Legislature(2021 - 2022)GRUENBERG 120
02/17/2022 03:00 PM House STATE AFFAIRS
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SB 25-STATE GOV'T FINANCES: WEBSITE HB 86-STATE GOV'T FINANCES: WEBSITE 4:19:14 PM CHAIR KREISS-TOMKINS announced that the final order of business would be SENATE BILL NO. 25, "An Act relating to the establishment and maintenance of an Internet website providing information on state government financial transactions and specifying the information to be made available on the website" and HOUSE BILL NO. 86, "An Act relating to the establishment and maintenance of an Internet website providing information on state government financial transactions and specifying the information to be made available on the website." 4:19:38 PM REPRESENTATIVE GEORGE RAUSCHER, Alaska State Legislature, prime sponsor, introduced HB 86, the companion bill to SB 25. He conveyed his constituents' beliefs that the legislature did not balance the budget and that money was being hidden from them. He explained that HB 86 related to the establishment and maintenance of an internet website that would provide information on state government financial transactions. 4:21:36 PM SENATOR BILL WIELECHOWSKI, Alaska State Legislature, prime sponsor, introduced SB 25. He stated that fundamentally, the bill would require the state to maintain an online, searchable database of all state expenditures over $1,000. He paraphrased the sponsor statement [included in the committee packet], which read as follows [original punctuation provided]: The state of Alaska spends billions of dollars each year on everything from office supplies, professional services and capital improvement projects. Public accountability helps ensure that state funds are spent wisely. All 50 states operate websites that make information on state expenditures and revenues accessible to the public. However, compared to other states Alaska's site is ranked as one of the worst in the nation at making the data accessible to the public. The intent of the Alaska Online Checkbook Act is to create a free, searchable website that provides Alaskans with easy access to detailed and comprehensive information on state spending. This will encourage better understanding of state operations and, ultimately, help ensure that funding is directed to the state's most important needs. The state currently posts some financial information in a downloadable spreadsheet, but this spreadsheet is very cumbersome, must be downloaded, is difficult to search and understand. It does not provide any "big picture" context about state expenditures vs. revenues nor is it codified in law. The ability to see how Alaska's government uses public funding is fundamental to transparency and bolsters public confidence in government and promotes fiscal responsibility. SB 25 will give Alaskans easy access to detailed information on state expenditures and revenue, empowering them to become fiscal watchdogs. It will lead to greater government accountability and a public better able to assist in making difficult government decisions. I hope that you will join me in taking reasonable steps to ensure that Alaskans have access to our state's financial information. 4:24:44 PM The committee took a brief at-ease. 4:25:30 PM CHAIR KREISS-TOMKINS welcomed Mr. Dunsmore. 4:25:34 PM DAVID DUNSMORE, Staff, Senator Bill Wielechowski, Alaska State Legislature, on behalf of Senator Wielechowski, prime sponsor of SB 25, provided a PowerPoint presentation, titled "Senate Bill 25" [hard copy included in the committee packet]. He directed attention to slide 2, which read as follows [original punctuation provided]: SB 25: The Alaska Online Checkbook Act • Codifies and modernizes Alaska's Online Checkbook website • Requires the state to provide monthly and annual financial information to the public on a user- friendly website. • Creates a one-stop-shop for information on revenue and expenses. • Provides detailed information on state expenditures and revenue including date, vendor, agency, and expense type MR. DUNSMORE continued to slide 3, which read as follows [original punctuation provided]: Alaskans Deserve Better Transparency In 2018 Alaska received a failing grade from the U.S PIRG Education Fund for providing online access to government spending data. Alaska has no statutory requirements to maintain an online checkbook. MR. DUNSMORE turned to slide 4, which read as follows [original punctuation provided]: SB 25: A Win-Win-Win for Alaskans Will provide policy makers with user-friendly access to actual unaudited revenue and expenditure data Makes state government more accountable by making information readily available to the public. Allows vendors to submit more competitive bids by reviewing previous payments. 4:27:30 PM MR. DUNSMORE advanced to slide 5, which read as follows [original punctuation provided]: SB 25 Improves Transparency and Usability Current Checkbook Online Can be taken down at any time. Not searchable online, data must be downloaded as a PDF or Excel file. Does not include revenue reports. Does not allow year to year spending comparison. Does not include spending for the University of Alaska or public corporations. Alaska Online Checkbook Act Monthly & annual reporting requirements codified in Alaska Statutes. Data is searchable online by agency, vendor, year, purpose, amount, and accounting code. Includes both revenue & expenditures. Allows year to year spending comparisons. Includes revenue & expenses of University of Alaska & public corporations. 4:28:08 PM MR. DUNSMORE proceeded to slide 6, which read as follows [original punctuation provided]: SB 25: Reporting Requirements Revenues Receipts or deposits. Proceeds from taxes. Agency earnings (sales, services, licenses, permits, etc.). Other revenues (Interest, Lease, Gifts, Donations, etc.). MR. DUNSMORE continued to slide 7, which read as follows [original punctuation provided]: SB 25: Reporting Requirements Expenditures The names and locations of any persons to whom payment was made. The amounts of the expenditures disbursed. The type of transaction, by account code, including the purpose of the expenditure. MR. DUNSMORE turned to slide 8, which read as follows [original punctuation provided]: SB 25: Reporting Requirements Employees and Contractors The number of full-time, part-time, and temporary employees by agency. The number of independent contractors by agency. Total general fund payroll by agency. MR. DUNSMORE advanced to slide 9, which read as follows [original punctuation provided]: SB 25: Reporting Requirements Account Balances and Debt Statutory Budget Reserve (SBR). Constitutional Budget Reserve (CBR). Permanent Fund Earnings Reserve Account (ERA). Total long-term debt by agency. 4:29:22 PM MR. DUNSMORE proceeded to slides 10-11, indicating that the current checkbook website was outdated, as it only allowed information to be downloaded by fiscal year and was difficult to search through; additionally, spending could not easily be tracked by year. He reported that in FY 16, there were 78,156 individual reports in the online checkbook. Slides 12-17 illustrated examples of Ohio's online checkbook. 4:30:47 PM MR. DUNSMORE concluded on slide 18, which read as follows [original punctuation provided]: SB 25: Additional Benefits Mississippi reported that every information request fulfilled by its transparency website rather than by a state employee saves the state between $750 and $1,000 in staff time. South Carolina open records requests dropped by two- thirds after the creation of its transparency website, reducing staff time and saving an estimated tens of thousands of dollars. The Texas Comptroller used its transparency website to evaluate spending. By monitoring contracts more closely and sourcing services from new vendors when the potential for cost-cutting was identified, the state saved more than $163 million. 4:31:27 PM CHAIR KREISS-TOMKINS invited questions from committee members. 4:31:31 PM REPRESENTATIVE EASTMAN asked whether salary information would be available on the online checkbook. MR. DUNSMORE explained that an amendment in the Senate Finance Committee had clarified that individual wage payments would not be listed; however, state employee salaries would still be public information. REPRESENTATIVE EASTMAN sought to confirm that annual salaries would be available. MR. DUNSMORE confirmed, reiterating that individual wage payments were excluded to prevent privacy infringement. 4:32:59 PM REPRESENTATIVE EASTMAN recalled that the Alaska Public Offices Commission (APOC) website used to allow searches for specific donations, which could then be shared via direct link. He asked whether the bill would allow for that type of search. MR. DUNSMORE shared his belief that the bill did not explicitly allow for that type of inquiry. He offered to follow up with the requested information. 4:34:43 PM REPRESENTATIVE TARR noted that she had signed on as a co-sponsor because she believed in building accountability and trust with the public. She inquired about the frequency of reporting. 4:35:28 PM SENATOR WIELECHOWSKI said the intent was to share the most updated information as possible; however, the legislation would be subject to existing administrative limitations. He directed attention to page 4, lines 19-21, which indicated that information "shall" be updated on a monthly basis. 4:36:14 PM CHAIR KREISS-TOMKINS invited a response from Mr. Zigmend. 4:36:34 PM HANS ZIGMEND, Director, Division of Finance, Department of Administration (DOA), as to whether or not the information could be updated on a more frequent basis, said there were certain limitations. Nonetheless, he acknowledged that depending on how the technology was implemented, it could be possible. He maintained that monthly reporting was the most reasonable timeframe to produce accurate data. MR. DUNSMORE in response to Representative Tarr, noted that the Senate Finance Committee had added the terms "estimated" and "unaudited" in several sections of the bill to allow for quicker reporting. 4:39:00 PM CHAIR KREISS-TOMKINS suspected that there was a small niche of government software providers. He inquired about the landscape of potential private sector partners. 4:39:46 PM MR. ZIGMEND listed several software options, such as BusinessOptix and Tableau. CHAIR KREISS-TOMKINS, referencing the fiscal note, asked how the $65,000 figure was arrived at. MR. ZIGMEND explained that $65,000 was based on an estimate from the Office of Information Technology (OIT), DOA. He acknowledged that until the procurement process had been completed, that figure was only an approximation. CHAIR KREISS-TOMKINS presumed that OIT had considered licensing agreements from different vendors and what that might cost. MR. ZIGMEND confirmed. He reiterated that there was a range of potential outcomes. CHAIR KREISS-TOMKINS inquired about annexing the University of Alaska (UA) and public corporations into the online checkbook and asked what that would cost. MR. ZIGMEND explained that the university would have to provide that information to DOA for it to be presented on the online checkbook. 4:44:28 PM CHAIR KREISS-TOMKINS sought to confirm that currently, UA financials were not represented on the online checkbook; however, under the proposed legislation, UA financials would be included, which would require additional work. He asked if that was accurate. MR. ZIGMEND said, "That's correct." CHAIR KREISS-TOMKINS asked whether that would require extra expense. MR. ZIGMEND believed that any extra cost would be to the university, as they would be responsible for compiling and providing the reports. CHAIR KREISS-TOMKINS asked whether any conversations had transpired with the university. MR. ZIGMEND said the Division of Finance had not communicated with the university. CHAIR KREISS-TOMKINS asked which public corporations would be affected by the bill. MR. ZIGMEND offered to follow up with the requested information. 4:45:59 PM The committee took a brief at-ease. 4:46:48 PM CHAIR KREISS-TOMKINS said a list of corporations would be appreciated in order to anticipate implementation requirements and costs. MR. ZIGMEND offered to follow up with the list of corporations that would be impacted. 4:48:48 PM MR. WIELECHOWSKI, in response to a question from Representative Vance, explained that the effective date had been a big issue in the Senate State Affairs Committee. He noted that he would prefer an immediate effective date. He said it was unclear why it would take two years to implement the legislation and deferred to DOA. 4:50:01 PM CHAIR KREISS-TOMKINS opened invited testimony. 4:50:54 PM VERI DI SUVERO, Executive Director, Alaska Public Interest Research Group (AKPIRG), expressed strong support for both bills. They paraphrased their written testimony [included in the committee packet], which read as follows [original punctuation provided]: The Alaska Public Interest Research Group (AKPIRG), established in 1974, advocates on behalf of public and consumer interests. To our knowledge, we are the only non-governmental, non-profit organization focused on addressing Alaska-specific consumer interest issues. Transparency is a cornerstone of a democracy. It's also essential for good government. Most Alaskans want to know what government is up to with their public dollars. These Alaskans, including legislators, want this information to be easy to find. AKPIRG supports SB 25 The Alaska Online Checkbook Act. The implementation of the Department of Administration's Alaska Online Checkbook is critical because it enables the public to better understand what their government officials are up to and how they spend our public dollars. Public access to state financial information accomplishes many things: it empowers Alaskans, including legislators, is an important element of government accountability, and provides a more functional system of checks and balances. While the current Online checkbook suffices for now, the enhancements contained within SB 25 facilitates a more seamless process when members of the public review state spending. These improvements include searchable features, addition of procurement documents and agencies who do not use the state accounting system, and embedded links to primary financial documents, among other things. We believe it is important to make this Online Checkbook so that expenses can be reviewed with the most ease possible. All accounting system codes should be specific to the associated transaction and identified with explanations. Accounting terms should be defined, ie. roll up. A chart of accounts guide would be a helpful tool for the public. We also believe that credits like tax credits, subsidies, and other costs need to be included in the Alaska Online Checkbook in order to reflect the true cost of certain policies like senior credits, tax credits, education subsidies, etc. These figures would greatly aid in the public's understanding of where the money goes--or doesn't go, in these instances. Lastly, interagency receipts should also be included. Especially if they deal with personnel, travel, and relocation costs. The Online Checkbook system should be simple so that everyone can understand it--and in order to do that, it must have all the information, so Alaskans can see the true costs to run our State. 4:53:11 PM CHAIR KREISS-TOMKINS announced that HB 86 and SB 25 were held over.