Legislature(2013 - 2014)HOUSE FINANCE 519
03/04/2013 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB65 || HB66 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 65 | TELECONFERENCED | |
| += | HB 66 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 65
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, amending
appropriations, and making reappropriations; and
providing for an effective date."
HOUSE BILL NO. 66
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:33:31 PM
Co-Chair Austerman discussed the schedule for the week. He
asked committee members to have operating budget amendments
to his office by 5:00 p.m. on Wednesday. He talked about
protocol for the current meeting.
1:34:35 PM
Co-Chair Stoltze MOVED to ADOPT the proposed committee
substitute for HB 65, Work Draft 28-GH1799\C (Bailey,
3/2/13). There being NO OBJECTION, it was so ordered.
PETE ECKLUND, STAFF, REPRESENTATIVE ALAN AUSTERMAN, read
from a statement:
This year the Governor submitted an FY14 operating
budget with modest growth over the current FY13
budget. Including the amendments submitted mid-
February, the General Fund growth in agency budgets
was just 1.3%. That is a significant downturn in
agency growth from the average of 6.5% over the last
ten years.
While that is encouraging and commendable, further
work to slow the growth of government remains. When
the legislature left last session, there was an
expectation that there would be an end-of-fiscal year
surplus of over $400 million dollars. When the
legislature convened in January, those projections had
changed. Now it is likely we will be using some level
of savings in FY13; perhaps hundreds of millions of
dollars.
The price per barrel to balance our budget has
increased from $64 in FY10 to $110 in FY13. Because
of declining production, if we have the same size
budget in FY14 as FY13, it would take $115 dollar oil
to balance our budget.
Since the price forecast for oil in FY14 is $109.61,
if our FY14 spending equaled FY13, we would run a
deficit of over $900 Million dollars.
In order to further lower the growth of government and
to preserve savings, subcommittees were asked to
review and develop their respective agency budgets
with an overall goal of no growth in agency
operations.
Mr. Co-Chair, you also directed the subcommittees to
review the agency budgets via a five-step process:
1. Review the agency Mission, Core Services, and
Performance Measures (with the thought that through
results based budgeting, agencies should be measuring
the effectiveness of programs in order to demonstrate
what value the public is receiving for our
investments)
2. Review budget changes since FY2005, the last year
of relatively flat budgets - this enables us to track
the GF and Total Funds changes over the ten-year
period via graphs (with extensive data reports also
available)
3. Review agency 10-year plans - this highlights the
future budget changes anticipated by the agency, for
instance, some agencies have shown their expectations
of federal funding reductions with an associated
backfill of general funds
1:38:20 PM
Mr. Ecklund continued to read from a statement:
4. Accountability check: Review audit findings made
by the Division of Legislative Audit - this highlights
areas where improvement was or is needed and the
agency's response to those findings
5. Get a status update on budget changes approved
for the current fiscal year: FY13 - this indicates the
agency's responsiveness to changes incorporated in the
current year budget; for example; are projects
started, are positions filled, are backlogs being
processed more quickly, etc.
Then, after looking at the agencies mission and
results, looking back, looking forward, and looking at
current year progress, subcommittees had a context in
which to review the budget requests for FY14.
I'd like to thank David Teal and the staff at
Legislative Finance as they were integral in preparing
the 2005 Look-back graphs and associated data, 10-year
plan graphs, and consolidating information on current
year progress for the subcommittees, along with
providing their normal budget support function for the
subcommittees. The Legislature is fortunate to have
such a talented group assisting with development of
the budget.
I'd also like to thank Karen Rehfeld and the staff of
the Office of Management and Budget, and the
leadership of the Executive Branch agencies for their
help in the budget review process.
Do we have more work to do on this process? The
answer is "yes." We still need to spend more time
with agency staff to ensure alignment of agencies
mission, core services, and performance measures and
to finalize efficiency and effectiveness performance
measures. The subcommittees had just 46 days to review
budgets prior to the March 1 subcommittee close-out
deadline. We plan to continue subcommittee work over
the interim, specifically with the Department of
Health and Social Services, and during the next
legislative session.
Mr. Co-Chair, you charged the Subcommittees with
reviewing their assigned agency budgets contained in
section 1 (the numbers section) of the operating
budget bill, HB 65, and in section 1 of the mental
health budget bill, HB 66.
Language section appropriations were not under the
purview of the subcommittees. Language section changes
will be explained by Joan next.
1:40:49 PM
Mr. Ecklund continued to read from a statement:
Subcommittees were also provided with the supplemental
budget requests submitted by the Governor on January
29 and were charged with reviewing their respective
agencies' non-language budget amendments submitted by
the Governor on February 12. As expected, many
supplemental requests were precursors to FY14 budget
amendments. We appreciate the efforts of OMB to
highlight those facts in both their supplemental
spreadsheet and their amendment spreadsheet.
Mr. Co-Chair, all of the subcommittee reports are
found on the Legislative Finance website. Reports on
these two committee substitute bills will also be
posted on the Legislative Finance website immediately
after this hearing.
And now to the numbers:
The operating budget Committee Substitute totals
$9.718 Billion (all funds), a reduction of $195.9
Million from the Governor's Amended budget (an overall
2.0% reduction).
Agency budgets have been reduced by $74.2 Million in
General Funds from the Governor's Amended budget and
$6.7 Million from FY13 Management Plan.
So Mr. Co-Chair, at this point we have met our goal
and are below current year GF spending in agency
operations.
Combined agency operations and the statewide item
General funds equal $6.403 Billion, for a GF reduction
of $203.2 Million ($125 Million is related to the
AIDEA sustainable energy and transmission development
fund and will be addressed in a fiscal note)
Other Funds increased $769,000 for a total of $1.281
Billion, and Federal Receipts increased by $6.5
million to $2.033 Billion
Although there are general fund reductions from the
Governor's amended budget and from Management plan,
there are $108.6 Million of GF increases from adjusted
base.
The legislature begins its budget analysis from
adjusted base and builds the budget from there.
Increases from adjusted base have been made in most
agencies, although not as much as the Governor
proposed.
1:43:29 PM
JOAN BROWN, STAFF, REPRESENTATIVE ALAN AUSTERMAN, read from
a statement:
Mr. Co-Chair, section 1 of HB 65, the numbers section
of the bill, is the compilation of the department
budget recommendations adopted by the House Finance
budget subcommittees, with one exception. In the
Department of Corrections, after consultation with the
Subcommittee Chair, we included a fund source change
of $674,400 from unrestricted general funds to
designated general funds in the Inmate Health Care
appropriation, Physical Health Care allocation, to
correspond with a change we made in the language
section, which I will describe later.
Mr. Co-Chair, now I'll go through the language
sections and indicate whether or not we made any
changes and if so, what those changes are. Starting
on page 55 of the bill:
We made no changes to:
Section 4, Legislative Intent
Section 5, Costs of Job Reclassifications
Section 6, Personal Services Transfers or to
Section 7, Alaska Aerospace Corporation
Page 55 Section 8, ALASKA HOUSING FINANCE CORPORATION
Mr. Co-Chair, in subsection (a) we replaced the phrase
"adjusted net income" with the phrase "change in net
assets" to conform with AHFC's statutes;
In subsection (b) we made changed the lead-in wording
to reflect the fact that AHFC will be retaining the
entire $10.6 Million dollar dividend in order to pay
debt service;
In subsection (c) we changed the location of where any
excess AHFC Dividend funds would be deposited from the
Budget Reserve Fund as the Governor proposed to the
Alaska Capital Income Fund. This recognizes the
legislature's "tradition" of using corporate dividends
for capital projects. However, no "excess" dividend
funds are anticipated.
Page 56 Section 9, ALASKA PERMANENT FUND CORPORATION
Mr. Co-Chair, we accepted the Governor's amendments
correcting the amounts in subsection (a) from $943
Million dollars to $958 Million for the dividend fund
and in subsection (b) from $958 Million to $939
Million dollars for inflation proofing.
Page 57 Section 10, ALASKA INDUSTRIAL DEVELOPMENT AND
EXPORT AUTHORITY
Mr. Co-Chair, just as we did in the Alaska Housing
Finance Corporation section, we revised subsection (b)
so if there should be any excess AIDEA Dividend funds,
they will be deposited into the Alaska Capital Income
Fund, instead of the budget reserve fund as originally
proposed. Again, no "excess" dividend funds are
anticipated.
Page 57 Section 11, DEPARTMENT OF ADMINISTRATION
We made no change.
Pages 57 - 59 Section 12, DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT
In subsection (d) we added the estimated amount of
$10.1 Million dollars to the salmon enhancement tax
revenue appropriation for informational purposes
In subsection (e) we also added the estimated amount
of $1.9 Million dollars to the seafood development tax
appropriation
In subsection (h) paragraph (1) we made a minor
$13,300 dollar correction to the Alaska Seafood
Marketing Institute's program receipt carry forward
projection from $15,562,600 dollars to $15,549,300
dollars
We deleted subsection (j), the $500,000 dollar general
fund appropriation to Commerce for payment to the
Department of Administration for the Alaska Land
Mobile Radio system costs on behalf of political
subdivisions.
1:47:27 PM
Ms. Brown continued to read from a statement:
Pages 59 - 60 Section 13, DEPARTMENT OF CORRECTIONS
This is a new language section. In section 1, the
subcommittee reduced $2 Million dollars of General
Funds due to the expectation that the department will
receive $2 Million dollars more in Federal Receipts
than had originally been budgeted. Over the period
FY11 through FY13, the department has annually
collected on average nearly $1.9 Million more in
Federal Receipts. That amount was rounded up to $2
Million and added to the department's budget in
section 1.
In order to ensure that Corrections is not underfunded
if the Federal Funds are not received, we added this
backstop language to the effect that any reduction in
the collection of the appropriated Federal Funds will
be replaced by General Funds.
Page 60 Section 14, DEPARTMENT OF EDUCATION AND EARLY
DEVELOPMENT
We made no change.
Page 60 Section 15, DEPARTMENT OF FISH AND GAME
We just added the $700,000 dollar estimate of the dive
fishery management assessment.
We deleted what had been Section 15 in the original
bill, for the DEPARTMENT OF HEALTH AND SOCIAL
SERVICES. The section had provided backstop general
funds if the amounts appropriated in section 1 were
insufficient to pay energy assistance benefits to all
qualified applicants.
Pages 60 - 61 Section 16, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT
We made no change.
Page 61 Section 17, DEPARTMENT OF MILITARY AND
VETERANS AFFAIRS
We made no change.
Pages 61 - 62 Section 18, DEPARTMENT OF NATURAL
RESOURCES
In subsection (b) we just corrected the estimated
amount from $75,000 dollars to $50,000
In subsection (c) we also corrected the estimated
amount from $25,000 to $50,000 dollars
Page 62 Section 19, DEPARTMENT OF REVENUE
We made no change.
Pages 62 - 64 Section 20, OFFICE OF THE GOVERNOR
We did not include the Governor's budget amendment of
$1,750,000 dollars for costs associated with the
redistricting board. The Co-Chair intends to
consolidate this item with the FY13 supplemental
request for an overall supplemental appropriation of
$2 Million dollars of general funds to the
redistricting board for the fiscal years FY13 through
FY15.
Page 64 Section 21, UNIVERSITY OF ALASKA and Section
22, BANKCARD SERVICES
We made no changes.
Pages 65 - 69 Section 23, DEBT AND OTHER OBLIGATIONS.
We made five changes in this section:
First, on page 68, we added the appropriation in
subsection (h) paragraph (8) which uses the $1,040,000
dollar balance of the debt retirement fund to help pay
debt service on the general obligation bonds, series
2010A and B.
Second, we then reworded subsection (h) paragraph (9)
to incorporate a reference to our new subsection (h)
paragraph (8) and to reduce the estimated amount of
general funds from $3.7 Million to $2.7 Million
dollars.
Third, in subsection (h) paragraph (10) we accepted
the Governor's amendment to reduce the estimated
general fund amount from $35 Million to $17.7 Million
dollars for debt service on four general obligation
bonds series: 2013A, B, C, and D.
1:50:47 PM
Ms. Brown continued to read from a statement:
Fourth, we deleted subsection (h) paragraph (13) that
had appropriated an estimate of $300,000 dollars of
general funds to pay remarketing costs if the state
issued general obligation bonds with a variable
interest rate. The Co-Chair does not believe the
issuance of variable rate bonds is prudent and so
removed this appropriation.
And, finally, in subsection (m) the word "airport" was
made plural and a statutory reference corrected.
Pages 69 - 70 Section 24, FEDERAL AND OTHER PROGRAM
RECEIPTS
We made no change.
Pages 70 - 71 Section 25, FUND CAPITALIZATION
In subsection (b), we reduced the capitalization of
the Crime Victim Compensation Fund by $674,400 dollars
to maintain the 90% -- 10% funding ratio between the
Department of Corrections and the Crime Victim
Compensation Fund in the use of the PFD Criminal
funds.
As I mentioned earlier, in Section 1, the numbers
section, of HB 65, we made a corresponding change to
the Department of Corrections budget in the Physical
Health Care allocation, by reducing general funds
$674,400 dollars and increasing the PFD Criminal Funds
by the same amount.
In subsection (h) we deleted the $2M dollar General
Fund appropriation for the Trauma Care Fund.
Appropriations to this fund are discretionary. The
legislature capitalized the fund with $2.5 million in
FY11 when it was created, did not add any money in
FY12, and appropriated $2 million dollars in FY13.
Pages 71 - 74 Section 26, FUND TRANSFERS. We only
made a few changes in this section:
In subsection (f) on page 72, we reduced the estimated
amount of the bulk fuel revolving loan fund fees from
$70,000 dollars down to $45,000, the actual fees
collected in FY13 prior to the termination of the fees
on January 1, 2013.
In subsection (h) paragraph (2) on page 73, we also
reduced the estimate of the one cent per barrel
surcharge down from $1.9 Million to $1.1 Million as
the surcharge was suspended January 1, 2013, because
the balance of the Oil and Hazardous Substance Release
Response Account had reached its ceiling of $50
Million.
In subsection (n), the statutory reference for the
regional educational attendance area school fund was
corrected.
We did not include the Governor's request for a $125
Million dollar general fund deposit into the Alaska
Industrial Development and Export Authority's
sustainable energy transmission and supply development
fund. Instead this amount should be added to AIDEA's
fiscal note to HB 74, their Liquefied Natural Gas
legislation.
Page 74 Section 27, RETIREMENT SYSTEM FUNDING
We made no change.
Pages 74 - 76 Section 28, SALARY AND BENEFIT
ADJUSTMENTS
In subsection (a) we deleted the word "ongoing" as it
is not needed, in paragraph (6) we changed the word
"union" to "unit" and added a new bargaining unit
agreement as paragraph (8) for the Alaska Correctional
Officers Association. This was a Governor's budget
amendment and the funding ($5,671,000) is included in
section 1.
In subsections (c) and (d) the phrase "appropriations
made by this Act" was corrected to read
"appropriations made in this Act".
1:54:48 PM
Ms. Brown continued to read from a statement:
Page 76 Section 29, SHARED TAXES AND FEES
The only change we made was to add a column in
subsection (a) to reflect the estimated amounts of the
six listed taxes for informational purposes.
Pages 76 - 77 Section 30, AMERICAN RECOVERY AND
REINVESTMENT ACT OF 2009 and Section 31, RATIFICATIONS
OF SMALL AMOUNTS IN STATE ACCOUNTING SYSTEM
We made no changes to these sections
Page 77 Section 32, BUDGET RESERVE FUND
We made no change
Page 7 Section 33, LAPSE OF APPROPRIATIONS
The only change we made was to update section number
references.
Page 77 Section 34, RETROACTIVITY
We made no change.
Page 77 Section 35
We added this new effective date section applicable to
Section 30, American Recovery and Reinvestment Act of
2 thousand 9 and Section 34, the Retroactivity section
as both take effect on June 30, 2013.
Page 77 Section 36
We made no change.
Page 77 Section 37
We made no change other than to update section number
references; the bill is effective July 1, 2013.
Representative Gara looked at agency summary general funds
and asked for further detail on the document. He asked how
the subcommittee operating budget number of $9.718 billion
had been compiled; he wondered if federal funds were
included in the number.
Mr. Ecklund replied that four reports labeled A through D
were included in members' packets (copy on file). Report A
pertained to the numbers section of the bill and was
limited to general funds. Report B included the numbers and
language sections of the bill related to general funds.
Report C referred to the numbers section for all funds.
Report D pertained to the numbers and language sections for
all funds. He pointed to statewide total of $9.718 billion
(Report D, page 7, House subcommittee column), which
included all funds.
1:58:08 PM
Representative Gara asked for verification that the figure
represented a 2 percent reduction from the governor's
budget proposal and a $200 million increase from the prior
year's adjusted base.
Mr. Ecklund responded that the report pertained to numbers
and language for all funds and pointed to the column titled
"Adj Base to Hse Subco"; the first total in the column
showed that the budget was $158,255,200 over the numbers
and language. He pointed to the last column showing a total
of $67,959,200 less than the governor's amended budget
proposal (in all funds). When factoring in statewide items
including debt service, fund capitalization, direct
appropriations to retirement, and special appropriations
the budget (for all funds, numbers and language) was
$193,000,000 above the adjusted base and $195,000,000 below
the governor's amended budget proposal.
Representative Wilson asked about a budget item that had
been removed and put into HB 74. Ms. Brown answered that
the item was a budget amendment that had been on the
administration's fiscal summary totaling $125,000,000, but
it had not been included in the language of the bill. A
budget amendment had been submitted that the House Finance
Committee did not adopt.
2:00:40 PM
Co-Chair Stoltze MOVED to ADOPT the proposed committee
substitute for HB 66, Work Draft 28-GH1797\C (Baily,
3/2/13). There being NO OBJECTION, it was so ordered.
Ms. Brown read from a statement:
Mr. Co-Chair, now I'll describe the changes we made in
the Mental Health bill, HB 66. Before I get to the
language, I need to mention the change made on Page 11
in Section 4, CAPITAL PROJECTS.
We removed one of the seven mental health capital
projects from the bill: it was the Health and Social
Services project for MH Deferred Maintenance and
Accessibility Improvements for $1 million dollars
General Fund/Mental Health. In its version of the
Mental Health bill, the other body will likely add
back that project and remove the six capital projects
we included, thus making the all of the mental health
capital projects subject to Conference Committee.
Co-Chair Stoltze relayed that creating a conference
committee on the budget was a common procedural practice.
He noted that the committee was respectful of the budget
put forth by the Alaska Mental Health Trust Authority
(AMHTA). He furthered that the practice did not represent a
deliberate effort to excise a project from the budget.
Ms. Brown resumed reading from a statement:
Mr. Co-Chair, the language sections begin on Page 14
Section 6, PURPOSE and Section 7, NONGENERAL FUND
RECEIPTS.
We made no changes.
Pages 14 - 15 Section 8, SALARY AND BENEFIT
ADJUSTMENTS. In subsection (a), as we did in HB 65,
we added a new bargaining unit agreement as paragraph
(8) for the Alaska Correctional Officers Association.
We also made the same corrections in subsections ( c)
and (d): the phrase "appropriations made by this Act"
was changed to read "appropriations made in this Act".
Page 16 Section 11
We added a new effective date section for the
reappropriation in section 9, making it effective June
30, 2013.
Page 16 Section 12
We changed the wording to reflect the addition of
section 11. This bill is also effective July 1, 2013.
2:03:33 PM
Co-Chair Austerman announced that the committee would hear
reports from subcommittee chairs.
Representative Holmes reviewed the budget highlights for
the Department of Administration (DOA). The budget totaled
$334,745,400 including $84,609,200 unrestricted general
funds (UGF), $24,285,900 designated general funds (DGF),
$222,056,600 in other funds, and $3,793,700 in federal
funds. The total amount represented a decrease from the
governor's amended FY 14 request of $1,839,300 in general
funds (GF); and an increase from the FY 14 adjusted base of
$1,486,100 UGF and $312,500 DGF, and a decrease of
$1,200,000 in federal funds. The budget would also add
three temporary positions.
Representative Holmes communicated that items accepted from
the governor's proposed budget were a centralized
administrative core services increase in the amount of
$725,400; retirement and benefits through Administrative
Services for consolidation and atomization of processes in
the amount of $323,900 from the group benefits fund,
$380,700 from the Public Employees' Retirement System
(PERS) trust fund, $153,900 from Teachers' Retirement
System (TRS), $3,900 from the Judicial Retirement System
(JRS) fund, and $12,600 from the National Guard and Naval
Militia Retirement System (NGNMRS) fund; approximately
$1,500,000 from the Group Health and Life Benefits fund for
a new third-party administrator for the AlaskaCare system;
$465,900 in interagency receipts and $197,700 from the
public building fund to cover costs for space and services
provided to user agencies; $1,200,000 from the information
services fund and a decrease of $1,700,000 in federal
receipts for Enterprise Technology Services (ETS) in order
to eliminate uncollectable federal receipt authority and to
add additional receipt authority from other departments.
Representative Holmes continued to discuss the DOA budget.
She relayed that $4,224,200 in interagency receipts had
been authorized for Risk Management due to escalating costs
of property insurance premiums, medical costs for Workers'
Compensation, and litigation costs; the increment would
allow the agency to cover costs without taking money from
the catastrophe fund.
2:07:50 PM
Representative Holmes communicated that an ETS increment
totaling $1,500,000 UGF had been restored for the Alaska
Land Mobile Radio (ALMR) program to pay for the 41 sites
the state had taken over from the federal government;
$500,000 of a $1,600,000 request for additional ALMR
funding had been shifted to federal receipts from statutory
designated program receipts, $500,000 in interagency
receipts from the Department of Commerce, Community and
Economic Development (DCCED) had been denied, and $600,000
UGF had been denied.
Representative Holmes relayed all three of the governor's
amendments had been accepted. The first related to
centralized Administrative Services retirement and benefits
(as a result of the federal Patient Protection Affordable
Care Act there was a progressive fee on self-insured plans
to fund a research institute trust fund) in the amount of
$35,300 from the group benefit trust fund, $21,700 from the
PERS trust fund, and $8,000 from the TRS trust fund. An
increase had been added in the amount of $93,300 from the
group benefit fund, $57,300 from the PERS trust fund, and
$21,000 from the TRS trust fund to handle workload and
management of the AlaskaCare plans. The third amendment
added $187,500 in GF program receipts related to the
centralization of drivers' licenses and identification
cards.
2:10:45 PM
Representative Holmes communicated that a reduction of
$250,000 GF had been made for centralized administrative
services DOA leases. She explained that the fund held money
for a portion of the department's lease payments; $250,000
GF had been taken from DOA state facilities rent, which
held the funding to pay costs associated with state owned
facilities; $204,300 GF had been eliminated from ETS
related to the agency's chargebacks; $4,400 GF had been
eliminated from risk management; $7,300 GF for the Alaska
Oil and Gas Conservation Commission had been eliminated
(the program would be supported entirely by receipts);
$23,300 GF had been eliminated from the Division of Motor
Vehicles (DMV).
2:12:49 PM
Vice-Chair Neuman asked whether DMV collected more money in
license and registration fees than was currently needed for
agency operations.
Representative Holmes affirmed that DMV returned above the
amount it needed to operate and stated that the agency was
funded entirely by money it generated.
Co-Chair Austerman reminded the public that the
subcommittee reports were posted on the Legislative Finance
Division (LFD) website.
2:13:45 PM
Representative Costello addressed the recommendations from
the DCCED budget subcommittee. She communicated that the
proposed budget totaled $129,549,100 including $31,161,400
UGF, $41,503,000 DGF, $39,831,000 in other funds, and
$17,043,700 in federal funds; the total represented a
reduction in GF from the governor's request of $1,375,000
and the governor's recommended GF increase from the
adjusted base of $15,417,200, the majority of which was
tourism marketing funding. Requests accepted by the
committee included $2,700,000 in statutorily designated
receipts to restore tourism marketing related third-party
receipts. She detailed that two accepted requests would
appear as a decrement in the Division of Administrative
Services including an Alcohol Beverage Control (ABC) Board
increment of $127,000 general program receipt for
administrative support costs and $62,500 in GF program
receipts to maintain Department of Law (DOL) legal
assistance. The total of $189,500 was decremented from the
Division Administrative Services because the subcommittee
believed the department should have the ability to accept
the increased cost resulting from the ABC Board transfer
from the Department of Public Safety (DPS) to DCCED.
Representative Costello relayed that the subcommittee had
accepted the Alaska Industrial Development and Export
Authority (AIDEA) Sustainable Energy Transmission and
Supply (SETS) development in the amount of $200,000 in
receipt authority. A $500,000 receipt authority for AIDEA
had been accepted related to funding for consultants and
legal counsel to plan and develop infrastructure projects.
Several modifications to the governor's budget request had
been made including a reduction of $1,000,000 for tourism
marketing funding and an accepted amount of $15,000,000
UGF.
2:16:40 PM
Representative Costello shared that the committee had
denied a $100,000 request from the ABC Board to replace
interagency receipts with GF program receipts to maintain
the underage drinking enforcement program. She elaborated
that the item represented a loss of federal funds and the
committee had questioned whether it represented a core
service of state government. The committee restored the
Alaska Seafood Marketing Institute (ASMI) funding to the FY
13 level of $4,500,000 in federal receipt authority and
$12,560,800 in GF program receipt authority; a decrement of
$1 million was also recommended to a $7,770,100 UGF
increment in the language section. Additionally, the
committee recommended a 10 percent reduction to the Alaska
Regional Development Organizations (ARDORs) for a total of
$85,500 UGF. She restated an earlier comment that a
decrement was taken from Administrative Services to offset
an ABC Board request for $189,500 UGF.
Representative Costello communicated that after a
presentation by the Division of Business, Corporations and
Professional Licensing the subcommittee was recommending
that a report should be submitted to the legislature by
October 1, 2013 showing a six-year look-back of the
division. The goal was to provide more transparency into
the division. The report should be provided in a template
created by LFD that would include information about various
items such as revenues from license fees and other sources,
expenditures by line item, departmental and other cost
allocation plans, the number of licenses, and carry-forward
balances.
2:19:25 PM
Representative Gara asked for verification that ASMI
funding would be reduced from the prior year's funding of
$16 million down to $15 million. He asked if there was no
longer a match requirement for the tourism industry.
Representative Costello replied that the $2.7 million
receipt authority was the tourism industry match. She
explained that the $2.7 million would be added to the $15
million increment for a total of $17.7 million to fund the
marketing program as a whole.
Representative Gara asked whether the $2.7 million receipt
authority was actual funds or in-kind (where the industry
took out its own advertisements in publications).
Representative Costello answered that the industry paid for
advertisement placements; the department would accept the
$2.7 million. Representative Gara asked for verification
that the funding mechanism counted. Representative Costello
answered in the affirmative.
2:20:49 PM
Representative Edgmon addressed the Department of
Corrections (DOC) budget. He shared that the budget was
largely comprised of GF money; the one change the
subcommittee had recommended was a GF switch of $2 million
UGF to expected receipts and federal receipts that had been
covered in Section 13 of HB 65. The subcommittee
recommended a total budget of $332,760,000 including
$296,000,000 UGF, $16 million DGF, $14,500,000 in other
funds, and $5,300,000 in federal funds. The total was
$9,800,000 in all funds above the adjusted base; $7,700,000
GF of the total represented a GF increase of 2.5 percent.
He noted that there was no change in position counts. The
subcommittee recommendation would reduce UGF by $2 million.
The only change from the governor's proposed amended budget
was to switch a $2 million increment from GF to federal
receipts (the department had collected federal receipts in
the past several years and had over collected in the
process). He pointed out intent language associated with
the item:
It is the intent of the legislature that the
Department of Corrections work with the Department of
Health and Social Services and interested local
parties to explore options that would address the
critical need for upgrades to the water supply system
at the Yukon-Kuskokwim Correctional Center.
Vice-Chair Neuman wondered whether the Goose Creek
Correctional Center would be fully funded. Representative
Edgmon replied that the subcommittee had not taken any
action on Goose Creek.
2:23:56 PM
Representative Wilson addressed the Department of Education
and Early Development (DEED) budget. The subcommittee
recommended a total budget of $348,232,700 including
$64,119,400 UGF, $24,308,800 DGF, $26,006,500 in other
funds, and $233,798,000 in federal funds. The committee had
approved a $158,400 core service rate increase request,
over $2,600,000 of the $5,900,000 request for digitization,
and $250,000 of a $500,000 request for assessment contract
costs. She explained that the $250,000 that had not been
approved for contract assessment costs was federal funds
that may not occur due to the federal sequestration. The
subcommittee approved a $320,000 request for a K-3rd grade
literacy project and $305,000 for a new dormitory
management contract at Mt. Edgecumbe. A $100,000 GF request
for rural transition services had been denied (she noted
the amount had been additional). The committee also denied
an $800,000 UGF request for Jobs for America's Graduates
and $480,000 for a Pre-K grant program. Funding had been
reduced for Best Beginnings by $137,500 (the program
continued to be funded at $800,000), and Parents as
Teachers by $242,500 (the program continued to be funded at
$800,000). She furthered that one position had been removed
in the amount of $119,500. Unallocated UGF reductions of
$250,000 had been made to the department and of $50,000 to
Teaching and Learning Support. She relayed that over $3
million out of a $9 million request had been approved [for
the Teaching and Learning Support allocation]. She noted
that Pre-K and Head Start programs would receive over $30
million in federal funds. She furthered that Pre-K was in
public schools and had $12 million in the Department of
Health and Social Services (DHSS). She relayed that the
subcommittee would look at the programs during the interim
to identify any inefficiencies.
2:26:25 PM
Representative Gara asked if the $480,000 denied for Pre-K
grants was an increment and not a reduction from the prior
year's budget.
Representative Wilson replied that the request was a one-
time increment of $480,000 that would bring the program
back to $2 million in grants.
Representative Gara pointed to decrements of $137,500 from
Best Beginnings, $242,500 from Parents as Teachers, and
$119,500 for an early childhood education coordinator. He
asked if the decrements were subtractions from the prior
year's budget.
Representative Wilson replied in the affirmative. She
elaborated that the education coordinator position had been
included in an initial $4 million request from Parents as
Teachers, over $2 million of which had been denied by the
governor. She stated that there continued to be a
significant amount of money going into the programs. The
subcommittee would look at the programs more over the
interim to ensure funds were utilized effectively.
Representative Munoz thanked LFD, her staff, and the
department for their work on the budgets. She addressed the
Department of Environmental Conservation (DEC) budget. The
subcommittee recommended a total budget of $84,817,600
including $21,784,500 UGF, $26,895,200 DGF, $11,199,200 in
other funds, and $24,938,700 in federal funds. There were
552 full-time positions and 7 part-time positions. She
relayed that the subcommittee accepted $175,000 UGF, which
represented half of an increment request for an
environmental health drinking water allocation; the funding
would allow the agency to implement two new drinking water
rules under the federal Safe Drinking Water Act. The budget
also included $271,500 ($7,000 DGF), which was half of an
increment related to water quality to help the agency under
the Alaska Pollutant Discharge Elimination System to assume
responsibility for oil and gas wastewater discharge
permitting from the U.S. Environmental Protection Agency.
The total approved increase was $453,500, representing half
of the governor's proposed $907,000 increase.
Representative Munoz discussed three issues that were
highlighted in the budget process including tsunami
response, the Oil and Hazardous Substance Release
Prevention and Response Fund, and cruise ship discharge
reporting requirements. She relayed there had been
considerable discussion on debris cleanup efforts related
to the [2011 Japanese] tsunami. She furthered that DEC had
commissioned an aerial survey of the Alaska coastline in
2012, which had identified seven collector beaches
statewide with serious impacts of tsunami debris from
Japan. The subcommittee supported the governor's amendment
to the supplemental budget for $1 million in receipt
authority from the Japanese government; however, it
believed the funding would not adequately address the
problem. She encouraged the committee to support the
governor's receipt authority recommendation and to match
the funds with a capital budget GF increment.
2:32:08 PM
Representative Munoz stated the second concern related to
the Oil and Hazardous Substance Release Prevention and
Response Fund. The fund was anticipated to be in deficit by
FY 15 and would require approximately $5 [million] in
additional funding to enable the current level of service
to continue. The subcommittee recommended that the House
Finance Committee include intent language encouraging the
Office of Management and Budget to provide recommendations
to the legislature on statutory changes that would result
in the fund's solvency. The third area of discussion
related to cruise ship discharge reporting; the
subcommittee felt that it was important to direct DEC to
make current information available on its website to the
extent possible regarding cruise ship mixing zones and
discharge locations in Southeast.
2:33:48 PM
Co-Chair Stoltze gave a review of the subcommittee
recommendations for the Department of Fish and Game (DFG).
He communicated his intent to work with Co-Chair Austerman
and others on issues related to DFG management. He noted
that the length of session stopped him from proceeding with
ideas that would lead to a more constitutional
administration of following sustainability mandates
(especially for fisheries resources). He commented on
decreased federal funds and referred to a legislative
briefing from Alaska's U.S. Senator Mark Begich that deeper
reductions were expected. He stated that the subcommittee
had taken a cautious approach towards the replacement of
federal funds with general funds. He believed more caution
would need to be exercised in the future.
Co-Chair Stoltze relayed that the subcommittee had
increased the DFG budget by $2.327 million from the prior
year and had denied increases of $1.716 million. He
continued that a $300,000 DGF test fisheries receipt
authority request had been accepted for Bering Sea Aleutian
crab fisheries. The budget also included $175,000 UGF for a
Tanana sonar project, $155,000 UGF to fund part-time
positions for the Susitna drainage sockeye project (the
project had previously been operated by the Cook Inlet
Aquaculture Association), $437,000 for core service costs,
and $185,000 for monitoring compliance related to the
former coastal zone management program. He discussed that
salmon assessments for the Karluk, Chignik, Nelson, and
Bear Rivers had been slightly reduced.
2:38:08 PM
Co-Chair Stoltze communicated that DFG was looking at an
issue where the subcommittee may not have maximized
matching of the Pittman-Robertson Act funds [also known as
the Federal Aid in Wildlife Restoration Act]; the total was
$2.5 million. He believed the subcommittee had made the
correct decision, but noted that perhaps further
information would reveal something different. The
subcommittee denied a request of $550,000 for a Sockeye
salmon identification program and biometrician on Chinook
issues (predominately in Southeast); the subcommittee
deferred the issue to the overall Chinook assessment issue
throughout the state through the capital budget. A $130,000
request for the North Slope bear removal/Muskox enhancement
program had been denied, $140,000 had been denied for a
replacement of DFG funds with GF. Additionally, there was
an agency-wide unallocated reduction of 5 percent totaling
$316,500 that would be absorbed in travel and other
internal actions. He communicated that the governor had not
proposed any amendments to his original budget.
2:40:31 PM
Vice-Chair Neuman pointed to the extensive work that had
been done on the DHSS budget. The subcommittee recommended
a total budget of $2,641,783,300 including $1,228,636,800
billion UGF, $71,751,600 DGF, $94,537,200 in other funds,
and $1,246,828,200 in federal funds. The subcommittee
recommended authorizing $1,304,018,400 GF for 3,679 total
positions including 3,502 full-time, 64 part-time, and 113
temporary positions, which was equal to the governor's
amended FY 14 budget. He remarked that the committee had
worked to stay out of core service areas. The subcommittee
recommended a total increase of $15,310,600 UGF and a
decrease of $2,368,800 DGF for a total GF change of
$12,941,800.
Vice-Chair Neuman stated that the change from the adjusted
base totaled $30,035,200 including a decrease of $918,050
in other funds and $18,011,900 in federal funds. He relayed
that 80 increments had been submitted to the subcommittee;
7 of the 80 increments had been denied. He detailed that
the 7 increments totaled $5,129,000 ($4,279,000 UGF,
$850,000 GF mental health) and included 2 from Behavioral
Health, 2 from Children's Services, 1 from Juvenile
Justice, 1 from Public Assistance, and 1 from Senior and
Disability Services.
2:44:19 PM
Vice-Chair Neuman pointed to budget analysis sheets (page
7, lines 103 through 104), which showed unallocated
reductions totaling $16,737,060 UGF. He spoke to a
Behavioral Health reduction of $8,368,800 UGF in Medicaid
services and explained that the item had been placed in the
budget in FY 13 for DHSS to look at self-applying the item.
He elaborated that DHSS took a $25 million decrease in
Medicaid services in the governor's FY 14 supplemental
budget; the $8,368,800 represented less than half of the
governor's proposed reduction.
Vice-Chair Neuman spoke to recommended modifications to the
governor's request including $75,000 for the Bureau of
Vital Statistics to replace lost revenue from issuing
paperwork related to deceased veterans. He pointed to the
budget analysis sheets (page 6, lines 91 through 94) that
illustrated tobacco education and cessation funding
decrements; in order to provide a more sustainable fund
balance, the subcommittee removed $2,237,400 of the
governor's $10 million request including $279,400 in
chronic disease prevention and health promotion, $1,746,400
from the Tobacco Prevention Council, and $191,700 in
Medicaid services.
Vice-Chair Neuman relayed that a cap had been placed on
grantees' administrative costs; the subcommittee added
language "all Department of Health and Social Services
grantees may spend for administrative costs no more than 15
percent of the grant award." He explained the goal was to
have grant money reach recipients as much as possible; the
subcommittee had worked to equally distribute cuts. He
observed that the state was looking at a budget shortfall
in excess of $920 million. The budget structure change had
created a new performance bonuses allocation in the
departmental support services appropriation and $3.993
million in unrestricted federal receipts had been
appropriated for the Children's Health Insurance
Reauthorization program.
Vice-Chair Neuman communicated that the subcommittee had
funded all nine of the governor's budget amendments in
full. Additionally, the subcommittee recommended the
removal of open-ended language for the energy assistance
program. He pointed to additional reports included in
members' packets (copy on file).
2:49:00 PM
Representative Gara pointed to an $8 million cut to
substance abuse treatment that would be covered in FY 14 by
one-time funding. He asked for verification that the $8
million would not reoccur in the following year.
Vice-Chair Neuman replied in the affirmative.
Representative Wilson addressed the Department of Labor and
Workforce Development (DLWD) subcommittee recommendations.
The subcommittee recommended a total budget of $189,425,800
including $34,570,800 UGF, $33,696,400 DGF, $22,879,800 in
other funds, and $98,778,800 in federal funds. There were
928 positions within the department. She relayed that the
department had come to the subcommittee with a significant
increase in lease costs; therefore, out of a $984,500
increase the subcommittee had approved $492,200. A request
of $100,000 for the expansion of independent living grants
had been denied, given a $200,000 increase the previous
year. A $200,000 UGF request for the Alaska Vocational
Technical Center (AVTEC) had been denied; the request
represented an increase and the subcommittee requested that
the center to generate the money through tuition increases.
Funding had been reduced by $500,000 for the Statewide
Training and Employment Program (STEP) funding in the
business partnerships business component; DWLD was
currently spending more STEP funding than it was bringing
in. Over $7.8 million in STEP funding was remaining in
business services.
2:51:10 PM
Representative Holmes discussed the Department of Law (DOL)
budget. The subcommittee recommended a total budget of
$92,358,300 including $59,306,500 UGF, $2,698,700 DGF,
$28,332,700 in other funds, and $1,966,400 in federal
funds. The total represented a decrease $3,755,000 GF and
$100,000 in other funds from the governor's FY 14 request;
however, it represented an increase from the FY 14 adjusted
base in the amount of $3,867,600 UGF, $772,800 in other
funds, and in two new full-time positions. The subcommittee
recommended replacing $250,000 in uncollectable interagency
receipts with $250,000 UGF to fund a new attorney in the
first judicial district (Juneau had not seen a new position
in many decades).
Representative Holmes relayed that the subcommittee had
approved $140,000 in the Criminal Division for the fourth
judicial district to hire a victim witness paralegal in
Bethel given high caseloads. Additionally, $140,000 UGF had
been approved for the hire of a child protection paralegal
in Fairbanks; the office had been pulling paralegal
resources from other jurisdictions and using attorney time
to make up caseloads. An $80,000 one-time increment had
been approved for the Criminal Justice Litigation Division
in order to implement a victim information and notification
system, which would provide automatic notification for
victims of changes in trial schedules and other; the system
should provide better services to victims and witnesses and
free up paralegal time. She communicated that $100,000 in
statutory designated program receipts out of a $200,000
request for the Commercial and Fair Businesses Section of
the Criminal Division had been approved to hire outside
investigative services for consumer protection; the one-
time funding was derived from money earmarked for consumer
protection and would allow the section to contract out
investigative services to help with scamming operations and
other. Additionally, $1 million UGF had been authorized for
the Civil Division, Oil, Gas and Mining Section as a one-
time increment for gas pipeline work (the total request had
been $2 million). A one-time $2 million increment had been
approved for work related to major oil and gas litigation
(the total request had been $4 million). She shared that a
substantial amount of the work on the Trans-Alaska Pipeline
System (TAPS) case was set to wind up by the beginning of
FY 14 and with the settlement of the BP corrosion case the
subcommittee hoped the department could operate with fewer
funds due to the reduced number of large cases.
Representative Holmes discussed that the subcommittee had
authorized $107,300 UGF for core services provided by DOA.
She relayed that $91,200 UGF had been added to fully fund a
language interpreter position for the third judicial
district and a cold case prosecutor position in the
Criminal Appeals Special Litigation Unit. A total of
$906,900 in interagency receipt authority had been approved
for unbudgeted reimbursable service agreements with DHSS,
DOR, DCCED, DPS, and DOA.
2:56:37 PM
Representative Holmes stated that the subcommittee had
denied a $225,000 UGF request for a new criminal attorney
position in Juneau; a new criminal attorney had begun in
the past year. A $225,000 request had been denied for a
prosecuting attorney for Bethel; the budget added a
paralegal in the community, which would address a greater
need. The subcommittee denied $225,000 UGF for a new
prosecuting attorney in Fairbanks and a $100,000 UGF
request for mitochondria and Y-chromosome DNA testing in
criminal justice litigation (the funds would have replaced
a federal grant). She elaborated that the department would
need to operate with existing funding until the state crime
lab that was currently undergoing certification took over
some of the testing in the future.
2:57:45 PM
Representative Thompson addressed the subcommittee
recommendations for the Department of Military and Veterans
Affairs (DMVA). He relayed that the subcommittee had met
five times and had discussed missions and measures,
budgets, and the department's ten-year plan. The
subcommittee had accepted the governor's amended proposal
with several adjustments. A request for $300,000 to cover
base realignment and closure impact under the Office of the
Commissioner was changed to a temporary five-year
increment; the item would be reviewed again in 2018. He
discussed that a $170,000 request had been reduced to
$120,000 for Homeland Security and Emergency Management
(new generators currently would not require as much
maintenance as they would in years to come). A $150,000
increase for veterans' outreach had been denied. He noted
that veterans' outreach had been successful to date with
existing funding. A $75,000 request for cemetery
maintenance had been denied for the Interior as the money
had not been acquired to purchase land for the cemetery.
Representative Thompson communicated that an $8 million
Alaska Aerospace Corporation request had been reduced by $3
million. The subcommittee had denied $80,000 for National
Guard education benefits (over $400,000 went to the
university system to cover education of National Guard
members). An Air Guard facility maintenance Star base
increment of $85,000 had been reduced by $50,000 (the
program had received $45,000 more in federal funds than
were expected). He relayed that the total reductions
equaled $3,405,000.
3:00:53 PM
Representative Costello looked at recommendations from the
Department of Natural Resources (DNR) subcommittee. The
subcommittee recommended a total budget of $158,826,300
including $78,916,900 UGF, $25,649,500 DGF, $40,325,800 in
other funds, and $13,934,100 in federal funds. The total
represented a reduction of $2,276,000 and the elimination
of nine temporary positions from the governor's proposed
budget; the total was an increase of $2,900,300 GF from the
adjusted base. The subcommittee accepted several one-time
increments including $1,000,000 in statutory designated
program receipts for the Office of Project Management and
Permitting for permitting coordination, $1,290,000 UGF to
restore gas pipeline project office staff and operations,
and $1,150,000 UGF to restore the gas pipeline project
office contractors and consultants. Additionally, the
subcommittee approved a funding source change of $555,700
DGF to UGF for administrative services information resource
management in the Land Disposal Income Fund. A $350,000 UGF
increment had been approved for the Division of Mining,
Land and Water for the navigable and public waters research
and assertion of states' access rights. She elaborated that
the increment would enable the state to assert its
ownership on submerged lands beneath navigable waters. The
subcommittee recommended moving $300,000 UGF to an open-
ended language section appropriation for the Oil and Gas
Division related to the arbitration of oil and gas royalty
issues.
Representative Costello continued with subcommittee
recommendations. The subcommittee recommended a language
section appropriation capped at $600,000 for the Oil and
Gas Division and the Alaska Gasline Inducement Act
commercial monitor and adviser. A $125,000 UGF increment
had been denied for the Division of Mining, Land and Water
for the restoration of the Guide Concession Program
development. Additionally, $450,000 UGF had been denied for
the Guide Concession Program implementation; $120,000 UGF
for the program development had also been denied. She
communicated that the subcommittee believed the program
should be a policy call introduced in the form of
legislation.
3:04:46 PM
Representative Costello relayed the subcommittee's
recommendation to move a $500,000 UGF increment into the
language section for the Oil and Gas Division related to
the arbitration of oil and gas royalty issues. The
subcommittee denied a $181,000 UGF request for the
continuation of the Farm to School Program.
Co-Chair Stoltze noted that he and Representative Costello
had both spoken with the commissioner of DNR. He remarked
that the department needed to be proactive. He referred to
historical occurrences related to the current situation.
3:06:14 PM
Representative Edgmon addressed DPS recommendations. The
subcommittee recommended a total budget of $204,051,000
including $171,000,000 UGF, $6,400,000 DGF, $15,300,000 in
other funds, and $10,800,000 in federal funds. The
subcommittee recommended an increase of 4.1 percent above
the adjusted base. The increase included $2,300,000 in all
funds (including 15 new full-time positions); the total GF
increase was $7 million, which included the backfilling of
federal funds for the Bureau of Highway Patrol positions of
$4,200,000 million. The total represented a decrease from
the governor's proposed budget of $5,400,000 GF and 6 full-
time state trooper positions. The subcommittee recommended
a decrease of $1,390,000 for new troopers, which would
enable the department to hire 15 troopers out of the 21
positions proposed by the governor. He noted that the
department currently had 386 out of 409 trooper positions
filled.
Representative Edgmon stated that the subcommittee denied
replacing $1,090,000 in federal Bureau of Highway Patrol
funds and recommended that DPS look for other funding
options for the item. The subcommittee recommended funding
5 of the 15 Village Public Safety Officer (VPSO) positions
proposed by the governor. He relayed that currently 93 out
of 116 authorized VPSO positions had been filled.
Additionally, a $563,000 reduction had been made to
dispatch services; the subcommittee recommended that DPS
conduct an analysis to determine whether contracting
dispatch services was more economical and reliable than
using its internal employees. A reduction of $350,000 to
the Council of Domestic Violence and Sexual Assault (CDVSA)
was recommended, which would cut the CDVSA coordination
program and $50,000 for coaching boys-to-men. Lastly, the
subcommittee recommended a $250,000 GF reduction to trooper
housing and an authorization of $500,000 in GF program
receipts.
3:09:49 PM
Representative Gara asked if funding was available for
current VPSO positions that were vacant. Representative
Edgmon replied in the affirmative. He relayed that funding
5 of the additional 15 VPSO positions proposed by the
governor for FY 14 had been a difficult decision, but he
noted that there were 23 vacant existing positions. He
referred to high turnover rates and the subcommittee's
recommendation for exit interviews to determine reasons for
departure.
Representative Gara asked if there was flexibility to
transfer open VPSO positions to other areas if they were
difficult to fill in specific communities. Representative
Edgmon replied that the program was administered by various
nonprofits and the Northwest Arctic Borough; the individual
positions were not allocated by to specific communities,
but money was designated for specific nonprofit agencies
(with the exception of the Northwest Arctic Borough).
Co-Chair Austerman clarified that a nonprofit such as a
Native corporation only received the funding when a
position had been filled.
Representative Gara pointed to $350,000 that had been
denied for CDVSA and a coaching boys-to-men program. He
queried the role of the CDVSA coordination program.
Representative Edgmon answered that much of CDVSA's work
was coordination with state agencies and entities
throughout the state. There had been a prevention
coordinator position for the past couple of years, which
had helped with outreach services and with items related to
the governor's Choose Respect campaign. The committee felt
that the council and the boys-to-men program could
withstand the cuts.
3:14:21 PM
Representative Thompson addressed the Department of Revenue
(DOR) subcommittee. The subcommittee recommended a total
budget of $349,360,100 including $31,900,000 UGF,
$9,650,000 DGF, $230,859,500 in other funds, and
$76,950,600 in federal funds. He relayed that the committee
met seven times with the department. The subcommittee
denied increments under the tax division of $148,000 for
the film office executive director position; $172,300 for
the oil and gas auditor position, the audit master position
had been partially funded, and excess funding had been
removed; and a reduction of $200,000 had been made related
to funding transferred from services to personnel services.
A capital outlay increment to Child Support Services had
been reduced by $35,000. The total reduction to the
governor's proposed amended budget was $582,700. The
subcommittee's recommendation included an increase of
$1,981,100. All other governor's requests had been
accepted.
3:16:31 PM
Vice-Chair Neuman provided highlights of the Department of
Transportation and Public Facilities (DOT) budget. The
subcommittee recommended a total budget of $625,784,200
including $281,264,900 UGF, $68,251,900 DGF, $272,422,800
in other funds, and $3,844,600 in federal funds. The
subcommittee recommended a reduction of $2,897,900 from the
FY 14 adjusted base, which put the budget $495,200 below
the FY 13 management plan and $9,113,900 below the
governor's $8,618,700 FY 14 amended budget. He relayed that
the reductions were $9.1 million UGF and $760,000 DGF.
Vice-Chair Neuman pointed to reductions including $55,000
for storm water compliance, $166,800 for operating costs
for new Central region facilities, $350,000 for expanded
Mat-Su maintenance services, $469,600 for the airport
deicing chemicals, $132,500 for rural airport maintenance
contracts, and $2,580,700 for state equipment fleet
increases. The subcommittee recommended a reduction in the
current maintenance levels on the municipal owned,
department maintained roads with the intent of completely
eliminating the road maintenance in FY 15 as follows:
$1,300,000 to aviation in the Central region, $500,000 to
northern highways and aviation, and $60,000 to Southeast
highways and aviation. He explained that the roads were
currently maintained by DOT, but were owned by
municipalities. He listed reductions to the Alaska Marine
Highway System (AMHS) including $2,101,000 UGF and $760,000
DGF for marine vessel operations and $1,400,000 UGF for
vessel fuel. He detailed that the subcommittee had
endeavored to make reductions to some of the most
uneconomical ferry routes.
3:20:32 PM
Vice-Chair Neuman read intent language recommended by the
subcommittee: "it is the intent of the legislature for the
department to evaluate the impacts of instituting a landing
fee at state owned and operated primary FAA certificated
airports and to provide a report to the 28th legislature by
January 15, 2014." He pointed to state funded airport
landing fees (e.g. Deadhorse) that the legislature would
evaluate. He stated that it was the intent for the
legislature to eliminate any future issuing of free annual
passes to vehicles or departments for employees, retirees,
and families on AMHS. He believed the cost was over $1
million to the state. He continued that it was the intent
of the legislature for the department to seek efficiencies
and cost reductions in FY 14. He noted the savings would be
considered a carry-forward in the FY 15 operating budget to
increase efficiencies.
3:21:59 PM
Representative Kawasaki wondered why the state maintained
city or municipal roads. Vice-Chair Neuman guessed that the
maintenance was done based on political pressure. He added
that with reductions in state revenue, it would not be
possible to continue the practice.
Representative Kawasaki pointed to a potential circumstance
where a municipality could not afford a blade for a piece
of equipment. He wondered if it would be possible for the
state to charge municipalities for the maintenance
services.
Vice-Chair Neuman replied that the state participated in
shared services with municipalities for efficiencies.
Co-Chair Austerman believed the issue was more prevalent in
rural areas due to interrelations between municipalities
and the state on road maintenance.
Co-Chair Stoltze pointed to Anchorage as an example and
observed that there were efficiencies for maintaining areas
that were contiguous. He relayed that that there was a
formalized agreement in Anchorage between the state and
municipality and surmised that similar agreements existed
in other municipalities as well.
Vice-Chair Neuman noted that reductions had been split
evenly throughout the state.
3:24:40 PM
Representative Munoz thanked University of Alaska staff for
their help in the budget process. The subcommittee
recommended a total budget of $945,199,600 including
$366,413,600 UGF (the remainder was comprised of DGF,
federal, and other funds). The university system employed
4,727 permanent positions and 222 part-time positions. The
subcommittee accepted the governor's amended budget
proposal including funding for contractual salary and
health increases and recommended reverting to a single
appropriation to allow increased flexibility in the
allocation of resources within the university campuses. She
highlighted recommended adjustments made by the
subcommittee. The subcommittee recommended an unallocated
increment of $407,800 UGF and $50,000 in mental health
funds; the system-wide allocation would allow the
university to distribute the funds at its discretion. The
budget included base funding of $250,000 GF for the
Institute of Social and Economic Research (ISER) education
policy study (the two-year study occurred in FY 13 and FY
14).
Representative Munoz communicated that the subcommittee
recommendations resulted in a $2,409,200 UGF reduction to
the governor's amended proposed budget. She shared her
intent to bring an amendment to the House Finance Committee
to address a hollow receipt issue that had been discussed
by the committee in the past; the subcommittee recommended
a reduction of $40 million in hollow receipt authority. She
elaborated that the individual campus line items were
artificially inflated to account for the hollow receipt
authority, which made it difficult to determine where the
money was allocated across the system.
3:27:37 PM
Representative Gara pointed to a denied $2.3 million
increment for the University of Alaska Fairbanks Life
Sciences facility operating costs. He wondered if the
subcommittee intended for the university to absorb the
costs.
Representative Munoz replied that the total increment was
$6 million (approximately 50 percent UGF and 50 percent
DGF). She expounded that the subcommittee's direction to go
to a single appropriation would allow the university the
flexibility to determine where it would make the reduction.
She relayed that there had been seven separate
appropriations in the past, which made it difficult to move
savings from campus to campus. She expressed confidence
that the flexibility would allow the university to locate
savings.
Representative Gara thought the governor had approximately
$2.4 million in GF increment requests; however, there
appeared to be a $16 million difference between the FY 13
and FY 14 budgets.
Representative Munoz responded that the actual allocation
was about $8 million DGF (university receipts) and $8
million in GF; the majority of the total (over $12 million)
was allocated to the health and salary adjustments.
Representative Gara asked if there had been a $16 million
increase. Representative Munoz answered that the increase
was roughly $16 million (half of which was tuition).
3:29:57 PM
Co-Chair Stoltze provided the highlights for the Alaska
Court System. He relayed that the governor's requested
increase was close to $4.5 million; of which, the
subcommittee approved increases of just under $2.7 million.
He pointed to a large increment for a judicial official in
western Alaska with an ocular disability. He noted that
associated costs were high due to the location and lack of
resources. He stated that the item would be met as a
supplemental budget increase as well. He remarked that the
increment had probably tied the hands of the subcommittee
related to its approval of other increments.
Co-Chair Stoltze discussed that $513,800 UGF had been
accepted for facility overhead costs. Additionally, the
subcommittee had ratified $605,200 in Mental Health Trust
Authority receipts for therapeutic courts. He relayed that
a $40,000 appropriation for the Fairbanks 24/7 sobriety
program had been modified as a one-time increment. He
shared that a $456,800 increment for American Disability
Act accommodations had been broken into a $300,000 ongoing
increment and a $56,800 one-time increment for supplies and
necessary equipment. He stated that the subcommittee did
not fully fund an increase for office rent and parking for
the Alaska Judicial Council and a reduction of close to
$176,000 had been made to a request for bandwidth increase.
The subcommittee had funded $123,300 out of a $177,500
requested increase for facility leases. He detailed that
during work with staff it had been determined that a
facility in Unalakleet was not ready for funding, which
allowed the delay of $54,200 in FY 14.
3:36:24 PM
Co-Chair Stoltze pointed to a cautious approach of
replacing federal funds and relayed that a general fund
request for the therapeutic courts had been denied, but
$689,000 receipt authority had been retained. He believed
the item had originally been funded by the mandatory seat
belt law, but funds were no longer available. He commented
that it was one of the continuing tough decisions the
legislature would have to make related to the replacement
of federal funds. He remarked on the legislature's
bicameral process. He relayed that the subcommittee had
denied the advertising budget for the Alaska Judicial
Council; he noted the funding component had been
controversial. He stated that money used to advocate for
the retention and recruitment of judges had been removed.
He read from a letter of intent offered by the
subcommittee:
It is the intent of the legislature that the
legislative committees may assist the Alaska Judicial
Council in public outreach throughout the communities
of Alaska through the facilitation of public meetings
and outreach to augment the Alaska Judicial Council's
work on all activities including selection and
retention of judicial officials. This support may
include office space, video and telecommunications,
and any other accommodations deemed reasonable by
committee chairs. The chairs may expend funds in
assisting non-advocacy public outreach.
Co-Chair Stoltze furthered that outreach would include
informing the public of elections or other. He noted that
the legislature had numerous facilities that were not used
year-round. He relayed that the non-advocacy piece of the
intent language was important to him.
3:40:36 PM
Representative Gara pointed to the loss of $689,000 in
federal funds for wellness courts. He asked for the amount
of funding remaining for the wellness courts.
Co-Chair Stoltze did not have the information.
Mr. Ecklund pointed to page 40 of the budget bill and
relayed that it included $2,794,900 for therapeutic courts.
Co-Chair Austerman reported on the Office of the Governor
budget. The subcommittee recommended a total budget of
$29,606,500 including $28,881,700 UGF, $4,900 DGF, $521,700
in other funds, and $198,200 in federal funds. He
communicated that because the budget was flat compared to
the prior year the only change was to designate a $3
million request for domestic violence and sexual assault as
a one-time item. He pointed to a $250,000 increment for the
redistricting board costs in the supplemental FY 13 and
$1,750,000 in the amended FY 14 budget; the subcommittee
elected to combine both amounts in the supplemental FY 13
budget.
3:43:45 PM
Co-Chair Austerman addressed the Legislature budget. He
relayed that some fiscal impact and zero fiscal impact
changes had been made to the budget. The subcommittee
approved a total budget of $71,527,000 including
$71,052,600 UGF, $71,400 DGF, $403,000 in other funds, and
zero federal funds. Based on Legislative Council
recommendations the subcommittee had added $100 in the
legislative audit for information technology center. Nearly
$2 million in space costs had been consolidated from
several allocations into the facilities rent allocation.
Expenses for the Legislative Finance Division had been
reduced to be evenly split between House and Senate
committees in the amount of $250,000. Committee expenses
had been reduced by $350,000 and the Commission on the
100th Anniversary of the Legislature funding had been
reduced by $25,000, given that it was close to completion.
Session expenses that had been allocated to the Legislative
Council appropriation were moved to the legislative
operating budget appropriation. The subcommittee had
transferred to the legislative state facilities rent
allocation from the Budget and Audit appropriation to the
Legislative Council appropriation. Expenses in the
Legislative Finance Division had been reduced by $1 million
to be split between House and Senate committees; committee
expenses were reduced by $800,000 and by $200,000 in
council and subcommittees. The actions brought the FY 14
budget to $2,200,000 million below the FY 13 management
plan and $2,537,700 below the governor's FY 14 budget.
3:46:47 PM
Co-Chair Austerman discussed the schedule for the following
day.
HB 65 was HEARD and HELD in committee for further
consideration.
HB 66 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB65CSWorkDraft-C Agency Summaries-LFD.pdf |
HFIN 3/4/2013 1:30:00 PM |
HB 65 |
| HB66 CS WorkDraft C-Mental Health HB 66 3-2-13.pdf |
HFIN 3/4/2013 1:30:00 PM |
HB 66 |
| HB65 CS WorkDraft C-Operating 3-2-13.pdf |
HFIN 3/4/2013 1:30:00 PM |
HB 65 |
| HB65 3-4-13 Gov to H Sub LANG Compare CSHB 65 DRAFT VERSION C.pdf |
HFIN 3/4/2013 1:30:00 PM |
HB 65 |