Legislature(2015 - 2016)SENATE FINANCE 532
05/04/2015 01:30 PM Senate FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB1001 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB1001 | TELECONFERENCED | |
SENATE BILL NO. 1001
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, making
reappropriations, making capital appropriations, and
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."
1:33:23 PM
Co-Chair Kelly discussed housekeeping.
1:34:00 PM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, noted that there were others in the
gallery that could speak to specific items. She explained
that the CS isolated minor changes, while leaving HB 72
intact. The CS was isolated to the changes provided by the
administration as a starting point to spur discussion and
work toward a fully funded budget.
1:35:44 PM
Ms. Pitney referred to page 2, section 1, which listed
specific program funding sources:
* Section 1. The following appropriation items are for
operating expenditures from the general fund or other
funds as set out in section 2 of this Act to the
agencies named for the purposes expressed for the
fiscal year beginning July 1, 2015 and ending June 30,
2016, unless otherwise indicated. A department-wide,
agency-wide, or branch-wide unallocated reduction set
out in this section may be allocated among the
appropriations made in this section to that
department, agency, or branch.
Ms. Pitney spoke to the reinstated education funding line
items on Lines 13 and 14:
Alaska Learning Network - 599, 700
Pre-Kindergarten Grants - 2,000,000
Ms. Pitney continued to Lines, which reflected the
restoration of funds for Children's Services:
Front Line Social Workers - 1,000,000
1:36:43 PM
Ms. Pitney referred to Page 2, lines 21 through 27, which
showed unallocated reductions to the Department of Health
and Social Services:
Departmental Support Services 0 1,175,000 -1,175,000
Public Affairs 0
Commissioner's Office 0
Administrative Support 0
Services
Information Technology 0
Services
1:37:05 PM
Co-Chair Kelly asked whether funding for the Frontline
Social Workers were in the governor's original budget.
Ms. Pitney replied no.
Co-Chair Kelly asked whether Family Preservation funding
had been in the original budget.
Ms. Pitney replied yes.
1:37:35 PM
Senator Dunleavy wondered how the administration expected
the CS would succeed in being fully funded.
Ms. Pitney hoped that the CS would be a starting point for
a conversation that would result in the compromise
necessary to garner a three-fourths vote needed to get to a
fully funded budget.
1:38:28 PM
Co-Chair Kelly noted that the CS was not fully funded
either.
Ms. Pitney agreed.
Co-Chair Kelly declared that the senate had passed a fully
funded budget with HB 72.
1:38:38 PM
Senator Dunleavy asserted that the senate had passed a
fully funded budget. He said he did not understand how SB
1001 was fully funded.
Ms. Pitney reiterated that the budget would only be fully
funded if a compromise were struck between the minority and
the majority that resulted in a majority vote. She restated
that SB 1001 was intended to inspire further conversation
that lead to a compromise. She said that although the
senate passed the budget, the legislation now sitting on
the governor's desk was only two-fifths funded.
1:39:59 PM
Ms. Pitney continued to speak to Page 2, lines 21 through
27, which restored unallocated administrative reductions in
the Support Services area of the Department of Health and
Social Services. She said that the reductions had been fund
source changes from general fund to inter-agency receipts,
but would be restored back to general funds because the
inter-agency receipts would be unrecoverable. She added
that the Agency-wide unallocated reduction of travel and
support on Line 29, would also be restored.
1:40:58 PM
Ms. Pitney referred to Page 3, line 6 of the previous,
unfunded budget. She relayed that $9 million of a $14
million dollar request had been included for efforts on
North Slope Gas Commercialization; the CS reflected the
remainder of the original request from the governor at $4.9
million.
Ms. Pitney continued to Line 9, which listed the proposed
requests for the Department of Public Safety:
Alaska State Troopers 500,000 500,000
Alaska Wildlife Troopers - 500,000
Aircraft Section
Council on Domestic Violence and 1,500,000 1,500,000
Sexual Assault
Council on Domestic
Violence and Sexual Assault - 1,500,000
Ms. Pitney spoke to the prioritization of prevention funds
by the previous and current administrations for the Council
on Domestic Violence and Sexual Assault (CDVSA). She shared
that the program had been funded at $3 million in FY 15.
She said that the administration felt that the prevention
efforts in the areas of domestic violence and sexual
assault were significantly important in the state. She
reiterated that the bill was meant to be a tool to generate
discussion that would result in a fully-funded budget.
1:42:39 PM
Co-Chair Kelly asked how much had already been allocated
for the CDVSA.
Ms. Pitney said approximately $16 million, 80 percent of
which was for operating shelters.
1:42:57 PM
Senator Hoffman understood that the dollars would be
transferred from the Governor's Office to the Department of
Public Safety as one-time funds and would be eliminated in
FY17.
Ms. Pitney replied that the funding had been changed to
one-time funding on the house side, and cut altogether by
the senate. She stated that the $1.5 million would be used
for prevention efforts.
Senator Hoffman interjected that the council had $16
million in its budget.
Ms. Pitney clarified that the current $16 million of
available funding was not prevention funds.
1:44:44 PM
Ms. Pitney spoke to the Alaska Marine Highway System (AMHS)
item on page 3, line 22:
Marine Vessel Operations - 7,000,000
Ms. Pitney explained that AMHS had been sharply reduced in
the previous budgets; the CS would restore all of the
already published schedules for summer 2015, and maintain
some winter schedules. She noted that some winter schedules
would be impacted even with the restoration of the funds.
1:45:31 PM
Ms. Pitney moved to Line 27:
Budget Reductions/ Additions - 7,000,000
- Systemwide
Ms. Pitney related that the restoration would remove the
need to eliminate approximately 70 positions at the
University of Alaska.
1:45:57 PM
Senator Bishop asked whether a breakdown of the 70
positions could be provided.
Ms. Pitney replied that 40 percent of the positions would
be from the University of Alaska Fairbanks (UAF); 30
percent at the University Alaska Anchorage (UAA); 7 percent
at the University of Alaska Southeast (UAS); 17 percent at
the statewide office. She stated that UAF, UAA, and UAS
would see a 50 to 60 percent of faculty and a 50 to 60
percent staff reduction. The statewide office only had
staff positions. She shared that each university branch was
preparing a priority list of programs and services that
would be reduced.
1:47:14 PM
Co-Chair Kelly asked how much of the allocation was in
anticipation of salary increases.
Ms. Pitney explained that the $7 million was separate from
the salary increases.
1:47:32 PM
Senator Bishop stated that he had written a letter to the
UAA Board of Regents with cost savings suggestions and had
yet to receive a response. He hoped that the board would
respond so that positions could be saved.
1:48:09 PM
Senator Dunleavy asked Ms. Pitney to repeat what the
reductions would be at each university branch.
Ms. Pitney replied that current percentage distributions of
the reduction of the $30 million in general fund was: 41.9
percent at UAF; 33.4 percent at UAA; 7.2 percent at UAS;
17.5 percent in the Statewide Administration Office. She
furthered that the statewide off had been given a
proportionally larger share of the unrestricted funds to
minimize the impact on campuses and academic programs.
Senator Dunleavy queried the total number of positions that
could be lost.
Ms. Pitney replied up to 70.
Senator Dunleavy asked how many of the positions would be
teaching positions.
Ms. Pitney responded that the current estimate was 50 to 60
percent teaching positions.
Senator Dunleavy understood that the increase would fund
positions that were filled by real people; there would be
no empty PCN's.
Ms. Pitney said that the funds would save 70, currently
filled, positions.
1:50:40 PM
AT EASE
1:55:25 PM
RECONVENED
Ms. Pitney referred to page 3, line 32, which listed the
restoration of the cost of living (COLA) increases for
employees under labor contracts. She explained that the
intent was to allow the administration to honor existing
labor contracts and to perform "good faith" negotiations
with unions, while understanding that non-union employees
would not receive the COLA increase. She said that there
were three contracts, representing half of the state's
union employees, currently under negotiation. She relayed
that the intent was not to treat employees unequally, but
to honor the labor contracts in the same way the state
would honor its contracts with any other third-party.
1:57:03 PM
Co-Chair Kelly asked why the non-union COLA increases had
been removed.
Ms. Pitney replied that the increases for partially-exempt
and exempt employees were not under legal contract; the
state was not legally bound by contract to pay those
increases.
1:57:54 PM
Co-Chair Kelly understood that negotiations would happen
again with the three biggest unions in 2017.
Ms. Pitney confirmed that negotiations would be happening
for 2017, the state would be asking to reopen contracts for
2016.
Co-Chair Kelly asked why keeping the funds for non-union
employees had not been considered.
Ms. Pitney stated that the determination had been based on
the state's fiscal climate and the interest of honoring the
legal contract.
1:58:52 PM
AT EASE
2:08:53 PM
RECONVENED
Ms. Pat Pitney referred back to the question of funding for
labor contracts versus funding for non-union statewide
employees. She noted that the crux of the issue was the
honoring of the legal contracts, while understanding the
current fiscal constraints. She stated that the contracts
had been negotiated in good faith; the administration would
ask for reopeners in 2016, and certainly the fiscal crisis
would be considered during negotiations for FY17.
2:10:04 PM
Co-Chair Kelly stated the legislature not funding the
increases constituted a reopener. He opined that rejecting
the language was not equal to not honoring the contracts,
it would just reopen the negotiations. He added that he
still did not understand why the non-union contracts had
been removed.
Ms. Pitney stated that the COLA funding for only union
employees made the most fiscal sense.
2:11:53 PM
Ms. Pitney referred to Section 2, pages 4 through 11, which
listed the funding sources associated with Section 1. She
continued to Section 4, page 12, which listed the numbers
associated with Medicaid expansion. She pointed out that
the Department of Corrections (DOC) would see a savings of
$4,108,200 as a result of Medicaid expansion. She relayed
that the Department of Health and Social Services (DHSS)
was expected to see a savings of $1,558,700 in Behavioral
Health and $1,000,000 in Catastrophic and Chronic Illness
Assistance. Line 22 listed the acceptance of $145,438,400
in federal funds for the expansion.
2:13:32 PM
Ms. Pitney pointed out to the committee that Section 5,
page 13, listed the previous numbers by fund source.
2:13:52 PM
Ms. Pitney turned to Page 15, section 7, which appropriated
$118,000,000 from the in-state gas pipeline fund to the
public education fund.
2:15:43 PM
Senator Hoffman asked what the additional funding did to
increase the base student allocation (BSA).
Ms. Pitney replied that she did not have the figure.
Co-Chair Kelly interjected that the bill would bring the
BSA to $58.80.
2:16:21 PM
Vice-Chair Micciche understood the bill was intended to
created conversation that would lead to the three-quarter
vote needed to fully fund the budget. He contended that the
appropriations in the bill were the desires of the
governor. He thought that the politics of saving a few
programs would not be the answer to working toward a three-
quarter vote.
Ms. Pitney reiterated that the items in the CS were
reflective of the governor's priorities, and that the bill
was meant to reopen the conversation in order to negotiate
a wat to a fully-funded budget.
2:18:14 PM
Vice-Chair Micciche wondered whether the governor realized
that the appropriation process was the responsibility of
the legislature. He asked whether the governor could ever
support the previously passed budget bill.
Ms. Pitney responded that if a fully funded budget had come
to the Governor's desk, he would have supported the
authority of the legislature to pass a budget. She related
that the problem was that HB 72 had not been fully funded,
and there was no mechanism in place to move forward with
that piece of legislation.
Vice-Chair Micciche stated that the cuts that had been made
to HB 72 had been painful for everyone. He wondered whether
the administration recognized the difficulty of the job
that the legislature had done.
Ms. Pitney stated that the administration and the governor
were well aware of the state's fiscal situation. she
asserted that the governor's original budget had proposed
an approximately $700 million reduction, SB 1001 only
changed the spending plan proposed in HB 72 by 1.4 percent,
and the governor would have accepted HB 72 had it been
fully funded. She related that revenue measures would need
to be further discussed in the future because,
realistically, oil prices would not be rebounding to a
level that would balance the budget.
2:21:55 PM
Senator Hoffman asked how large of a cut the administration
anticipated in 2017.
Ms. Pitney reminded the committee that when the governor
took office her had requested that all commissioners
provide 5 and 8 percent reduction scenarios, which had been
the basis for the initial budget submitted for FY16. She
said that departments had been asked to project what their
agencies would look like after a 25 percent reduction in
budget. She stated that talks concerning efficiencies
across all agencies were still underway. She noted that
Conference Committee reductions relative to management plan
for several agencies exceeded 25 percent. She anticipated
that cuts for FY17 would be more difficult.
2:26:18 PM
Senator Hoffman understood that 8 percent was most likely
unachievable. He surmised that the administration was
looking to submit a further reduced budget to the
legislature in the future.
Ms. Pitney replied that that was the goal.
2:26:44 PM
AT EASE
2:27:30 PM
RECONVENED
Co-Chair Kelly expressed that the unexpected spending
proposed in SB 1001 would be difficult to explain. He spoke
of the $118 million in education funding, which was one-
time money. He thought that it was the governor's goal to
not have any cuts to education, but replacing the $118
million - plus increases - would be challenging. He spoke
of all of the cuts that the committee had made to the
budget already and warned that crafting a balance budget in
FY17 was going to be even more of a challenge.
2:30:57 PM
| Document Name | Date/Time | Subjects |
|---|