Legislature(2021 - 2022)SENATE FINANCE 532
04/06/2022 01:00 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB162 || SB163 | |
| SB241 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 162 | TELECONFERENCED | |
| += | SB 163 | TELECONFERENCED | |
| *+ | SB 241 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SENATE BILL NO. 162
"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. 163
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; making capital
appropriations and supplemental appropriations; and
providing for an effective date."
1:04:19 PM
Co-Chair Bishop MOVED to ADOPT the committee substitute for
SB 162, Work Draft 32-GS2686\W (Marx, 4/5/22).
Co-Chair Stedman OBJECTED for discussion.
1:04:58 PM
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, discussed
"Differences between SB 162(FIN) Version I (AKA CS 0.5) and
Version W (AKA CS 1) The Big Picture" (copy on file):
? FY 23 revenue based on $80 per barrel of oil
o The revenue forecasts have been very volatile, the
more volatile a forecast, the less valuable it is
o The Chair wanted to base the budget on a more
realistic, historical revenue assumption, with
windfall revenue going to the capital budget and
savings
? Replenished the $660 million savings we used in FY22
to pay out an $1,100 dividend and to balance the
current budget.
o The Chair wanted to first repay money used from
savings, which were taken down to below $1 Billion,
before making new appropriations
1:06:56 PM
Senator Wielechowski asked whether the replenished savings
would go into the Statutory Budget Reserve (SBR) or the
Constitutional Budget Reserve CBR.
1:07:05 PM
Mr. Ecklund stated he was referring to the SBR.
1:07:15 PM
Co-Chair Stedman added that under revenue assumptions from
spring 2021 it had been difficult to get to an $1100
dividend for every Alaskan without overdrawing the
permanent fund. The challenge led to the drawing down of
$660 million in savings to produce the $1100 dividend. The
price of oil had increased, which changed things, but put
the state at net zero for the year.
Mr. Ecklund continued:
? Fully funded the following FY22 statutory items that
were vetoed or partially funded.
o Community Assistance ($7.1 million added to the FY22
payout to communities so communities receive $30
Million in FY22)
? Added $31.8 million to the community assistance fund
(bringing the fund balance to $90 M) in FY22 to ensure
a $30 million payout in FY23
o School Debt Reimbursement
o Rural Education Attendance Areas (REAA)Fund
o Oil and Tax Credits, $60 million UGF to bring the
FY22 total to the statutory calculated amount
Co-Chair Stedman asked what the REAA Fund was.
Mr. Ecklund replied that REAA stood for the Regional
Educational Attendance Area fund. Under statute the formula
connected the amount appropriated for school bond debt
reimbursement to the fund.
Mr. Ecklund continued:
Supplemental items agreed upon by the four co-chairs
were also added:
The FY23 totals in this bill (rounded) are:
Unrestricted General Funds $4,663,521.0
Designated General Funds $870,435.2
Other Funds $1,643,598.1
Federal Funds $3,089,157.0
Total Funds $10,266,811.3
Differences between CS0.5 and CS1 incorporates the
following:
? Sections 1 through 6 incorporate the actions of
the operating budget subcommittees for FY23.
? I will not be walking through the changes that
occurred in section 1 because reports of
differences were part of the Senate Finance
subcommittee closeout process and are available
on the Legislative Finance Division's website.
Because some appropriations in this bill were not
part of the subcommittee process, I will be
highlighting changes to these sections of the
bill.
Pages 58 - 66
o Sections 7-9 are Governor's operating
supplemental items that were agreed upon by
the four co-chairs.
o See the attached Legislative Finance
report and detailed reports on the web.
2. Pages 67 - 69. Sections 10-12 add supplemental
capital funding for an Information Technology Security
Program Assessment project in Health and Social
Services. This item, combined with the two
supplemental operating requests, completes the
requests made by the Department of Health and Social
Services to address the impacts of a cyber-attack.
o As a side note, we will be having a Committee
hearing on cyber-security in the near future
3. Page 70. Sec. 13: Added $1,783,000 funding to the
Court System to address the trial backlog. This
funding is available FY22 and for FY23.
4. Page 70. Sec 14. Appropriates a total of $199
million UGF to the principal of the Alaska Permanent
Fund to address Legislative Audit Findings that
mandatory statutory deposits were not paid in FY18 and
FY19.
5. Page 70. Sec 15. Restores the Governor's FY22 veto
of half of the statutory formula for School Debt
Reimbursement. $48.6 million
6. Page 70. Sec 16. Adds a lapse extension, through
the end of FY25, for the Department of Administration,
Labor Relations for labor contract negotiations and
arbitration support.
7. Page 70. Sec. 17
a. 17a. Clarifies that the $1 million of program
receipts for actuarial support costs is
appropriated to the Division of Insurance.
b. 17b. Fully funds the FY22 Statutory Community
Assistance payments shortfall of $7.1 million.
8. Page 71. Sec 18. Adds the Governor's FY22
supplemental requests for the Department of Health and
Social Services.
Subsection a adds $7.4 million to cover grantee
expenses
Subsection b adds $20 million federal funding
(Coronavirus State and Local Fiscal Recovery
Funds, CSLRF) for COVID response needs to an
existing FY22 $20 million appropriation and
extends the lapse date through FY25.
9. Page 71-72. Sec 19 is a FY22 supplemental request
from the Governor to place $1,953.7 of federal CRRSAA
funding in AMHS, where it can be expended, then swap
and backfill unavailable federal funds with UGF in
Highways and Aviation.
10. Page 72. Sec 20 Adds Election's FY22 supplemental
request for $4.3 million to for voter outreach and
other election purposes.
1:15:35 PM
Mr. Ecklund continued:
11. Page 72. Sec 21. Supplemental Funding
Capitalization
21a. Appropriates $31.8 million to the Community
Assistance Fund, bringing the total of the fund
to $90 million. This allows for the statutory
payout to communities of $30 million in FY23.
21b restores Rural Education Attendance Area's
$17 million FY22 veto that occurred last year.
21c. A $60 million UGF appropriated in FY23 to
the Oil and Gas Tax Fund to fully fund the FY22
statutory formula ($114 million total).
21d: $50 million UGF to the Disaster Relief Fund
12. Page 72. Sec 22 appropriates $660 million of
FY22 UGF to build up reserves that were depleted
when savings were used to pay an $1,100 dividend
last year.
13. Page 72. Sec. 23 appropriates $7,050,000 UGF for a
capital grant to a named recipient to offset some of
the financial impacts for the Alaska Longshoreman
Division. This funding will help maintain the health
insurance component for their membership and families.
14. Page 73. Sec. 25 adds intent that OMB provide
reports to the legislature of all transfers to and
from the personal services line.
15. Pages 73-75. Sec 27 includes Legal Services
language to ensure that the prior Department of Health
and Social Services appropriations are correctly
reappropriated to the two new departments created
under Executive Order 121.
16. Page 77. Sec 30
? Subsection 30c appropriates $3.36 billion, the
full 5 percent POMV payout, to the general fund
? Deleted the PFD appropriation of $1.68 billion
appropriation to pay a 50/50 dividend.
o The dividend will be debated in separate
legislation
17. Page 80. Sec 32h. Extended ASMI's American Rescue
Plan Act (ARPA) funding through the end of FY24.
18. Deleted the Department of Correction's Manday
billing language in anticipation of placing this
carryforward wordage in the section 1 in the next CS.
19. Page 81, lines 4-8. Sec 33(d) adds $1,647,000 UGF
to expand WWAMI (Washington, Wyoming, Alaska, Montana
and Idaho) seats from 20 to 30. This is a multi-year
appropriation to allow expansion of the program in an
appropriate time frame
1:19:07 PM
Mr. Ecklund continued:
20. Pages 81-86. Sections 34 and 35 includes Legal
Services reappropriation language to ensure that prior
Department of Health and Social Services
appropriations are transferred to the two new
departments created under Executive Order 121
21. Deleted Labor's Unemployment Insurance open-ended
federal language. This was replaced by a $10 million
federal, Section 1 (numbers) appropriation.
22. Deleted Department of Law's $4 million UGF for
litigation relating to defense of state's rights.
23. Page 88. Sec 39 added CDVSA grant funding to the
Department of Public Safety. To allow for smoother
distribution of declining federal receipts, this
funding was moved from the numbers section of the
budget and will be available through FY25.
o $8 million total, $3 million UGF and $5 million
federal
24. Page 88. Sec. 40b replaced the originally proposed
AMHS funding source in the backstop language with UGF.
Because federal funds should be sufficient, UGF should
not be needed.
25. Page 88, lines 30-page91, lin17. Sections 41b-e
adds fuel trigger funding that varies based on the
price of oil.
o $27 million UGF, to be distributed per formula
used for many years in the past
26. Page 91, lines 18-24. Sec 41f reflects moving half
of the UGF for two of the Governor's Executive
Operations allocations and all $250,000 of the
Contingency Fund to the second half of FY23 (effective
Jan 1, 2023).
27. Deleted the University of Alaska's request for
Drone program funding ($10 million), Critical minerals
and rare earth elements ($7.8 million), and Heavy Oil
Recovery method research and development ($5 million).
28. Pages 92-93. Sec 43d Adds funding to pay statutory
municipalities' debt service obligations for ports,
harbors, and other projects that were authorized by
the legislature in 2002.
29. Page 97. Sec 44e prohibits authorization of
certain federal receipts through the RPL process. In
addition, it prohibits AGDC from using the RPL process
to add any expenditure authorization.
30. Deleted two appropriations for the Alaska Gasline
Development Corporation.
o SDPR language capped at $10 million - Removed
o Open-ended federal authorization - Removed
31. Page 100. Sec 45t replaces an open-ended oil and
gas tax credits appropriation with a set amount of
$250 million.
o Based on oil revenue of $80 a barrel for FY23
32. Page 103. Subsection 46m appropriates large
passenger vessel gaming and gambling tax account
funding to the general fund ($10.2 million).
33. Page 104, lines 9-15. Subsection 48b revises
Salaries and Benefits language to reflect the addition
of the Alaska Higher Education Crafts and Trades
Employees, Local 60 ($357.6 UGF)
34. Page 106, lines 24-28. Subsection 49g clarifies
that calendar year 2022 tax revenue collected from the
commercial vessel passenger tax is appropriated to the
first seven ports of call, proportionately.
35. Page 107. Sections 52 and 53 include standard
retroactivity and effective date clauses.
1:24:32 PM
Senator Hoffman looked at page 7, item 25. He felt that the
fuel trigger was essential for the departments but also
directly affected the school districts. He thought school
districts could experience higher fuel costs that could
take funding away from classrooms.
1:25:08 PM
Co-Chair Stedman stated that there is more to come, and
that schools with oil boilers would be under financial
pressure due to the cost of oil.
Co-Chair Stedman WITHDREW their objection.
Co-Chair Stedman RE-OBJECTED for discussion.
Senator Wilson wondered about Page 4, line 8, subsection a.
He wondered where the additional information about the
grantee expenses could be found.
1:26:32 PM
AMANDA RYDER, STAFF, SENATOR BERT STEDMAN, replied that she
understood that $7.4 million was to cover grantee expenses
She had been told that the Department of Health and Social
Services (DHSS) had been struggling to keep up with
paperwork and the money would be used to help some
providers costs due to increased caseload brough on by
Covid-19.
1:27:13 PM
Senator Wilson requested more information from the
department on how the money would be dispersed. He asked
about Page 5, line 16 and the deletion of the PFD
appropriation. He thought that whatever was decided it
would be best not to leave a contingency in the bill.
1:27:57 PM
Co-Chair Stedman said that the committee was currently
crafting a bill to fund the dividend with a fiscal note. He
stressed that things were still under discussion and that a
dividend would be paid.
1:28:28 PM
Senator Wielechowski echoed Senator Wilsons dividend
concerns. He whether the Department of Environmental
Conservation (DEC) assuming primacy was reflected in the
budget.
1:28:40 PM
Mr. Ecklund replied that the DEC budget subcommittee had
included it in the subcommittee report, and it could be
found in the numbers section of the bill.
1:29:02 PM
Senator Wilson asked about Page 6, item 22, pertaining to
state defense rights. He wondered whether the funding was
multi-year.
1:29:26 PM
Mr. Ecklund replied that there had been a $4 million
appropriation made in the current year. He said $600,000
had been extended to date. The request was for an
additional $4 million, which would be decided by the
legislature.
1:29:54 PM
Senator Wielechowski asked about full funding for lawsuits.
1:30:13 PM
Mr. Ecklund replied that Judgements and Claims were not in
the bill.
1:30:31 PM
Co-Chair Stedman WITHDREW the OBJECTION. There being NO
OBJECTION, it was so ordered.
Co-Chair Stedman stated that the amendment deadline was 5pm
on Monday, April 11.
1:31:49 PM
Co-Chair Bishop MOVED to ADOPT the committee substitute for
SB 163, Work Draft 32-GS2687\G (Marx, 4/5/22).
Co-Chair Stedman OBJECTED for discussion.
1:32:30 PM
Ms. Ryder explained the committee substitute.
Co-Chair Stedman WITHDREW their objection. There being NO
OBJECTION, it was so ordered.
Co-Chair Stedman stated that the amendment deadline was 5pm
on Monday, April 11.
1:35:18 PM
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
discussed the presentation, "Fiscal Update and Senate
Committee Substitute" (copy on file). He looked at slide 2,
"Outline":
? Volatility and Spring Revenue Forecast
? Updated Fiscal Summary with Senate CS
Outlook at different oil prices
? Operating Budget Growth
? Position Count Growth
1:35:42 PM
Mr. Painter addressed slide 3, "Oil Price Forecast Update."
He explained that the red line represented the DOR spring
forecast numbers. He added that the green line represented
the futures market, which closely followed the forecasted
projections. He noted a declining pattern in the market; he
said that prices were expected to decline to the $70/bbl.
level by the middle of the decade. The current oil prices
were temporary.
1:37:16 PM
Mr. Painter pointed to slide 4, "Oil Prices, FY22 to Date."
He shared that the rise in oil prices began before the
Russian invasion of Ukraine and was not the sole factor
causing the current high prices. He spoke to the volatility
point and pointed out that there had been a $60 range in
price from day to day during the market year. He suggested
making the budget work at varying oil prices.
1:38:24 PM
Co-Chair Stedman lamented that the price of oil was the
most sensitive variable in the states revenue projections.
He said that taking a point in time and extrapolating out
led to projections that were highly improbable. He said
that the committee had dismissed the DOR spring numbers
when crafting the budget and had used $80/bbl. for their
projections. He related that there would be discussions
surrounding what would be done with any money above
$80/bbl. He warned that using $100/bbl. to balance the
budget would require relying on the continuation of the war
in Ukraine, which was not practical.
1:39:39 PM
Senator Hoffman spoke to the $21/bbl. swing between the
committee substitute and the governors proposed budget. He
wondered about what happens to surplus revenue and whether
there was contingency for revenue above the projected per
barrel price.
1:40:17 PM
Co-Chair Stedman replied that the committee had crafted a
plan for the surplus revenue.
Senator Hoffman shared that he had some ideas.
Co-Chair Stedman noted that each committee member had
contributed to the plan, which had stemmed from the concern
of improbably sustainable revenue projections. He asked Mr.
Painter to elaborate on the revenue spread that resulted
from extrapolating out from specific points in time.
1:41:13 PM
Mr. Painter noted that there had been three forecasts from
DOR in FY 22. He said that the preliminary forecast from
October 2021 showed significant increase from spring 2021,
the fall forecast was more pessimistic, the spring forecast
came out when oil was at the highest point for the year. He
encouraged looking at the potential revenues using a
sensitivity chart, which offered a range of prices. He
explained that there was significant spread just on the
difference of $1/bbl. He said that the differences in price
can change the revenue forecast by billions of dollars very
quickly.
1:43:09 PM
Mr. Painter looked at slide 5, "FY23 Oil Price Sensitivity
Chart."
1:43:53 PM
Co-Chair Bishop thought that the smart thing to do would be
to pick a point to create a budget that would be
sustainable, protect savings, and not require a change in
the constitution.
1:44:13 PM
Mr. Painter replied that in the times of higher oil revenue
for extended periods, missing the projections by a billion
was not as worrisome because savings were approximately $13
billion. He spoke to the budget deficit in 2013, which was
not a catastrophe because of the savings cushion. He noted
that currently having only $1.3 billion in the CBR should
dictate the risk level that the legislature should
consider.
1:45:05 PM
Co-Chair Stedman interjected that the CBR was down to $700
or $800 million.
1:45:16 PM
Mr. Painter agreed. He said that the balance increase was
due to the failure of the reverse sweep. The balance of the
Higher Education fund was propping up the CBR.
1:45:46 PM
Mr. Painter highlighted slide 6, "Takeaways on Spring
Forecast":
? Oil prices have skyrocketed in recent months, but
the market does not appear to expect that this will
last over the long term.
? Oil has been extremely volatile recently and there
is no consensus on the price outlook in the short
term.
? LFD advises the legislature to approach oil prices
conservatively given the level of volatility combined
with relatively small savings account balances to
backstop any shortfall.
1:46:31 PM
Mr. Painter pointed to slide 7, "Fiscal Summary: Senate
Finance CS, Spring Forecast (UGF only)." He noted that the
Capital Budget and the PFD had been left out of the
projection. He noted line 22. He shared that the forecast
for the FY 22 budget was 6,964.7, $8,331.0 for FY 23. Line
3 showed the marginal increase from the fall forecast. He
said that the agency operations number on Line 8, showed
that the Senate CS was $103.2 million about last years
level. He added that statewide items had increased 38
percent due to fully funding items and the increased oil
tax credits. He explained, assuming the DOR spring
forecast, not including the Capital Budget and the PFD
resulted in a surplus of approximately $3.7 billion. He
said that the reserves on Line 22 would go to the SBR and
CBR.
1:48:52 PM
Co-Chair Stedman asked about Line 23 and FY22. He reminded
the committee that the slide was a snapshot without the
Capital Budget or the PFD, neither of which would be
excluded, the exercise was become familiar with the amount
of potential excess revenue.
Mr. Painter shared that in FY 22 $400 million and $250
million combined, which was $660 million into the CBR to
payback draws. He said that in the bill the $660 million
was repaid back into the SBR.
Co-Chair Stedman asked about Line 23.
Mr. Painter replied that it reflected the post transfer
surplus if approximately $1.2 billion in FY 22 and $3.7
billion in FY 23.
Co-Chair Stedman asked about the viability of projections.
Mr. Painter said that the fiscal year would end June 30th
and oil prices would have to drop dramatically for there
not to be a significant surplus in FY 22. He believed that
even if oil prices were zero for the rest of the fiscal
year there would be an FY 22 surplus, barring any
additional appropriations on the fiscal year. He said that
the entire year of oil prices for FY 23 could change
dramatically.
1:51:32 PM
Senator Hoffman asked about line 23 and the surplus listed
there. He wondered whether it would be transferred into the
CBR.
Co-Chair Stedman asked for an explanation of the reserve
balance in the lower right-hand corner of the slide.
Mr. Painter said that the SBR balance was $70 million, and
he discussed the balances as they pertained to Senator
Hoffman's question.
Co-Chair Stedman said that there were large components yet
mentioned. Additionally, the committee had some control as
to where the surplus funds were put.
1:53:13 PM
Mr. Painter looked at slide 8, "Fiscal Summary: Senate
Finance CS, Spring Forecast (UGF only) with 50/50 PFD and
Governor's Capital Budget." The slide reflected the Senate
CS using the spring forecast and includeing the governors
proposed budget and the 50/50 PFD split. Not included were
the governors recently introduced infrastructure bill. He
said that the additions decreased the surplus, but there
was still significant surplus, based on the spring
forecast, in FY 22 and FY 23.
1:54:40 PM
Mr. Painter highlighted slide 9, "Fiscal Summary at $80
oil: Senate Finance CS, Spring Forecast (UGF only) with
50/50 PFD and Governor's Capital Budget. The result of the
lower oil price was that Line 23 was just over $100
million. There was still a surplus and the budget balanced
but the surplus was not as large as it was with higher
projected oil prices.
1:55:28 PM
Co-Chair Stedman spoke to the CBR balance and the SBR. He
thought that the minimum balance should be discussed for
both accounts. He thought that the $700 million from the
previous year was alarmingly low.
1:56:11 PM
Senator von Imhof asked about more funding for PCE.
Co-Chair Stedman answered that was one of the options under
discussion. He lamented that the state could not be run
with $700 million in savings. He reiterated his desire to
discuss the matter of savings.
1:57:17 PM
Mr. Painter pointed to slide 10, "Items Not Addressed in
the Senate CS":
? The current CS does not have a PFD appropriation.
? The committee's version of the capital budget has
not yet been introduced. The Governor's capital budget
was based on the Fall revenue forecast and does not
include additional items that the committee may
consider based on current revenue expectations such as
additional deferred maintenance funding.
? The Governor introduced a new infrastructure bill
and several budget amendments on Monday that have not
yet been addressed by the committee.
? The House Finance Committee's version of the
operating budget included K-12 forward funding, $57
million outside the formula for K-12, additional
payments for oil tax credits, a CBR reverse sweep, and
specified where surpluses would go. The Senate CS does
not yet address these items.
1:59:30 PM
Co-Chair Stedman said that there had been discussion about
the state savings balance and liquidity. He spoke of
actions taken 15 years ago to tackle deferred maintenance.
He thought that positioning the state to survive an
economic dip and considering the financial security of
communities were areas of concern, as well as K-12 forward
funding. He spoke to the variety of issues that should be
considered in the budgeting process.
2:02:13 PM
Co-Chair Stedman continued his remarks. He believed that
excess revenue should spill over to the permanent fund. He
thought that the state should take care to increase its
savings positions and tackle deferred maintenance. He added
that any excess revenue deposited into the permanent fund
would benefit future generations. He hoped the meeting
today would set the framework for positioning the state to
move forward financially into the future.
2:04:11 PM
Co-Chair Bishop noted that 14 years ago the state had a $15
billion surplus, due in large part to the prudent actions
of Co-Chair Stedman and Senator Hoffman. He noted that
previous committee co-chairs had been grateful while
spending those savings. He stressed that those savings must
be rebuilt.
2:05:08 PM
Senator Wilson wondered whether the exemption for the
possible additional payment of $75 million for failure of
the disparity test had been granted.
2:05:26 PM
Mr. Painter replied that he would not know the answer for
another month.
2:05:32 PM
Co-Chair Stedman asked Mr. Painter to explain the situation
Senator Wilson cited.
2:05:50 PM
Mr. Painter replied that in the K-12 formula there was a
federal disparity test that compared the best funded and
least funded schools. If the state passed the test, it
could deduct $75 million in federal impact aid from its
payment. The federal government changed the way it
interpreted the test to include the pupil transportation
formula, which caused the state to fail the test. The state
has appealed but if it lost the appeal, it would increase
the cost to the state, and ultimately the districts, by $75
million.
2:06:57 PM
Senator Wilson wondered whether the change would affect the
overall funding of the K-12 formula.
2:07:16 PM
Mr. Painter looked at slide 11, "Areas of Growth in FY23
Budget":
? Major increases in FY23 GovAmend:
$45.0 million for Medicaid.
$33.6 million UGF increases to offset DGF lost
in CBR sweep
$17.4 million combined increases in Department
of Public Safety
? Major increases from GovAmend to Senate CS1:
$59.4 million for AMHS (Governor eliminated
UGF)
$27.0 million for fuel trigger to offset high
oil prices
$14.5 million in University of Alaska
$13.4 million in Fish and Game
Mr. Painter reminded the committee that the fuel trigger
only increased if the price of oil increased. For example,
at $80/bbl. the fuel trigger would only be $5 million. He
stated that there were several other smaller increases in
the governors budget the ones listed on the slide were
the ones over $10 million.
2:09:59 PM
Senator Wilson spoke to the $45 million increase for
Medicaid and asked whether the Federal Medical Assistance
Percentage (FMAP) was expected to increase.
2:10:06 PM
Mr. Painter replied that he had not yet heard of an
increase and deferred to the administration.
2:10:25 PM
Mr. Painter pointed to slide 12, "Many FY23 Increases
Reverse Past Budget Reductions":
? Several increments in the Governor's FY23 budget
request reverse reductions or vetoes made since FY20:
$45.0 million Medicaid increase Medicaid was
reduced by $35.0 million in FY22.
$4.0 million University of Alaska increase UA
was reduced by $54.3 million from FY20-22.
$2.0 million for Legislative per diem vetoed
by Governor in FY22.
$0.7 million GF/MH items vetoed by the
Governor in FY22.
Several other items reverse reductions made from
FY15-FY19 under previous governors:
$4.9 million for DEC 404 Primacy this was cut
in FY15.
$3.8 million for wildfire prevention and
academy this was cut in FY16.
$2.4 million for Village Public Safety Officers
this was cut in FY16.
$1.2 million for Judiciary for increased hours
this was cut in FY16.
2:13:00 PM
Co-Chair Stedman noted that these were the highlights, and
a more extensive list could be found in members packets.
2:13:17 PM
Co-Chair Bishop added that the University cuts from 2016
made the total cuts to the University $110 million with a
loss of 1200 employees out of Fairbanks alone.
2:13:37 PM
Mr. Painter pointed to slide 13, "What's the True Operating
Budget Growth Rate?"
? Several changes from FY22-23 give the FY23 agency
operations budget a lower starting point than FY22.
? The Governor's FY23 budget increases agency
operations by $94.9 million (2.5 percent) over the
FY23 baseline.
? However, the Governor's budget uses temporary
federal funds in place of UGF for the Alaska Marine
Highway System. Keeping UGF funding level (as the HFIN
and SCS1 budgets do) would result in a $154.3 million
(4.0 percent) over the baseline.
? Senate CS1 is $239.2 million (5.8 percent) over the
baseline. HFIN is $272.9 million (6.7 percent) over
the baseline.
Mr. Painter said that the passage of SB 55 moved a portion
of retirement funding to agency operations, which resulted
in significant savings ($45 million) in FY 23. He said that
much of the savings was due to positive investment
performance and the decision by the ARM board not to invest
in the Health Care fund. He stated that the savings could
decrease if investment returns declined, or the board
resumed funding for the Health Care fund. He said that the
net of all the automatic changes was a reduction of $68.8
million. He relayed that when looking at the comparisons
between FY 22 and FY 23 the increase in agency operations
was undersold because the starting point was $65.8 million
ahead. He pointed to the table on the bottom of the slide,
which compared the growth rates of different budgets to the
starting point rather than the previous years budget. He
related that the governors FY 23 budget increased agency
operations by $95 million, or 2.5 percent, over the FY 23
baseline. He said that many of the governors reductions
were general funds for AMHS. He noted an error on the slide
and said that the box numbers were correct rather than the
final bullet point. He said that the growth factors were
above the rate of inflation and offered a point of
comparison: between FY 05 and FY 13 there had been
significant increases in oil revenue and agency operations
had grown 7.9 percent per year on average and doubled over
the decade. He stated that in the past when the state had
increased oil revenue there had been an increase in savings
as well as an increase in Operating Budget spending. He
shared that previous budget reductions and flat funding had
increased the demand for spending when funds were
available, but the growth was rapid in the various
scenarios presented so far.
2:17:32 PM
Mr. Painter looked at slide 14, "Full-Time Position Count
Comparison." He focused on the numbers at the bottom of the
slide. The governors budget increased the total position
count statewide by 233 full time positions. The House
Finance budget increase that by another 34, over the
governors proposal. The Senate CS was 1 higher, over the
governors budget. Legislative Council had recommended the
reclassification of security personnel for half to full-
time, which increase the count by 8 but was only a
technical reclassification. He said that there was
significant growth in positions being requested by the
governor and being approves by both legislative houses.
Co-Chair Stedman believed the presentation had provided the
committee much food for thought.
SB 162 was HEARD and HELD in committee for further
consideration.
SB 163 was HEARD and HELD in committee for further
consideration.
2:19:24 PM
AT EASE
2:29:41 PM
RECONVENED
Co-Chair Stedman handed the gavel to Co-Chair Bishop. Co-
Chair Bishop announced that there were no backup documents
to accompany the presentation for SB 241. He noted that
there were numerous members of the administration online
for questions.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 241 22.04.06 Attachment 1 - Infrastructure Bill Summary.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 241 |
| SB 241 22.04.06 Attachment 2 - DOTPF Airport Improvement Program Details.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 241 |
| SB 241 22.04.06 Attachment 3 - DOTPF Surface Transportation Program Details.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 241 |
| SB 241 22.04.06 GOV Infrastructure Bill SFIN FINAL.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 241 |
| SB 162 Handout - FY23 Increments Restoring Decrements or Vetoes.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 162 |
| SB 162 LFD Presentation- SFIN Operating CS 4-6-22.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 162 |
| SB 162 LFD Spreadsheet Packet 040622.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 162 |
| SB 162 Work Draft version W.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 162 |
| SB 163 Work Draft version G.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 163 |
| SB 162 FY23 CS 1 Language Explanation.pdf |
SFIN 4/6/2022 1:00:00 PM |
SB 162 |