Legislature(2001 - 2002)
01/24/2001 03:20 PM House FIN
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HOUSE BILL NO. 45
"An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; 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."
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR reviewed the Governor's FY02
Operating Budget as contained in HB 45 and HB 46. She
observed that changes to the automative system have allowed
additional information to be presented to the public, via
the Internet. Information on the operating and capital
budgets can be found on the Office of Management and
Budget's web page http://www.gov.state.ak.us/omb/akomb.htm.
She reviewed information contained on the Internet. Budget
detail for the capital and operating budget is available.
The operating budget is reviewed by department summary,
budget request units and components. The capital budget can
be reviewed by program area, election district, community
and department. Performance measures are contained in each
department summary and as a separate item.
Ms. McConnell expressed hope that subcommittee discussions
would encompass recommendations of additional measures or
changes to existing measures by the Office of the Governor.
The intent is not to write performance measures for every
item, but to focus on the most critical items. There has
been progress in the move toward consensus between the
Legislature and Administration. Additional work is needed to
develop a common vocabulary. The Administration has plans to
revise the automative budget system to better address the
needs of the Legislature and the Administration.
Representative John Davies expressed appreciation for the
automative budget system.
Ms. McConnell discussed primary goals of the Governor's FY02
budget. She identified four focus areas: promotion of state
resources in order to develop areas that will create jobs,
education, protection for families and children, and the
maintenance of a responsible level of state services. She
maintained that there has been an erosion of services, which
has resulted in increased wait times for some state services
and poor performance in some measures.
Ms. McConnell highlighted areas contained in the FY02
budget. She noted that the $7.2 billion dollar FY02 budget
is approximately $300 million dollars above the FY01 level.
A third of the budget comes from the state's investments.
The majority of the state's investments are from the
Permanent Fund and are reinvested back into inflation
proofing and permanent fund dividends: $1.9 billion dollars
of the total $7.2 billion dollar budget. The state expects
to receive approximately $100 million dollars more federal
funds in FY02 then were received in FY01. There is a $145
million dollar general fund increase in FY02. She stressed
that the shift toward looking at the entire budget rather
than the general fund amount has been beneficial.
Ms. McConnell expressed confidence that the budget has
retained the same level of scrutiny given to previous
budgets. The Administration anticipates that oil prices will
not remain as high through FY02. The budget assumes a
deficit of $500 million dollars, which would be drawn from
the Constitutional Budget Reserve.
Ms. McConnell looked at specific areas. She noted that there
will be a supplemental request for the gas line. She
observed that transportation improvements in the capital
budget continue and acknowledged the difficulty of keeping
pace with maintenance costs. The Administration proposes to
reinvest welfare reforms savings to programs that assist
families to get off and stay off of welfare.
Ms. McConnell referred to education and early development
programs. There will be a substantial amount of federal
money for education and early development programs.
Recommendations will come from the Governor's Quality
Education Task Force for additional education resources. She
noted that the governor has requested $16.9 million dollars
for the University of Alaska.
Ms. McConnell discussed issues concerning public safety. She
observed that a pay increase is needed to encourage
longevity in village public safety officers. Work needs to
be done in programs addressing juvenile and adult defenders,
and child protection, child support enforcement and senior
services. She observed that there are also a number of
concerns in the area of emergency services.
Ms. McConnell noted that substantial work is proposed in the
area of alcohol. There is a package of proposals to address
rural and urban issues regarding alcohol.
Ms. McConnell noted that one area addressed early, is the
cost of maintaining existing services. She noted that $80
million dollars in general funds is needed to keep pace with
current service levels. There is a $28 million dollar
increase to pay debt service in FY02 due to new debt and the
exhaustion of debt retirement funds. Seven million dollars
for the public health laboratory and the Anchorage jail were
funded for part of FY01. There are statutory and contract
obligations that need to be continued including $15 million
dollars in services, which were funded from one-time
appropriations or the last year of multiple year federal
grants. Approximately $4 million dollars is needed to
address areas where the workload has outstripped the ability
to keep up with need. For example, miners at the annual
Fairbanks mining conference indicated that their ability to
create jobs was hampered by the state's inability to permit.
She concluded that the state of Alaska needs to continue to
pay its obligations.
HB 45 was heard and HELD in Committee for further
consideration during the meeting.
HOUSE BILL NO. 45
"An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; 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."
Representative Harris noted that there would be a $500
million dollar deficit if the Governor's proposal were
followed. He questioned if the Governor is prepared to lead
the way on revenue enhancements. Ms. McConnell responded
that discussions have occurred regarding a trigger that
would kick in when the Constitutional Budget Reserve reached
the $1 billion dollar level. She stressed that there needs
to be further discussions with the public. A combination of
measures would be more effective than one. She emphasized
that presenting a plan to the public will be difficult
without public discussions. The process will be as important
as what is developed in the end. Representative Harris
reiterated the need for a leader and questioned if the
Governor is willing to be the one. Ms. McConnell stressed
that discussions need to proceed before a specific
legislative plan can be developed.
Representative Hudson emphasized that there needs to be
legislation and funding to bring the issue to the public. He
stressed that the state is $500 million dollars in arrears
for the FY02 budget. He stressed the need to discuss
specifics. Ms. McConnell responded that the there needs to a
combination of tools and that the key words are "working
with".
Vice-Chair Bunde pointed out that there are bills in the
current Legislature that would develop revenue sources.
Co-Chair Williams commented that missions and measures help
legislators and the public to understand which services are
needed.
HB 45 was heard and HELD in Committee for further
consideration.
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