Legislature(2015 - 2016)SENATE FINANCE 532
04/02/2015 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB71 | |
| HB72 || HB73 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 71 | TELECONFERENCED | |
| + | SB 86 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 72 | TELECONFERENCED | |
| += | HB 73 | TELECONFERENCED | |
CS FOR HOUSE BILL NO. 72(FIN)
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs and capitalizing funds; and providing
for an effective date."
CS FOR HOUSE BILL NO. 73(FIN)
"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."
3:31:12 PM
Co-Chair MacKinnon MOVED to ADOPT Amendment 24(copy on
file).
Co-Chair MacKinnon OBJECTED for discussion.
3:31:39 PM
JAMES ARMSTRONG, STAFF, SENATOR PETE KELLY, discussed
Amendment 24:
Page 1, line 2, following "funds;":
Insert "amending appropriations"
Delete all material and insert:
"(c) The amount necessary, after the
appropriation made in sec. 28(c), ch. 16, SLA 2014, as
amended by sec. 30 of this Act, when added to the
balance of the public education fund (AS 14.17.300) on
June 30, 2015, estimated to be $151,000,000, to fund
the total amount for the fiscal year ending June 30,
2016, of state aid calculated under the public school
funding formula under AS 14.17.41 O(b) multiplied by
0. 959, is appropriated from the general fund to the
public education fund (AS 14.17 .300)."
Page 79, following line 29:
Insert a new bill section to read:
"*Sec. 30. Section 28(c), ch. 16, SLA 2014, is amended
to read:
(c) The sum of $1,002,568,100 [$1,202,568,100] is
appropriated from the general fund to the public
education fund (AS 14.17.300)."
Renumber the following bill sections accordingly.
Page 80, line 6:
Delete "Section 31"
Insert "Sections 30 and 32"
Delete "takes"
Insert "take"
Page 80, line 8:
Delete "secs. 32 and 33"
Insert "secs. 33 and 34"
Mr. Armstrong said that the change would prorate education
at 95.9 percent.
3:32:59 PM
Co-Chair Kelly clarified that the mechanics of the forward
funding for education needed to be reduced for FY 15, money
was then moved to the FY 16 account and would be funded at
a percentage level lower than had been anticipated. He
asserted that the $983 million would not be a reduction to
education, nor would the $151 million.
3:33:41 PM
Mr. Armstrong specified that the total funding for FY 16
was 1,151.0.
3:34:07 PM
Senator Olson understood that instead of the BSA being
fully funded, there would be a diminished amount of $151
million.
Mr. Armstrong clarified that the BSA would be reduced in FY
16 by $49 million. He explained that the amendment would
result in the absence of forward funding; the public
education fund would have no money for FY 17. The money
would go into the constitutional budget reserve (CBR).
Co-Chair Kelly offered an "at ease" so that Mr. Armstrong
could answer committee members question concerning the
amendment.
3:35:28 PM
AT EASE
3:37:50 PM
RECONVENED
Co-Chair Kelly noted that the fiscal times faced by the
state were unprecedented and that "nothing could be beyond
scrutiny." He gave assurances that the committee wished to
protect the quality of education in the state, and had
taken steps to make minimal reductions in the education
budget. He warned that FY 17 would be "even more scary". He
shared that oil production in the world could be
increasing, which would negatively affect the price of oil
and, subsequently, the state budget. He said that if the
amendment did not pass, the conference committee would not
be able to make necessary reductions to the budget.
Co-Chair Kelly removed his OBJECTION to the ADOPTION of
Amendment 1.
3:39:49 PM
There being NO further OBJECTION, it was so ordered.
Co-Chair MacKinnon MOVED to ADOPT Amendment 25.
Co-Chair Kelly OBJECTED for discussion.
Mr. Armstrong explained Amendment 25:
Page 41, line 33:
Delete "30,074,300"
Insert "30,687,300"
Delete "30,024,300"
Insert "30,637,300"
Page 42, lines I 0 - 11:
Delete all material and insert:
"ALLOCATIONS
Legislature State 2,352,000
Facilities Rent -
Anchorage
716 W. 4th Ave.
It is the intent of the legislature that the amount
appropriated in this allocation be used to make lease
payments under the Anchorage 716 W. 4th Ave. lease
through January 2016.
Legislature State 3,837,600
Facilities Rent -
Other than
Anchorage
716 W. 4th Ave."
Adjust fund sources and totals accordingly.
Lease for 716 W. 4th Ave. Narrative:
In the proposed FY 16 Legislature Budget there is a
$4,032,000 request in the "Legislature State
Facilities
Rent -Anchorage LIO" component for the lease and
expenses for 716 W. 4th Ave., that houses legislators,
legislative staff, and the ethics office. Of that
amount, $3,380,000 is rent and $652,000 is for
operating expenses for that facility which includes
utilities, insurance, taxes, property management,
janitorial, maintenance, security, etc.
This proposed amendment creates two separate
allocations instead of one consolidated allocation
dealing with rent and leasing: an allocation for
"Legislature State Facilities Rent 716 W. 4th Ave.,"
and a separate allocation for "legislature State
Facilities Rent other than 716 W. 4th Ave." In
addition, this amendment reduces the appropriation
request for 716 W. 4th Ave. to $2,352,000. That amount
will cover the period of July 1, 2015 - January 31,
2016, for rent of $281,638 per month and operating
expenses for that time period. The legislature will
not appropriate any additional lease payments under
the lease for 716 W. 4th Ave. after termination of the
lease on January 31, 2016. Additionally, we are
increasing the "Legislature State Facilities Rent -
Other Than 716 W. 4th Ave." rent by $277,000, to cover
the remaining five months of Anchorage lease costs at
the state Robert B. Atwood Building.
With the adoption of this amendment, and the
termination of the lease for 716 W. 4th Ave., and a
relocation of the Anchorage legislative information
office to the Robert B. Atwood Building after January
31, 2016, there would be a savings of $1,403,000 for
FY 16. The savings per year starting in FY 17 would be
$3,367,224. This translates to $33,672,240 in savings
for a 10-year period.
Co-Chair Kelly REMOVED his OBJECTION to the ADOPTION of
Amendment 25.
There being NO further OBJECTION, it was so ordered.
3:41:38 PM
Co-Chair Kelly MOVED to ADOPT Amendment 26.
Co-Chair MacKinnon OBJECTED for discussion.
Co-Chair Kelly discussed Amendment 26:
Page 72, following line 22:
Insert a new subsection to read:
"(b) Federal designated program receipts under AS
47.07.060 for the proposed expansion of the state's
Medicaid program may not be accepted or expended
without an acceptable reformation plan and
appropriation approved by the legislature.'
Reletter the following subsections accordingly.
Co-Chair Kelly stated that the amendment was a "self
defense mechanism" to protect the legislature. He said that
Medicaid expansion would continue to be discussed, but
assurances were needed that the expansion would not be done
unilaterally by one branch of government.
3:42:43 PM
Senator Olson queried the effects of Medicaid expansion on
the state.
Co-Chair Kelly related that the governor's Medicaid
expansion bills were actively moving through both bodies.
He stated that the amendment was not related to either
piece of legislation.
3:43:13 PM
Co-Chair MacKinnon REMOVED her OBJECTION to the ADOPTION of
Amendment 26.
There being NO OBJECTION, it was so ordered.
3:43:25 PM
Co-Chair Kelly referred to Amendments 17 and 18. He shared
that he and the sponsor of the amendments had agreed to
take up the issues related in the amendments during the
coming conference committee on HB 72.
Senator Olson WITHDREW Amendment 17.
3:44:04 PM
Senator Olson WITHDREW Amendment 18.
3:44:20 PM
AT EASE
3:44:28 PM
RECONVENED
Senator Bishop MOVED that unanimous consent be made under
Uniform Rule 31A of the Alaska State Legislature to rescind
Amendments 7 and 7B, which dealt with monetary terms of
collective bargaining agreements.
Co-Chair MacKinnon OBJECTED for discussion.
Senator Bishop spoke to his motion. He shared that during
the FY 15 session he had believed that the administration
and collective bargaining units should negotiate contracts,
and the legislature should only vote on the monetary terms.
He said that the legislature had the authority to fund or
not to fund the monetary terms. He understood that the
state was in financially precarious times. He offered that
bargaining units were aware of the fiscal climate. He
thought that the amendments would "taint the water" for
future contract negotiations.
3:48:29 PM
Co-Chair Kelly stated that he could not support the motion.
3:49:13 PM
Senator Olson related that he had been surprised at reading
the amendment the previous day. He referred to the families
of employees that would be affected by the proposed
amendment and opined that this would upset their carefully
laid financial plans. He offered support for the motion.
A roll call vote was taken on the motion.
IN FAVOR: Bishop, Olson
OPPOSED: Dunleavy, Hoffman, Micciche, Kelly, MacKinnon
The MOTION FAILED (2/5).
3:51:50 PM
Co-Chair Kelly thought that there was value in further
discussing the state's fiscal situation. He mused that the
current fiscal climate was unusual and was projected to
remain unstable. He asserted that at this point in history
the committee needed to respond in the best interest of the
state. He relayed that he found no joy in the cuts that had
been made, but believed that they committee had done well
to not impact families with the budget cuts. He asserted
that the positions that had been cut were mainly "phantom"
positions. He said that the committee had worked to
maintain grants and had been attentive to Medicaid, health
and social service, and education issues. He stressed that
the committee had prioritized the cuts to have the least
impact on Alaskans. He spoke of future conference committee
discussions and believed that the actions of the finance
committee would provide leverage when working with the
other body. He expressed pride for the operating budget and
thanked all of the staff who had worked to craft the bill.
3:55:29 PM
Co-Chair MacKinnon publicly disclosed her close economic
relationship and conflict of interest regarding her
husband's association with the Construction Education
Foundation, which received money from the state through the
Department of Labor & Workforce Development.
Co-Chair Kelly retorted that she would still be required to
vote on the bill.
3:56:10 PM
Co-Chair MacKinnon opined that the budget cutes had been
difficult, but had been the fiscally responsible thing to
do for the state. She asserted that reoccurring operating
costs needed to be eliminated in order to significantly
decrease the hit to Alaska's savings account. She furthered
that the state would be drawing, prior to June 30, 2015,
$3.5 billion and eliminating the statutory budget reserve.
In July 2016, the state stood to draw another $3.5 billion,
and a vote would be needed to access the funds from the
constitutional budget reserve (CBR). She understood that
there were cuts to the budget that were unpopular, but the
cuts had been made in an effort to share the economic
burden across the state. She hoped that the potential
gasline project would provide economic relief to the state.
She stated that the vote to not honor state union contracts
had been "heart wrenching". She said that the global oil
market did not inspire hope for a rebound in price in the
foreseeable future. She extended thanks to all of the staff
that had worked on the budget.
3:59:51 PM
Vice-Chair Micciche offered his closing words concerning
the budget process for FY 16. He noted that the legislature
had seen the budget shortfalls coming several years ago and
had prepared accordingly. He lamented that the cuts he had
made to the Department of Health and Social Services and
Department of Transportation and Public Facilitates budgets
had been difficult. He said the state was not poor, but
tough decisions had to be made and pain needed to be felt
by everyone.
4:04:04 PM
Senator Bishop echoed the comments of Co-Chair MacKinnon.
He asserted that the state needed to stay in a strong cash
position and encouraged the diversification of Alaska's
economy by monetizing North Slope gas.
4:05:14 PM
Co-Chair Kelly hoped that the capital budget process would
result in a $730 million cut across all FY 16 budgets.
4:06:24 PM
Senator Hoffman thanked the committee for keeping cuts
equal between both urban and rural Alaska. He commented
that the initial $750 million cut would be the easiest cut
yet made; if the state cut another $750 million each year,
for the next 4 years, the state would still face a deficit
if the price of oil remained low. He stressed the
seriousness of the deficit and referred to comments by
Legislative Finance Director David Teal, "we cannot cut our
way out of this budget deficit." Sooner or later revenue
generating measures would need to be seriously considered.
4:08:23 PM
Senator Dunleavy thanked the committee for all of their
hard work. He opined that the collapse in oil prices had
led to the state's fiscal crisis. He worried that the
recent deal struck between the U.S. and Iran, to prevent
Iran from acquiring a nuclear weapon, could lead to more
oil production for Iran, which would hurt the Alaskan
market. He expressed concern that strategic oil reserves
across the world were being filled to capacity. He relayed
that when oil prices dropped in 1989, the state's
government was smaller. He thought that the current fiscal
climate offered an opportunity to explore diversification
of the state's portfolio. He understood that the budget
cuts would affect all Alaskans.
4:12:57 PM
Senator Olson mentioned the possibility of other revenue
sources for the state. He understood that taxes made people
uncomfortable, but thought that they should be considered.
He echoed Senator Hoffman's relief that the cuts had been
equitable between rural and urban area of the state.
4:15:25 PM
Co-Chair MacKinnon MOVED to REPORT CSHB 72(FIN) as amended
out of committee with individual recommendations, and
instructed legislative legal and legislative finance to
make the necessary technical and conforming changes.
There being NO OBJECTION, it was so ordered.
4:15:54 PM
Co-Chair MacKinnon MOVED to REPORT CSHB 73(FIN) as amended
out of committee with individual recommendations, and
instructed legislative legal and legislative finance to
make the necessary technical and conforming changes.
There being NO OBJECTION, it was so ordered.
CSHB 72(FIN) was REPORTED out of committee with a "do pass"
recommendation.
CSHB 73(FIN) was REPORTED out of committee with a "do pass"
recommendation.
4:16:29 PM
AT EASE
5:00:54 PM
RECONVENED
Co-Chair MacKinnon took back the gavel.
5:00:57 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB71 Sectional Analysis.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Sponsor Statement.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support AK Pharmacists Assn.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Bd of Pharmacy.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Emails 3-19-15.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Brown 3-13-15.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Garrison.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Island Pharmacy.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support NACDS.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Ron's Apothecary 3-13-15.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Safeway.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB71 Support Soden 3-23-15.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 71 |
| SB 86 Changes in SB 86 CS.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 86 |
| SB 86 CS LC Sectional.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 86 |
| SB 86 Supporting Documents - DEC Active Contaminated Sites.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 86 |
| SB 86 Supporting Documents - DEC All Products Spilled FY10-14.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 86 |
| SB 86 Supporting Documents - DEC All Products Spilled FY14.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 86 |
| HB 72 Amendment 25.pdf |
SFIN 4/2/2015 1:30:00 PM |
HB 72 |
| HB 72 Amendment 26.pdf |
SFIN 4/2/2015 1:30:00 PM |
HB 72 |
| HB 72 Amendment 24.pdf |
SFIN 4/2/2015 1:30:00 PM |
HB 72 |
| SB 86 - Work Draft version F.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 86 |
| SB 86 Fund Transfer SFC 4-2-15.pdf |
SFIN 4/2/2015 1:30:00 PM |
SB 86 |