Legislature(2005 - 2006)SENATE FINANCE 532
04/26/2005 09:00 AM Senate FINANCE
| Audio | Topic |
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| Start | |
| SB174 | |
| SB97 | |
| SB171 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 171 | TELECONFERENCED | |
| + | SB 174 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 97 | TELECONFERENCED | |
9:16:40 AM SENATE BILL NO. 97 "An Act making supplemental, capital, and other appropriations, and reappropriations; amending appropriations; making appropriations to capitalize funds; making an appropriation under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." This bill had been previously heard in the Senate Finance Committee. Co-Chair Wilken noted suggested amendments to the FY 06 proposed supplemental appropriations budget had been received from Governor Murkowski. Co-Chair Wilken determined that departmental representatives should speak to the changes. The Committee reviewed a spreadsheet titled "FY2005 Supplementals" updated April 22, 2005 [copy on file.] 9:18:14 AM Co-Chair Wilken commented that statute requires that the gubernatorial administration submit all amendments to the governor's supplemental appropriations budget request by the 60th day of each session. Accommodating these amendments that were submitted as late as the prior day has caused a hardship. He informed that he would work with the Murkowski Administration to ensure the deadline is adhered to in the future. 9:19:28 AM JAMES ARMSTRONG, Staff to Co-Chair Wilken, pointed out that proposed amendments submitted prior to February 28 have been addressed in previous hearings. Proposed amendments received after that date would be discussed at this hearing. 9:19:50 AM Department of Administration Item: 6 Section (in SB 97): 1(d) Results Delivery Unit (RDU): Public Defender Agency Supplemental Need: Projected annual caseload increase - PD was reappointed to several hundred old cases associated with the Blakely decision which rendered some aspects of the State of Alaska's sentencing framework unconstitutional. Also, increases in travel to remote courts, expert witness, discovery and file storage costs. Funding of $24,900 in General Fund/Program Receipts is from the Department of Law from collections under Criminal Rule 39 and Appellate Rule 209. Also includes therapeutic court funding coming from federal funds received by the National Council on Alcohol and Drug Dependency and allocated to State agencies. April 22: Updated projection reduces the amount of general funds needed by $87,200. $800,000 general funds $20,000 Statutory Designated Program Receipts $820,000 Total Funds ERIC SWANSON, Director, Division of Administrative Services, Department of Administration, testified that the Department is continuing to determine the exact amount necessary and this amendment represents the most current estimate. 9:20:34 AM Item: 7 Section: 1(e) RDU: Risk Management Supplemental Need: Two major claims against the State's self- insurance deductible ($1 million per loss) for catastrophic losses have been incurred: Fairbanks Correctional Center $1,000,000 (total cost is just over $1 million) and Fairweather hull damage $350,000. March 9: Cost estimate for the Fairbanks Correctional Center is reduced by $150,000 to $850,000. April 5: Two more claims have occurred: damage to P/V Enforcer $225,000 and Dillingham DOT equipment storage building fire on Feb 12 $670,000. $2,095,000 general funds Mr. Swanson noted the two incidences that occurred after the initial supplemental budget request was submitted. 9:21:16 AM Senator Dyson asked if this supplemental request includes funding required as the result of the State losing a wrongful discharge lawsuit. 9:21:29 AM Mr. Swanson replied that funding is not included in this request. 9:21:39 AM Co-Chair Wilken asked if the State would be reimbursed the $225,000 necessary to repair the P/V Enforcer. 9:21:50 AM Mr. Swanson responded that the Division of Risk Management is pursuing recovery of this expense. He was unsure whether the State would receive any reimbursement. 9:22:05 AM Co-Chair Wilken suggested it would be appropriate to withhold funding for this item in the current fiscal year. If recovery is not received, the legislature could allocate funds as a FY 06 supplemental appropriation. He understood that straps holding the vessel at the shipyard broke and that this occurred before the State took possession of the new vessel. He intended to convey that the State did not intend to pay the resulting repair costs. 9:22:32 AM Mr. Swanson noted the expectation that the State would receive partial reimbursement. The matter would continue to be addressed. 9:22:56 AM Item: 9 Section: None RDU: Personnel Supplemental Need: April 5: Costs related to investigation of alleged violation of Ethics Act $40,000. April 22: Cost increase of $20,000 to a new total of $60,000. $60,000 general funds Mr. Swanson outlined this request. 9:23:29 AM Senator Dyson requested a representative from the Division of Risk Management address the matter of the aforementioned wrongful termination lawsuit. 9:24:19 AM BRAD THOMPSON, Director, Division of Risk Management, Department of Administration, testified that the wrongful termination lawsuit is not included in this funding request and that any judgment would not be paid from this insurance fund. 9:24:40 AM Senator Dyson asked if the department would pay the judgment costs. 9:24:45 AM Mr. Thompson explained that the Tort Section does not defend in these types of litigation. He was unsure if the ruling would be appealed. Mr. Thompson then addressed the matter of damage to the P/V Enforcer, informing that if the support straps did break, the Division would aggressively pursue every effort to recover the repair expenses from the manufacturer. However, he noted contractual limitations within the manufacturing agreement could limit options available for recovery. 9:25:46 AM Co-Chair Wilken requested this information in written format. Department of Community and Economic Development 9:26:09 AM Item: 12 Section: None RDU: Alaska Seafood Marketing Institute Supplemental Need: April 5: Additional federal funds awarded 1/11/05 for the export market access program, which must be spent in FY 05. April 22: Increase by $20,000 RSS for match. $1,500,000 federal funds $20,000 Receipt Supported Services funds $1,520,000 Total Funds JOELLEN HANRAHAN, Director, Division of Administrative Services, Department of Community and Economic Development outlined this request. 9:27:03 AM Item: 13 Section: None RDU: Alaska Seafood Marketing Institute Supplemental Need: April 15: $750,000 of SDPR for herring promotion in the overseas market. Funding coming from the Alaska Fisheries Marketing Board. $750,000 Statutory Designated Program Receipts Ms. Hanrahan noted this funding was awarded during the April Board meeting. 9:27:37 AM Item: 11 Section: None RDU: Capital Supplemental Need: Feb. 28: Manufacturing Extension Program capital project is moved from the FY 06 capital budget to the FY 05 supplemental in order to begin the project earlier. $800,000 federal funds $800,000 BLIC & Corp Receipts $1,600,000 Total Funds Mr. Armstrong noted this item was overviewed at a previous hearing. Department of Corrections 9:28:09 AM Item: 16 Section: None RDU: Inmate Health Care Supplemental Need: April 22- Costs of unanticipated catastrophic medical cases $490,000 general funds MARK ANTRIM, Commissioner, Department of Corrections, testified to the difficulty of the Department to control catastrophic health care issues. To date, the Department has "absorbed the expense of five or six of these instances including treatment of a gunshot wound, hip surgery, heart bypass surgery and a patient requiring Medivac from Nome. Three new cases requiring kidney dialysis would cost approximately $90,000 and hospitalization expenses must be paid for treatment of an inmate with liver disease who has since died. One prisoner is under review for release on medical parole, which should reduce expenses to the State. 9:30:11 AM Co-Chair Wilken asked these expenses would be paid from the general fund and that no other funding source is anticipated. 9:30:22 AM Mr. Antrim affirmed and informed the inmates in these cases do not have other insurance coverage. He noted that payment of medical expenses is secured from insurance companies in instances in which an inmate has such coverage. 9:30:41 AM Department of Education and Early Development Item: 18 Section: 4(b) RDU: Foundation Program Supplemental Need: Reduce the FY 05 entitlement for public school funding by $14,145,500 due to a decrease in projected enrollment; an increase in the amount of federal impact aid that reduces the amount of state aid; and the actual cost of the supplemental funding floor. March 9: An additional decrease of $47,000 -$14,192,500 general funds Co-Chair Wilken commented that because this item represents a funding reduction, no explanation is necessary at this time. 9:30:50 AM Item: 22 Section: 7(a) RDU: Debt Retirement Fund Supplemental Need: Increased capitalization of the Debt Retirement Fund to supplant a shortfall in cigarette tax revenue into the School Fund - the estimate for cigarette tax revenue is reduced by $800,000 from $30.2 million to $29.4 million. This fully funds the School Construction Debt Reimbursement program in FY 05. (Original request consisted of $551,100 general funds, $3,500 federal UR Rcpts, and $254,400 DEED CIP Equity Account.) $0 DEED CIP Equity funds Co-Chair Wilken noted this section of the bill would be deleted. 9:30:58 AM Department of Health and Social Services Item: 29 Section: 8(e) RDU: Public Assistance: Adult Public Assistance Supplemental Need: Savings due to caseload reduction and programmatic changes, particularly last year's changes to interim assistance. April 22: Additional savings of $500,000 to be used to fund the breast and cervical cancer screening supplemental request of $500,000. -$2,538,800 general funds JANET CLARKE, Assistant Commissioner, Division of Finance and Management Services, Department of Health and Social Services, explained the suggestion of utilizing the additional $500,000 savings to fund the breast and cervical cancer program; funding that was originally requested in the FY 05 Fast Track supplemental proposal. 9:31:48 AM Co-Chair Wilken clarified that the need for funding the Adult Public Assistance program has decreased and the Department is requesting the funds be transferred to the breast and cervical cancer-screening program. Ms. Clarke affirmed. 9:32:05 AM Senator Dyson again asked about the lawsuit claiming wrongful discharge of an employee. He asked Ms. Clarke if the State is appealing the court decision. Ms. Clarke did not know. 9:32:26 AM Senator Dyson asked if the ruling were not overturned, whether the judgment would be paid from the Department of Health and Social Services budget. 9:32:35 AM Ms. Clarke surmised that a funding request would be made to the legislature by the Department of Law as a judgment and claims item. 9:32:58 AM Item: 34 Section: None RDU: Behavioral Health: Behavioral Health Medicaid Svc Supplemental Need: Medicaid caseload growth above FY 05 budget projections. At current expenditure rate, the existing appropriation will be gone in April or May. (Originally requested as part of the Fast Track supplemental, but was not included in the final version because funds were not yet needed.) $2,653,700 general funds $3,517,700 federal funds $6,171,400 Total Funds Mr. Armstrong explained the determination that this item could be funded in this bill rather than the fast track supplemental appropriation. Co-Chair Wilken assumed that the funds would be required. Ms. Clarke affirmed. 9:33:41 AM Item: 35 Section: None RDU: Health Care Services: Women's and Adolescents Services Supplemental Need: Feds reduced FFY 05 funding in the Breast and Cervical Cancer screening program. The $500,000 general funds will continue services to 1,600 enrolled women that otherwise would not be served. (Originally requested in the Fast Track supplemental bill, but not funded.) $500,000 general funds Co-Chair Wilken noted this item relates to the aforementioned Item #29. 9:33:47 AM Item: 36 Section: None RDU: Behavioral Health: Srvcs to Chronically Mentally Ill Supplemental Need: April 15: Reappropriation of expected FY 05 lapse of MHTAAR funds to complete the Community Planning and the Independent Case Management projects in FY 06, in the amounts of $110,000 and $89,200, respectively. $0 Ms. Clarke explained this request would extend the lapse date of Mental Health Trust Authority authorized receipt funds previously appropriated for these projects. The Mental Health Trust Authority approved this action. 9:34:17 AM Item: 37 Section: None RDU: Pioneers Homes Supplemental Need: April 22- Appropriate excess receipts for the purchase of needed equipment for the Pioneer Homes $450,000 Receipt Supported Services funds Ms. Clarke stated these receipts were collected in FY 04 and FY 05 and discovered in a March 2005 budget review to have not been appropriated. Some dispute exists in the amount of receipt supported services funds that should be included in the operating budget. The Department is therefore suggesting appropriation of these funds as a one time capital appropriation for the purchase of equipment. She noted the extensive list of equipment needs. 9:35:36 AM Item: 38 Section: None RDU: Sr. Dis. Srvcs: Sr Res Srvcs Supplemental Need: April 22: Additional funding for the Kotzebue Senior Citizens Center residential care grant. $200,000 general funds Ms. Clarke informed that the Department became aware of a reduction in FY 05 for the residential senior services program at this senior center. It was anticipated that this shortfall would be replaced with Medicaid funding. However it has been difficult to get those residents eligible for Medicaid coverage. This request is to utilize general funds 9:36:23 AM Co-Chair Wilken asked if the expectation was that federal funding would be received but those funds were not appropriated. Ms. Clarke affirmed. 9:36:30 AM Co-Chair Green asked if the situation would be rectified for FY 06. Ms. Clarke assured the Department and the Kotzebue center would diligently pursue reinstatement of the funding. General funds would therefore not be requested for this purpose for FY 06. 9:36:45 AM Co-Chair Green asked if legislative intent language on this matter would be "rigorously enforced statewide." Ms. Clarke answered it would. 9:36:58 AM Item: 39 Section: None RDU: Senior and Disabilities Medicaid Services Supplemental Need: April 22: Additional funding needed $7,621,400 general funds $10,345,300 federal funds $17,966,700 Total Funds Ms. Clarke pointed out this is the largest funding request and commented it is her least favorite program that includes the personal care attendant program that funds the waiver and nursing home services. She reminded that the original request in the Fast Track supplemental was for $53 million, and that the legislature already has appropriated that amount. Projections at that time estimated expenditures at approximately $20 million per month; however, the actual cost has been higher for each month since December 2004. Therefore, the Department had no option but to request additional funding. Ms. Clarke stressed this program requires regulation changes to reduce eligibility access. She told of an audit report on the program that she would share with the legislators. The report determined that the entire program requires reform, including significant management controls. The program has expanded at a rate faster than current regulations have the ability to control. Legislative intent language proposed for the FY 06 operating budget directing the Department to adopt regulations to close loopholes has the support of the Department. These efforts must be monitored. Ms. Clarke warned that legislators would likely hear from constituents as these regulations and management controls are implemented. The Department is committed to making necessary changes to ensure the same appropriation requests are not submitted for FY 07. Ms. Clarke qualified that a portion of the increased expenses, relating to nursing home costs, was unanticipated. The Department is reviewing the matter to determine if this is the result of new "beds" being made available. Some cost increase was expected, but the actual increase is ten percent, which is higher than the predicted amount. 9:41:16 AM Co-Chair Wilken informed that intent language included in the FY 06 operating budget appropriation would hopefully assist in containing this expense. 9:41:25 AM Senator Dyson commented that this program represents an instance in which the good intentions of empowering families to care for their senior members has instead enabled people to take advantage of the program. He expressed willingness to assist in correcting this. 9:42:15 AM Co-Chair Green asked the consequences if this request were not funded. 9:42:24 AM Ms. Clarke replied that if the $18 million requested in this legislation were not appropriated, the funding for this program would be exhausted as of June 2005 and the Department would be unable to pay the assisted living facilities, nursing homes and other service providers. 9:42:52 AM] Co-Chair Green asked if the expenditures could be prorated for this program. Ms. Clarke answered that this was not an option. Co-Chair Green suggested this could be considered for future years to avoid similar appropriation requests. 9:43:18 AM Ms. Clarke spoke of questions to the legality of prorating Medicaid services. When such options have been considered in the past, the Department has been advised of the "difficulty" in prorating Medicaid payments. 9:43:48 AM Co-Chair Green clarified the State has no ability to adjust rates in the event of this situation. 9:44:00 AM Ms. Clarke affirmed that the Department of Law has advised that emergency regulations could not be adopted to prorate payments as the result of a budget crisis. 9:44:21 AM Senator Hoffman noted the anticipated public "backlash" that would result from the upcoming regulation changes to the program. He asked how those changes would affect the program and the amount of costs savings projected for FY 07. 9:44:57 AM Ms. Clarke told of 14 intent language items discussed by the Department of Health and Social Services budget subcommittee that basically relate to reducing and controlling eligibility and access to the program. 9:45:30 AM STEVE ASHMAN, Director, Division of Senior and Disabilities Services, Department of Health and Social Services, testified that the Division is in the process of drafting regulations to implement the 14 intent language items. The most significant change would clearly define eligibility for this program. This would involve determining whether the personal care attendant would serve as a substitute for the patient entering a nursing home or respite care facility, in that the patient would otherwise require such care. The Division is also reviewing the definitions of qualifying disabilities. 9:46:34 AM Senator Hoffman asked the percentage of the current $240 million cost of this program would be reduced as a result of these changes. 9:46:50 AM Mr. Ashman replied that the cost analysis has yet to be completed. 9:47:04 AM Senator Hoffman asked if the estimate was two percent, five percent, or other general amount. 9:47:09 AM Mr. Ashman estimated that a minimum savings of ten percent is expected and that the intent is that the amount would be higher. 9:47:23 AM Senator Hoffman calculated a ten-percent reduction to the program at $24 million. 9:47:28 AM Ms. Clarke clarified that the cost of the personal care attendant portion of the program is approximately $80 million. 9:47:50 AM Department of Law Item: 40 Section: 9 RDU: Civil Division, Deputy Attorney General's Office Supplemental Need: Judgments and claims as of 2/7/05 are $1,108,900 March 9: adds $209,700 for a new total of $1,318,600 April 15: adds $621,400 for a new total of $1,940,000 April 22: adds $51,900 ($2,700 general funds and $49,200 PSTF) for a new total of $1,991,900 $1,942,700 general funds $49,200 Public School Trust Fund $1,991,900 Total Funds Senator Dyson asked if the aforementioned wrongful discharge lawsuit is reflected in this item. 9:48:27 AM KATHRYN DAUGHHETEE, Director, Administrative Services Division, Department of Law, asked if Senator Dyson was referencing the case resulting from the dismissal of an employee from the position of Long Term Care Ombudsman. Senator Dyson corrected the lawsuit he spoke to involved a former human resources employee of Department of Health and Social Services Ms. Daughhettee replied that this item includes payment for one employment related litigation, which is different from the case Senator Dyson referenced. She noted that funding for a judgment or claim is not requested until a case is resolved; if that case were appealed, it would not be included in this supplemental appropriation request. 9:49:11 AM Senator Dyson clarified this. 9:49:31 AM Item: 47 Section: None RDU: Environmental Law Supplemental Need: April 15: Analysis of continuing injury from the Exxon Valdez Oil Spill and development of restoration options; FY 06 lapse date. $75,000 Exxon Valdez Oil Spill Rest. Co-Chair Wilken outlined this item and it was established there was no interest in discussion at this time. 9:49:45 AM Department of Natural Resources Item: 58 Section: None RDU: Agricultural Dev Supplemental Need: April 15: Scope change to sec. 24(n), ch. 159, SLA 2004, for the Alaska dairy industry and the statewide economic disaster related to the border closure against ruminants. $0 Co-Chair Wilken defined "ruminants" are "cud chewing animals." 9:50:11 AM Department of Revenue Item: 64 Section: None RDU: Child Support Services Division Supplemental Need: Feb 28: Replacement funds for FFY 02 incentives that were wrongfully withheld due to a delay on the part of the federal government. Original request of $602,000 federal funds. March 11: Delete request $0 Co-Chair Wilken stated that because this item is deleted, discussion was not warranted at this time. 9:50:15 AM Item: 66 Section: 16(a) RDU: School Debt Reimbursement Supplemental Need: Fund source change due to a shortfall in cigarette tax revenue deposits into the School Fund. The School Fund is reduced from $30.2 million to $29.4 million and the Debt Retirement Fund is increased from $51,670,084 to $52,470,084. March 9: Amendment due to final reconciliation of FY 05 school debt reimbursement needs: overall the amount is reduced $8,838,900 to $73,031,200; Debt Retirement Fund is reduced by $11,620,684 from $51,670,084 to $40,049,400; and School Fund is increased by $2,781,800 from $30,200,000 to $32,981,800 April 5- School Fund revenue is expected to be $400,000 less than originally anticipated, which requires a fund source switch between the School Fund and the Debt Retirement Fund in the same amount. -$8,838,900 Debt Ret Fund and School Fund Co-Chair Wilken remarked that discussion on this item is not necessary at this hearing. 9:50:23 AM Department of Transportation and Public Facilities Item: 70 Section: 17(c) RDU: Capital Supplemental Need: Emergency and Non-routine Maintenance: Failed railroad crossings, $305,000 Winter ice storm and avalanche damage, $50,000 Johnson River bridge damage, $218,400 April 15: Wolverine Road on Lazy Mountain, $170,000 $743,400 general funds NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Facilities, testified that a portion of the roadway of Wolverine Road near Palmer, slid downhill as a result of the spring thaw. This portion of the request is to undertake emergency repairs until permanent repairs could be made in a future project. 9:51:30 AM Item: 85 Section: None RDU: Fairbanks Airport Operations Supplemental Need: March 11: Utility cost and consumption increases. $127,700 International Airports Revenue Fund Ms. Slagle noted this is similar to other supplemental appropriation requests for funding to address increased costs of electricity and natural gas. The airport staff has been attempting to absorb these increases in its regular budget with savings from position vacancies, etc., but determined this would not be possible. Item: 76 Section: 17(i) RDU: Central Region Highways and Aviation Supplemental Need: Anchorage snowhaul and equipment fuel. Utilities, sand and steel cost increases. $1,374,400 general funds Ms. Slagle understood the concerns about proposed amendments to the supplemental appropriation request submitted after the deadline. She announced that the final expenses for this item have been determined and therefore the originally requested amount would be reduced by $100,000 to reflect actual usage. The amended amount, not shown on the spreadsheet would be $1,274,400. 9:53:13 AM Office of the Governor Item: 102 Section: None RDU: Contingency Fund Supplemental Need: March 11: Reimbursement of funds provided To the Department of Commerce, Community and Economic Development for emergency bulk fuel loans made to small communities, $319,500. April 22: Increased costs of $65,700 for two additional small community loans brings the total to $358,200. $385,200 general funds LINDA PEREZ, Administrative Director, Division of Administrative Services, Office of the Governor, noted the members had a list of the communities and loan amounts [copy not provided.] Co-Chair Wilken asked if these loans were made through the Denali Commission program, or a different program. Ms. Perez deferred to the Department of Community and Economic Development. 9:54:08 AM Co-Chair Wilken asked if this request is in addition to the $65,700 appropriated in the fast track supplemental legislation. 9:54:19 AM MIKE BLACK, Director, Division of Community Advocacy, Department of Commerce, Community and Economic Development, testified that these loans were made through the Department's bridge loan program. The funds requested in this legislation are separate from the earlier fast track supplemental appropriation. The bridge loan program was developed the previous year to address high fuel costs. 9:55:25 AM Co-Chair Wilken asked what agency receives the loan repayments. 9:55:30 AM Mr. Black explained the revolving loan program that is repaid over three years. Communities borrow from their account held within this program and could borrow again once the outstanding balances are repaid. 9:55:52 AM Senator Hoffman asked if the Office of the Governor ascertained that a commitment was received from the legislature and therefore allocated these contingency funds based on the expectation that the program would be funded. Mr. Black affirmed. 9:56:28 AM Item: 103 Section: None RDU: Executive Office Supplemental Need: April 5: Additional funding for the Northern Forum. $100,000 general funds Co-Chair Wilken noted this appropriation is necessary to comply with a commitment made by the legislature. 9:56:40 AM Item: 104 Section: None RDU: Executive Office Supplemental Need: April 13: Work related to the state gas pipeline and to brining North Slope natural gas to market for FY 05 and FY 06. $500,000 general funds Ms. Perez told of the accelerated focus on securing a contract for a natural gas pipeline and the need for additional funding for extra travel expenses and other costs. 9:57:03 AM Item: 105 Section: None RDU: Multiple Supplemental Need: April 22: Reappropriation of any FY 05 general fund balances within the Office of the Governor for FY 06 operating costs. $0 Co-Chair Wilken asked if this provision is standard language included in all supplemental appropriation legislation. Mr. Armstrong affirmed. Ms. Perez also affirmed. The bill was HELD in Committee.
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