Legislature(1993 - 1994)
02/16/1994 01:40 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 441 An Act reducing certain appropriations for fiscal year 1994; and providing for an effective date. HB 441 was HELD in Committee for further consideration. HB 455 An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date. HB 455 was HELD in Committee for further consideration. HOUSE BILL 441 "An Act reducing certain appropriations for fiscal year 1994; and providing for an effective date." HOUSE BILL 455 "An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date." JOY ALBIN, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS ALLIANCE FOR THE MENTALLY ILL, FAIRBANKS, spoke in opposition to HB 441 and recommended that the Medicaid reimbursement funds should be capped before programs are cut. DOUG POMEROY, (TESTIFIED VIA TELECONFERENCE), SELF, FAIRBANKS, spoke in opposition to HB 441 and encouraged that reductions not be carried into the operational grants for mental health centers. MARK GORMAN, (TESTIFIED VIA TELECONFERENCE), SOUTHEAST ALASKA REGIONAL HEALTH CORPORATION, SITKA, noted concern with the continual erosion from the operational base of mental health programs. Mr. Gorman spoke in opposition to HB 441. 2 JIM CLARK, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, CENTRAL PENINSULA CATHOLIC SERVICES, KENAI, recommended that cuts this year should come from disproportionate share dollars. He spoke in support of the Medicaid supplemental offered in HB 455, noting that Medicaid provides twenty-five percent of their current budget. CORAL ALLEN, (TESTIFIED VIA TELECONFERENCE), KENAI ALLIANCE FOR MENTALLY ILL, KENAI, spoke against "discretionary" funds being allocated for mental health concerns in the State. She urged the Committee to increase funding for mental health issues. MARTIN WHITE, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, MENTAL HEALTH CENTER, KODIAK, spoke against HB 441. FRANCIS CATER, (TESTIFIED VIA TELECONFERENCE), KODIAK ALLIANCE FOR MENTALLY ILLNESS, KODIAK, spoke in opposition to HB 441 urging that mental health be exempt from further cutting. GABRIELLA ARMSTRONG, (TESTIFIED VIA TELECONFERENCE), CLINICAL DIRECTOR, SEWARD LIFE ACTION COUNCIL, SEWARD, spoke in opposition to HB 441 noting that continual cutting will eliminate valuable mental health programs. TERRIE NASH, (TESTIFIED VIA TELECONFERENCE), RESIDENT, SEWARD, spoke in opposition to HB 441. W. HARRISON CHILDERS, (TESTIFIED VIA TELECONFERENCE), SUBSTANCE ABUSE COUNSELOR, CORRECTIONAL INSTITUTE AND SECURITY PRISON, SEWARD, stated that the proposed decreases to the budget will effect the quality of life, particularly, in Seward with less services being offered to inmates. This consequently will jeopardize the quality of life in the entire State. He spoke in opposition to HB 441. JOHN LOHSE, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, ALASKA VOCATIONAL CENTER, SEWARD, spoke in opposition to HB 441, adding that the impact of the legislation will detrimentally affect the quantity and quality of services provided throughout the State. KIM SORIANO, (TESTIFIED VIA TELECONFERENCE), FINANCIAL OFFICER, SEWARD LIFE ACTION COUNCIL, SEWARD, spoke against HB 441 and echoed concern with the statewide impact of the proposed cuts. RICK TESSANDORF, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE DIRECTOR, ADVOCACY SERVICES, ANCHORAGE, spoke in opposition to HB 441 stating that non profit providers do not have the assets to off-set the proposed retroactive reductions. 3 WES SKINNER, (TESTIFIED VIA TELECONFERENCE), ALASKA SPECIALIZED EDUCATION TRAINING SERVICES, ALASKA MENTAL HEALTH BOARD, ANCHORAGE, spoke in opposition to HB 441 and the effect the legislation would have on Alaskans. He urged the Committee to find cuts elsewhere in the budget, advising that Alaskans would rather see service-delivery for people who can not provide for themselves, than to be "fat cats with jobs in the high paid resource industries without services available". KEN TAYLOR, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE COMMUNITY MENTAL HEALTH CENTER, ANCHORAGE, spoke against HB 441 specifically addressing the retroactive cuts for service grants from the FY94 budget. (Tape Change, HFC 94-35, Side 1). YVONNE JACOBSON, (TESTIFIED VIA TELECONFERENCE), ALASKA ALL MENTAL HEALTH, ANCHORAGE, spoke in opposition to HB 441. WAYNE MCCOLLUM, (TESTIFIED VIA TELECONFERENCE), MENTAL HEALTH, TOK, spoke in opposition to HB 441. DIANA BRANDT, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE, spoke in opposition to HB 441. MARY JANE MICHAEL, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE, spoke in opposition to HB 441 and HB 455. She noted that the FY94 provider grants had been reduced by ten percent. Those funds were transferred to Medicaid. She noted that agencies had been promised by the federal government, that if the funds were not "recaptured", they would be returned in the fourth quarter. Concurrently, now health care providers are faced with a fourth quarter reduction of forty percent. Representative Hanley explained that $1.6 million dollars was placed into Project Choice last year in order to receive federal matching money. Project Choice did not get implemented as quickly as anticipated, consequently, people remained in community based services while the money had been transferred to the waiver program. The Subcommittee intends that $400 thousand dollars will be given to Project Choice. The remaining $1.2 million dollars will be placed into services. He added that this creates no net increase or decrease, only a change in allocations. Ms. Michael responded that many small agencies will not be able to wait until the beginning of the new fiscal year as the funds were originally promised for the beginning of the fourth quarter (4/01/94). 4 Representative Hanley agreed that the non profit organizations provide a great service for a cheap price. He added that community based services are cheaper than institutions. Representative Hanley pointed out that there are reserves to cover the gaps. Six percent of the unrestricted general funds are placed into mental health programs. Last year, $132 million dollars was spent on those programs. Representative Hanley continued that the six percent is equal to $100 million dollars which would result in an over expenditure of $32 million dollars. There currently is $140 million dollars remaining in the Mental Health Trust. He suggested that the mental health community prioritize within programs and recommended that those referenced by the teleconference participants be the ones maintained. Representative Hanley reminded all participants that there will be reductions with the current budget revenues. Representative Brown asked that information regarding budget "gaps" for FY94 and FY95 be made available to the Minority. BRENDA KNAPP, EXECUTIVE DIRECTOR, JUNEAU ALLIANCE FOR THE MENTALLY ILL (JAMI), JUNEAU, spoke in opposition to HB 441. She added, without the services and funding currently available, many of her clients would need to be hospitalized which would be much more costly to the State. She urged intent language be offered to assure that the budget cuts are equally distributed amongst all programs. ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT SYSTEM, provided the Committee with a handout addressing disposition cases throughout the State since July 1, 1993. [Attachment #1]. He explained that caseloads throughout Alaskan communities have risen as much as thirty percent. He pointed out that the Alaska Court System budget has only grown .3% since 1985. Mr. Snowden emphasized, that an additional $470 thousand dollar funding decrease would severely handicap the Court System. PETER BUSHRE, CHIEF FINANCIAL OFFICER, ALASKA PERMANENT FUND CORPORATION, DEPARTMENT OF REVENUE, spoke to the Alaska Permanent Fund's request for a supplemental appropriation. He explained that the Permanent Fund is currently worth $16 million dollars. The manager's fees and international custody fees have risen based on the value of the fund. Mr. Bushre pointed out that the amount requested in HB 455 of $2,379.0 million dollars would be short $815,000 thousand dollars. He pointed out that the language in Section 12 refers only to "equity management fees" and should also 5 include "custody fees". All expenses are paid from corporate receipts originating from the fund. NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, referenced the supplemental bill and the sectional analysis which would incorporate the changes recommended in the amendment submitted by the Governor. (Tape Change, HFC 94-35, Side 2). Co-Chair MacLean provided the Committee with capital appropriation budget information. Identification of unobligated general funds existing from past capital appropriations including all federal authorization has begun. She said repeals will not have an effect on capital dollars which have already been encumbered. There will be a "window of opportunity" allowing state agencies to encumber and expend balances until June 30, 1994. She added that to date, $80 million dollars has been identified as unobligated, unexpended general funds still on the books appropriated prior to July, 1990. This information will be provided to all House Finance Committee members. Ms. Slagle provided a sectional overview of HB 455, the Supplemental legislation. GOVERNOR'S OFFICE * Sec. 1 Office of Management and Budget - $1,621.4 million dollars This request would provide salary adjustments required to comply with the Fair Labor Standards Act. DEPARTMENT OF ADMINISTRATION * Sec. 2 Longevity Bonus Grants - $2,191.3 million dollars This request would provide funds to assist an increased number of recipients. SHARON BARTON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION, explained the initial budget was based on an estimate. Program changes this past year have created unpredictability in program behavior. The request reflects participants over and above those anticipated when the budget was written. HB 441 and HB 455 were HELD in Committee for further 6 discussion. # ADJOURNMENT The meeting adjourned at 3:30 P.M. HOUSE FINANCE COMMITTEE February 16, 1994 1:40 P.M. TAPE HFC 94 - 34, Side 2, #000 - end. TAPE HFC 94 - 35, Side 1, #000 - end. TAPE HFC 94 - 35, Side 2, #000 - #336. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 1:40 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Foster Representative Grussendorf Representative Therriault Representative Parnell was not present for the meeting. ALSO PRESENT Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget, Office of the Governor; Arthur H. Snowden, II, Administrative Director, Alaska Court System; Peter Bushre, Chief Financial Officer, Alaska Permanent Fund Corporation, Juneau; Sharon Barton, Director, Administrative Services, Department of Administration; Francis Cater, (teleconference), Kodiak Alliance for Mental Illness, Kodiak; Martin White, (teleconference), Director, Mental Health Center, Kodiak; Doug Pomeroy, (teleconference), Self, Fairbanks; Joy Albin, (teleconference), Fairbanks Alliance for the Mentally Ill, Fairbanks; W. Harrison Childers, (teleconference), Substance Abuse Counselor, Correctional Institute and Security Prison, Seward; John Lohse, (teleconference), Director, Alaska Vocational Center, Seward; Terrie Nash, (teleconference), Resident, Seward; Kim Soriano, (teleconference), Financial Officer, Seward Life Action Council, Seward; Gabriella Armstrong, (teleconference), Clinical Director, Seward Life Action Council, Seward; Mark Gorman, (teleconference), Southeast Alaska Regional Health Corporation, Sitka; Jim Clark, (teleconference), Director, Central Peninsula Catholic 7 Services, Kenai; Coral Allen, (teleconference), Kenai Alliance for the Mentally Ill, Kenai; Wayne McCollum, (teleconference), Mental Health, Tok; Mary Jane Michael, (teleconference), Anchorage; Rick Tessandorf, (teleconference), Executive Director, Advocacy Services, Anchorage; Wes Skinner, (teleconference), Alaska Specialized Education Training Services, Alaska Mental Health Board, Anchorage; Ken Taylor, (teleconference), Anchorage Community Mental Health Center, Anchorage; Yvonne Jacobson, (teleconference), Alaska All Mental Health, Anchorage; Brenda Knapp, Executive Director, Juneau Alliance for the Mentally Ill (JAMI), Juneau. SUMMARY HB 441 An Act reducing certain appropriations for fiscal year 1994; and providing for an effective date. HB 441 was HELD in Committee for further consideration. HB 455 An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date. HB 455 was HELD in Committee for further consideration. HOUSE BILL 441 "An Act reducing certain appropriations for fiscal year 1994; and providing for an effective date." HOUSE BILL 455 "An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date." JOY ALBIN, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS ALLIANCE FOR THE MENTALLY ILL, FAIRBANKS, spoke in opposition to HB 441 and recommended that the Medicaid reimbursement funds should be capped before programs are cut. DOUG POMEROY, (TESTIFIED VIA TELECONFERENCE), SELF, FAIRBANKS, spoke in opposition to HB 441 and encouraged that reductions not be carried into the operational grants for mental health centers. MARK GORMAN, (TESTIFIED VIA TELECONFERENCE), SOUTHEAST ALASKA REGIONAL HEALTH CORPORATION, SITKA, noted concern 8 with the continual erosion from the operational base of mental health programs. Mr. Gorman spoke in opposition to HB 441. JIM CLARK, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, CENTRAL PENINSULA CATHOLIC SERVICES, KENAI, recommended that cuts this year should come from disproportionate share dollars. He spoke in support of the Medicaid supplemental offered in HB 455, noting that Medicaid provides twenty-five percent of their current budget. CORAL ALLEN, (TESTIFIED VIA TELECONFERENCE), KENAI ALLIANCE FOR MENTALLY ILL, KENAI, spoke against "discretionary" funds being allocated for mental health concerns in the State. She urged the Committee to increase funding for mental health issues. MARTIN WHITE, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, MENTAL HEALTH CENTER, KODIAK, spoke against HB 441. FRANCIS CATER, (TESTIFIED VIA TELECONFERENCE), KODIAK ALLIANCE FOR MENTALLY ILLNESS, KODIAK, spoke in opposition to HB 441 urging that mental health be exempt from further cutting. GABRIELLA ARMSTRONG, (TESTIFIED VIA TELECONFERENCE), CLINICAL DIRECTOR, SEWARD LIFE ACTION COUNCIL, SEWARD, spoke in opposition to HB 441 noting that continual cutting will eliminate valuable mental health programs. TERRIE NASH, (TESTIFIED VIA TELECONFERENCE), RESIDENT, SEWARD, spoke in opposition to HB 441. W. HARRISON CHILDERS, (TESTIFIED VIA TELECONFERENCE), SUBSTANCE ABUSE COUNSELOR, CORRECTIONAL INSTITUTE AND SECURITY PRISON, SEWARD, stated that the proposed decreases to the budget will effect the quality of life, particularly, in Seward with less services being offered to inmates. This consequently will jeopardize the quality of life in the entire State. He spoke in opposition to HB 441. JOHN LOHSE, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, ALASKA VOCATIONAL CENTER, SEWARD, spoke in opposition to HB 441, adding that the impact of the legislation will detrimentally affect the quantity and quality of services provided throughout the State. KIM SORIANO, (TESTIFIED VIA TELECONFERENCE), FINANCIAL OFFICER, SEWARD LIFE ACTION COUNCIL, SEWARD, spoke against HB 441 and echoed concern with the statewide impact of the proposed cuts. 9 RICK TESSANDORF, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE DIRECTOR, ADVOCACY SERVICES, ANCHORAGE, spoke in opposition to HB 441 stating that non profit providers do not have the assets to off-set the proposed retroactive reductions. WES SKINNER, (TESTIFIED VIA TELECONFERENCE), ALASKA SPECIALIZED EDUCATION TRAINING SERVICES, ALASKA MENTAL HEALTH BOARD, ANCHORAGE, spoke in opposition to HB 441 and the effect the legislation would have on Alaskans. He urged the Committee to find cuts elsewhere in the budget, advising that Alaskans would rather see service-delivery for people who can not provide for themselves, than to be "fat cats with jobs in the high paid resource industries without services available". KEN TAYLOR, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE COMMUNITY MENTAL HEALTH CENTER, ANCHORAGE, spoke against HB 441 specifically addressing the retroactive cuts for service grants from the FY94 budget. (Tape Change, HFC 94-35, Side 1). YVONNE JACOBSON, (TESTIFIED VIA TELECONFERENCE), ALASKA ALL MENTAL HEALTH, ANCHORAGE, spoke in opposition to HB 441. WAYNE MCCOLLUM, (TESTIFIED VIA TELECONFERENCE), MENTAL HEALTH, TOK, spoke in opposition to HB 441. DIANA BRANDT, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE, spoke in opposition to HB 441. MARY JANE MICHAEL, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE, spoke in opposition to HB 441 and HB 455. She noted that the FY94 provider grants had been reduced by ten percent. Those funds were transferred to Medicaid. She noted that agencies had been promised by the federal government, that if the funds were not "recaptured", they would be returned in the fourth quarter. Concurrently, now health care providers are faced with a fourth quarter reduction of forty percent. Representative Hanley explained that $1.6 million dollars was placed into Project Choice last year in order to receive federal matching money. Project Choice did not get implemented as quickly as anticipated, consequently, people remained in community based services while the money had been transferred to the waiver program. The Subcommittee intends that $400 thousand dollars will be given to Project Choice. The remaining $1.2 million dollars will be placed into services. He added that this creates no net increase or decrease, only a change in allocations. 10 Ms. Michael responded that many small agencies will not be able to wait until the beginning of the new fiscal year as the funds were originally promised for the beginning of the fourth quarter (4/01/94). Representative Hanley agreed that the non profit organizations provide a great service for a cheap price. He added that community based services are cheaper than institutions. Representative Hanley pointed out that there are reserves to cover the gaps. Six percent of the unrestricted general funds are placed into mental health programs. Last year, $132 million dollars was spent on those programs. Representative Hanley continued that the six percent is equal to $100 million dollars which would result in an over expenditure of $32 million dollars. There currently is $140 million dollars remaining in the Mental Health Trust. He suggested that the mental health community prioritize within programs and recommended that those referenced by the teleconference participants be the ones maintained. Representative Hanley reminded all participants that there will be reductions with the current budget revenues. Representative Brown asked that information regarding budget "gaps" for FY94 and FY95 be made available to the Minority. BRENDA KNAPP, EXECUTIVE DIRECTOR, JUNEAU ALLIANCE FOR THE MENTALLY ILL (JAMI), JUNEAU, spoke in opposition to HB 441. She added, without the services and funding currently available, many of her clients would need to be hospitalized which would be much more costly to the State. She urged intent language be offered to assure that the budget cuts are equally distributed amongst all programs. ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT SYSTEM, provided the Committee with a handout addressing disposition cases throughout the State since July 1, 1993. [Attachment #1]. He explained that caseloads throughout Alaskan communities have risen as much as thirty percent. He pointed out that the Alaska Court System budget has only grown .3% since 1985. Mr. Snowden emphasized, that an additional $470 thousand dollar funding decrease would severely handicap the Court System. PETER BUSHRE, CHIEF FINANCIAL OFFICER, ALASKA PERMANENT FUND CORPORATION, DEPARTMENT OF REVENUE, spoke to the Alaska Permanent Fund's request for a supplemental appropriation. He explained that the Permanent Fund is currently worth $16 million dollars. The manager's fees and international custody fees have risen based on the value of the fund. Mr. 11 Bushre pointed out that the amount requested in HB 455 of $2,379.0 million dollars would be short $815,000 thousand dollars. He pointed out that the language in Section 12 refers only to "equity management fees" and should also include "custody fees". All expenses are paid from corporate receipts originating from the fund. NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, referenced the supplemental bill and the sectional analysis which would incorporate the changes recommended in the amendment submitted by the Governor. (Tape Change, HFC 94-35, Side 2). Co-Chair MacLean provided the Committee with capital appropriation budget information. Identification of unobligated general funds existing from past capital appropriations including all federal authorization has begun. She said repeals will not have an effect on capital dollars which have already been encumbered. There will be a "window of opportunity" allowing state agencies to encumber and expend balances until June 30, 1994. She added that to date, $80 million dollars has been identified as unobligated, unexpended general funds still on the books appropriated prior to July, 1990. This information will be provided to all House Finance Committee members. Ms. Slagle provided a sectional overview of HB 455, the Supplemental legislation. GOVERNOR'S OFFICE * Sec. 1 Office of Management and Budget - $1,621.4 million dollars This request would provide salary adjustments required to comply with the Fair Labor Standards Act. DEPARTMENT OF ADMINISTRATION * Sec. 2 Longevity Bonus Grants - $2,191.3 million dollars This request would provide funds to assist an increased number of recipients. SHARON BARTON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION, explained the initial budget was based on an estimate. Program changes this past year have created unpredictability in program behavior. The request reflects 12 participants over and above those anticipated when the budget was written. HB 441 and HB 455 were HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 3:30 P.M. 13
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