6 were the only
appropriations, there would be a $172.4 million pre-
transfer surplus. After transfers there would be a surplus
of $157.8 million.
Co-Chair Stedman asked if there was an expectation that the
capital budget would go against the $157.8 million.
Mr. Painter explained that the next slide showed more
information.
1:42:31 PM
Mr. Painter spoke to slide 3, "Fiscal Summary with Capital
Budget Placeholder," which showed a table using the
governor's amended capital budget of $62.2 million and
added UGF in place of the AHFC bonds. He relayed that the
bonds were in a bill that had not advanced very far in the
legislative process and were not relied upon for the
calculations. Adding the two amounts together would result
in a capital budget of $166.2 million of UGF, which was
highlighted in red on line 10. He summarized that there
would be a post-transfer deficit of $8.4 million with using
the placeholder, and the amount could end up higher or
lower. He noted that the numerics did not reflect the PFD.
Co-Chair Stedman asked if Mr. Painter was indicating that
the state's recurring revenue equaled its recurring
expenses if the legislature paid all the oil tax credits
and did not pay a PFD.
Mr. Painter answered in the affirmative.
Co-Chair Stedman reminded that there was an estimation for
the price of oil.
Mr. Painter agreed. He thought as oil prices went up and
down, the state could end up with a surplus or deficit, and
it was difficult to project.
Mr. Painter discussed slide 4, Use of Lapsing Funds in
Senate CS":
?According to OMB, $100.7 million of FY21 UGF
appropriations are expected to lapse:
$90.0 million in Medicaid (reduction from
previous $100.0 million
$4 million in Department of Corrections
$5.7 million in Department of Education
$1.0 million in other agencies
Senate CS directs this to the Statutory Budget
Reserve
?$75 million CBR direct appropriation for COVID 19
relief is also set to lapse to CBR as CARES Act made
it unnecessary
Governor requested reappropriating $30 million
of this to the Disaster Relief Fund and carrying
forward the remaining $45 million to FY22 this
would require a ? vote of the legislature
Senate CS allows full amount to lapse to the
Constitutional Budget Reserve
Direct appropriations from the CBR in FY21 coupled
with increased oil prices leads to post transfer
surplus in FY21 estimated to be $367.5 million after
supplemental appropriations
Senate CS includes $325.0 million appropriation from
general fund to SBR in FY21, essentially redirecting
this money from the CBR to the SBR"
Mr. Painter noted that in the CS for SB 49, the $100.7
million was directed towards the SBR. In the governor's
budget, $35 million of the amount was reappropriated for FY
22, and in the other body the budget reflected about $87
million of Medicaid lapsing funds were directed towards the
FY 22 budget as well.
1:46:55 PM
Mr. Painter continued to address slide 4. He recalled that
the previous year the legislature had funded about one
quarter (about $980 million) of the budget directly from
the CBR. There was a balanced budget after the transfer,
however higher revenue led to a projected $367.5 million
post-transfer surplus for FY 21. He explained that the CS
redirected $325 million of the surplus to the SBR. Instead
of the funds entirely lapsing back to the CBR, a portion
would go to the SBR.
Senator Wilson wondered why it was necessary to have a
three-quarters vote for an appropriation from the CBR, but
not necessary to divert the funds to the SBR.
Mr. Painter explained that because the funds were not being
appropriated from the CBR, the three-quarters vote was not
needed. However, at the end of the year the sweep provision
would capture the funds because the SBR was a "sweepable"
account. To keep the funds out of the CBR would require a
reverse-sweep three-quarters vote on July 1.
Co-Chair Stedman thought the reverse sweep could occur on
August 1 or September 1, whenever the legislature got to
doing a reverse sweep.
Mr. Painter referenced slide 5, "Projected Reserve Balances
in Senate Committee Substitute with Capital Budget
Placeholder," which showed a table entitled 'CBR Balance'
and a table entitled 'SBR Balance.' The starting balance of
the CBR available for appropriation was projected to be
about $1.4 billion for FY 21. He highlighted that about
$980 of direct appropriations that came out of the CBR,
while the $75 million from the COVID-19 appropriation and
the post-transfer surplus went back in, and the SBR
transfer came out. All the transactions roughly netted an
ending balance of $615 million. Based on the placeholder
capital budget, in FY 22 there would be some deposits and
earnings, a small post-transfer deficit, and an ending
balance of $657 million.
Mr. Painter addressed the SBR balance table shown on slide
5. He identified that the SBR would receive the $325
million appropriation, then the $1.7 million of lapsing
appropriations for an ending balance of $425.7 million and
a combined $1 billion in reserves. Without the SBR
appropriations, the CBR balance at the end of FY 21 would
be approximately $1 billion based on the CS.
1:51:06 PM
Co-Chair Stedman thought the committee would need the
assistance of LFD and perhaps the Alaska Permanent Fund
Corporation (APFC) to get an estimate and breakdown of the
ERA. He also thought assistance in understanding the amount
of the statutory dividend for FY 22. He wanted LFD to
return and present a wholistic picture for members to
consider. He referenced Senator Hoffman's earlier question
about the inter-tangling of appropriations and political
relationships. He thought it would be nice for LFD to
present some history of contributions into the corpus of
the Permanent Fund in order to understand the effects of
contributions.
Co-Chair Stedman asked the members to communicate with his
office regarding any data requests for LFD.
Co-Chair Stedman asked for Mr. Painter to look at a
hypothetical oil price of $70/bbl for FY 22. He considered
state revenues if oil prices were strong.
SB 49 was HEARD and HELD in committee for further
consideration.
SB 51 was HEARD and HELD in committee for further
consideration.
Co-Chair Stedman discussed the agenda for the following
day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 50 Supplemental All Funds-UGF-GF.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 50 |
| SB 50 Supplemental Capital Spreadsheet 5.5.21.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 50 |
| SB 49 Supplemental All Funds-UGF-GF.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 49 |
| SB 49 Supplemental Operating Spreadsheet 5.5.21.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 49 |
| SB 49 Federal Direct Inflexible ARPA Spreadsheet 5.5.21.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 49 |
| SB 49 OP All Funds-UGF-GF Summary.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 49 |
| SB 49 CSSB 49-50-51 Reports Master Sheet.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 49 |
| SB 49 work draft version N.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 49 |
| SB 51 work draft version G.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 51 |
| SB 49-SB 51 SFIN Fiscal Position 5-4-21.pdf |
SFIN 5/5/2021 9:00:00 AM |
SB 49 SB 51 |