Legislature(2013 - 2014)SENATE FINANCE 532

02/15/2013 09:00 AM Senate FINANCE


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09:06:22 AM Start
09:07:21 AM SB18 || SB19 || SB20 || SB42 || PRESENTATION BY OFFICE OF MANAGEMENT AND BUDGET: FY 2014 BUDGET AMENDMENTS
09:42:11 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Office of Management & Budget TELECONFERENCED
Karen Rehfeld
FY 2014 Budget Amendments
Bills Previously Heard/Scheduled
^PRESENTATION BY OFFICE OF MANAGEMENT AND BUDGET: FY 2014                                                                     
BUDGET AMENDMENTS                                                                                                             
                                                                                                                                
SENATE BILL NO. 18                                                                                                            
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations   and   other   appropriations;   making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
SENATE BILL NO. 19                                                                                                            
                                                                                                                                
     "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."                                                                                          
                                                                                                                                
SENATE BILL NO. 20                                                                                                            
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
SENATE BILL NO. 42                                                                                                            
                                                                                                                                
     "An  Act  making supplemental  appropriations,  capital                                                                    
     appropriations,  and   other  appropriations;  amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:07:21 AM                                                                                                                    
                                                                                                                                
KAREN REHFELD,  DIRECTOR, OFFICE  OF MANAGEMENT  AND BUDGET,                                                                    
OFFICE  OF THE  GOVERNOR  (OMB), stated  that  she would  be                                                                    
presenting  amendments for  SB 42,  SB  19, and  SB 18.  She                                                                    
referred  to documents:  "Governor Amended  Fiscal Summary",                                                                    
"FY   2013  Supplemental   Summary",  "FY2013   Supplemental                                                                    
Amendments",  "FY 2014  Governor  Amended Summary",  "FY2014                                                                    
Capital  Amendments",  and   "FY2014  Operating  Amendments"                                                                    
(copies on file).                                                                                                               
                                                                                                                                
Ms.   Rehfeld  presented   the   "Governor  Amended   Fiscal                                                                    
Summary."  The spreadsheet  compared the  governor's budgets                                                                    
in FY 14  versus FY 13; and stated that  OMB had updated the                                                                    
current  year's  fiscal summary.  She  pointed  out line  3,                                                                    
which  was a  revenue adjustment  of $48.9  million for  the                                                                    
"Carlson Case." She  explained that there had  been an issue                                                                    
with the differentials between what  was charged for instate                                                                    
and  non-resident fisherman  for commercial  fisheries entry                                                                    
licenses. There was an appropriation  of over $82 million as                                                                    
a  settlement,  but the  State  appealed  that decision.  In                                                                    
December,  the  State  was awarded  back  $49  million.  The                                                                    
Department of Revenue (DOR) would  include that money in the                                                                    
spring forecast.  She highlighted  line 10, and  pointed out                                                                    
the  numbers   that  were   specifically  on   the  December                                                                    
operating  budget   fiscal  summary;  line  11   showed  the                                                                    
supplemental requests  as of January  28, 2013; and  line 12                                                                    
displayed the  February 12, 2013  amendments. Lines  10, 11,                                                                    
and 12 were intended to  help the legislature track changes.                                                                    
She looked at  line 37, and stated that  the December budget                                                                    
contained  a $40  billion  "place holder"  for  FY 13.  That                                                                    
place  holder  had  been  removed to  build  in  the  actual                                                                    
supplemental  requests.  She  added   that  in  FY  14,  OMB                                                                    
adjusted the  $40 million place  holder to $20  million. She                                                                    
stressed that  there was  an overall  intention to  slow the                                                                    
growth of government, and have  each department manage their                                                                    
budgets  with the  funding that  would be  appropriated. She                                                                    
looked at line 68, which  displayed a change in the estimate                                                                    
of the  draw that would be  required in FY 13.  The December                                                                    
fiscal  summary   contained  $410  million  draw,   and  was                                                                    
currently reduced to  $322.9 million. She pointed  to the FY                                                                    
14 side of the fiscal  summary, and stated that the proposed                                                                    
amendments  would  reduce  the   amount  of  the  governor's                                                                    
spending plan  by approximately $19  million. She  looked at                                                                    
line 7, which showed a 1.2 percent operating budget change.                                                                     
                                                                                                                                
Co-Chair  Kelly  asked  for clarification  of  line  7.  Ms.                                                                    
Rehfeld responded that the comparison  point on the December                                                                    
fiscal  summary showed  a FY  13 number  that was  different                                                                    
than the current fiscal summary percentage.                                                                                     
                                                                                                                                
Ms. Rehfeld  looked at "FY  2013 Supplemental  Summary." The                                                                    
top portion of the document  represented the total for SB 42                                                                    
as presented  on January 28,  2013. The original  version of                                                                    
SB  42  totaled  $24.456 million.  The  proposed  amendments                                                                    
added $2.365  million. The total supplemental  bill would be                                                                    
$26.821 million, with the proposed amendments.                                                                                  
                                                                                                                                
Co-Chair Kelly requested that the  presentation focus on the                                                                    
general fund (GF).                                                                                                              
                                                                                                                                
Ms.  Rehfeld  looked   at  "FY2013  Supplemental  Amendments                                                                    
Submitted February  12, 2013." Line  1 was the FY  13 Alaska                                                                    
Correctional Officers  Salary and Benefits Increase,  with a                                                                    
total GF  request at  $1.244 million. Line  2 was  a formula                                                                    
program under  the Department of Health  and Social Services                                                                    
(DHSS)  for  subsidized  adoptions;  which  was  a  mandated                                                                    
change  from the  Federal Child  Welfare  Agency for  foster                                                                    
care participation rates. The  federal funds were reduced by                                                                    
$2.5 million, so  the GF would add $2.5  million to continue                                                                    
the  program. Lines  3  and  4 were  requests  for a  carry-                                                                    
forward  of the  current year  redistricting appropriations.                                                                    
After  the budget  was submitted  in December,  there was  a                                                                    
court decision  to reexamine the redistricting  work. Line 5                                                                    
represented a request for $106,200  for a settlement related                                                                    
to  the  Kuspuk School  District;  and  a contaminated  site                                                                    
clean-up for the Aniak Vocational School.                                                                                       
                                                                                                                                
9:17:00 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld announced that the  government of Japan provided                                                                    
$5 million to the United  States for tsunami debris cleanup;                                                                    
with  an  anticipation  of   approximately  $1  million  for                                                                    
cleanup in Alaska.                                                                                                              
                                                                                                                                
Ms.  Rehfeld looked  at "Governor  Amended Fiscal  Summary."                                                                    
She  stated  that  the total  amended  request  was  $16.179                                                                    
million, which  included both  operating budget  and capital                                                                    
budget changes.  The amended  operating budget  displayed an                                                                    
overall  reduction  of  almost  $11  million,  including  $3                                                                    
million reduction in GF.                                                                                                        
                                                                                                                                
Ms. Rehfeld  looked at, "FY2014 Operating  Amendments." Line                                                                    
4  represented  a  technical correction  for  Department  of                                                                    
Commerce,  Community   and  Economic   Development  (DCCED);                                                                    
because  the  same  dollar  amount  had  been  inadvertently                                                                    
removed twice.  Line 5 was the  FY 14 amount for  the Alaska                                                                    
Correctional Officer's bargaining  unit agreement; 2 percent                                                                    
was built  into the base,  and 2  percent for the  full year                                                                    
cost for the geographic differential.  Line 6 was a $305,000                                                                    
request   for  Mt.   Edgecumbe  Boarding   School  dormitory                                                                    
management  contract   costs.  There  were   several  recent                                                                    
increase  costs  for Mt.  Edgecumbe,  and  this request  was                                                                    
beyond the  Department of Education and  Early Development's                                                                    
(DEED) management ability.  Lines 7 and 8  were requests for                                                                    
the  Pioneer  Homes  for  unrealized  revenue  coupled  with                                                                    
increased costs  for food services, laundry,  and janitorial                                                                    
services.                                                                                                                       
                                                                                                                                
Senator Dunleavy  queried the  cost per  student in  the Mt.                                                                    
Edgecumbe  dormitory. Ms.  Rehfeld  agreed  to provide  that                                                                    
information.                                                                                                                    
                                                                                                                                
Ms.  Rehfeld looked  at line  10,  which was  a request  for                                                                    
security  upgrades  in  the  Anchorage  Office  of  Children                                                                    
Services. Line  12 was a  $2.110 million  formula adjustment                                                                    
for  foster  care  rates,  and  a  component  related  to  a                                                                    
settlement  of  a lawsuit.  Line  13  was the  $2.5  million                                                                    
formula  change  for  the   calculation  rate;  because  the                                                                    
federal  funds were  no longer  available.  She pointed  out                                                                    
lines  15  through  20, which  were  related  to  department                                                                    
structural changes.  Line 22  was a  $163,800 request  for a                                                                    
radio dispatcher  class study. Line  26 was a  $1.75 million                                                                    
request for  the redistricting board,  and was  a multi-year                                                                    
appropriation.  Line  27  displayed  a  decrement  of  $17.3                                                                    
million  for debt  service to  the  general obligation  (GO)                                                                    
bonds; because  the DOR updated their  debt service estimate                                                                    
based on  the timing and rates  at which the bonds  would be                                                                    
sold. Line  28 was a  request to capitalize  the Sustainable                                                                    
Energy Transmission  and Supply Development (SETS)  Fund; to                                                                    
transfer  $125  million  from  the  Alaska  Housing  Capital                                                                    
Corporation  into the  SETS Fund.  Line 29  was an  $800,000                                                                    
decrement, specific  to the  fund transfer  for the  Oil and                                                                    
Hazardous Substance Release Prevention and Response Fund.                                                                       
                                                                                                                                
9:27:27 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:29:33 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:29:41 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  looked at "FY2014  Capital Amendments."  Line 2                                                                    
was a  $727,000 reappropriation  from the  Major Maintenance                                                                    
Grant  List  for a  Tununak  K-12  School major  maintenance                                                                    
project. She  stated that there  were four new  requests for                                                                    
federal   receipts  related   to   projects  that   recently                                                                    
completed  the  STIP  amendment  process,  and  the  capital                                                                    
amendments included the grants  under the National Petroleum                                                                    
Reserve (NPR) Alaska Grant Program.                                                                                             
                                                                                                                                
Senator  Dunleavy  wondered  if  there was  a  reduction  in                                                                    
federal  funds for  the NPR.  Ms. Rehfeld  replied that  the                                                                    
dollar  amount  in  the  initial   budget  proposal  was  an                                                                    
estimate.  She furthered  that  DCCED  worked directly  with                                                                    
communities  in  the  impacted   areas  for  the  NPR  grant                                                                    
allocations.  Once DCCED  refined the  process, OMB  refined                                                                    
the appropriation amount.                                                                                                       
                                                                                                                                
SB  18  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB  19  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB  20  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB  42  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:32:50 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:32:59 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:36:39 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly discussed the week's schedule.                                                                                   
                                                                                                                                
Co-Chair Meyer announced the following week's schedule.                                                                         
                                                                                                                                
Vice-Chair  Fairclough   expressed  concern   regarding  the                                                                    
effect of inflation on  individuals' incomes. Co-Chair Kelly                                                                    
agreed to address that issue at a later meeting.                                                                                
                                                                                                                                

Document Name Date/Time Subjects
FY2013_Supplementals_2-12-2013_Amendments.pdf SFIN 2/15/2013 9:00:00 AM
FY2014_Capital_Amend_Spreadsheet.pdf SFIN 2/15/2013 9:00:00 AM
FY2013_Supplementals_Submitted_February_12_2013_Summary.pdf SFIN 2/15/2013 9:00:00 AM
FY2014_Gov_Amend_Summary.pdf SFIN 2/15/2013 9:00:00 AM
FY2014_Governor_Amended_Fiscal_Summary.pdf SFIN 2/15/2013 9:00:00 AM
FY2014_Operating_Amend_Spreadsheet.pdf SFIN 2/15/2013 9:00:00 AM