Legislature(2003 - 2004)
03/03/2004 02:25 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 03, 2004
2:25 PM
TAPE HFC 04 - 41, Side A
TAPE HFC 04 - 41, Side B
CALL TO ORDER
Co-Chair Harris called the House Finance Committee meeting
to order at 2:25 PM.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
None
ALSO PRESENT
Linda Perez, Director, Administrative Services, Office of
the Governor; Tom Irwin, Commissioner, Department of Natural
Resources; Nico Bus, Acting Director, Division of
Administrative Services, Department of Natural Resources;
Pete Kelly, University of Alaska; Pam Varni, Executive
Director, Legislative Affairs Agency
PRESENT VIA TELECONFERENCE
None
GENERAL SUBJECT(S):
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 23rd Legislative Session, contact 465-
2156. After the 23rd Legislative Session they will be
available through the Legislative Library at 465-3808.
Department Responses to HFC FY05 Budget Recommendations:
Law
Court System
University
Governor
Legislature
LOG SPEAKER DISCUSSION
TAPE HFC 04 - 41
SIDE A
000 LINDA PEREZ, Explained that the majority of the
DIRECTOR, increase in the Office of the Governor's
ADMINISTRATIVE budget is due to the transfer of the
SERVICES, OFFICE OF Office of International Trade from
THE GOVERNOR Department of Community and Economic
Development. There have also been general
fund increments for additional employer
costs of 5 percent.
126 Ms. Perez Discussed the three budget amendments,
which relate to the transfer of the
Office of International Trade. There is a
net increase of $119 thousand.
197 Representative Croft Questioned the justification for a 20
percent increase in the Office of the
Governor.
236 Ms. Perez Reiterated that the majority of the
increase in the Office of the Governor's
budget is due to the transfer of the
Office of International Trade from
Department of Community and Economic
Development. There is also a $2.3 million
for the statewide primary and election.
241 Representative Croft Questioned if there have been decreases.
258 Ms. Perez There have been small decreases. There is
also a 5 percent increase for PERS.
311 Representative Croft Clarified that PERS would be fully
funded.
DEPARTMENT OF NATURAL RESOURCES
504 TOM IRWIN, Commented on reductions to the
COMMISSIONER, Department's budget. He expressed his
DEPARTMENT OF pride in the department's accomplishments
NATURAL RESOURCES and pointed out that the state's future
resides in resource development.
635 Commissioner Irwin Emphasized that the department is
focusing on natural gas pipeline, which
is Alaska's future. He reviewed some of
the department's accomplishments. He
emphasized the need for more exploration.
1048 Commissioner Irwin Discussed reductions to the
Commissioner's office. He noted that a
second deputy commissioner was added to
take care of oil and gas issues. This
position is on the Stranded Gas
negotiation team. The other deputy
commissioner handles the other activities
of the department.
1229 Co-Chair Harris Questioned what would not be funded with
the $650 thousand reduction.
1245 Commissioner Irwin Noted that one of the deputy
commissioners would not be funded at $140
thousand. He added that the special
assistant/legislative liaison would also
be eliminated.
1314 Representative Croft Observed that there is no general fund
left in the Commissioner's office.
1425 Commissioner Irwin Agreed and pointed out that the impact
without leadership is not the way to run
a business.
1431 Representative Stressed that the funds can be move
Chenault within the department. The intent was to
find a 10 percent reduction. He spoke in
support of the Subcommittee's
recommendations.
1555 Representative Croft Concluded that the reduction was
unallocated.
1620 Commissioner Irwin Maintained that the impact would be felt
regardless of where it is taken. He spoke
in support of the Governor's proposed
budget.
1656 Co-Chair Harris Observed that the department's budget
contains $45 million in general fund as
proposed by the Governor. The
Subcommittee reduced the proposal by $3.5
million.
1743 Mr. Bus Reviewed the reduction to the
Administrative Services Division. He
stressed that the department has tried to
create efficiencies in past years and
would have a hard time absorbing the
reduction.
1852 Co-Chair Harris Clarified that the reduction was not
considered as a department wide
reduction.
1918 Representative Croft Questioned if the PERS increase was
funded.
Bus Clarified that they did not receive
additional funds for the general fund
portions of the department.
1930 Mr. Bus Spoke to the reduction in the Information
Resources Management component. He
emphasized the importance of the work
done within the component.
2014 Commissioner Irwin Discussed the Oil and Gas Development
component. He stressed the importance of
the component and observed that the
department would have to decide if the
reduction should be spread or if projects
should be dropped.
2120 Commissioner Irwin In response to a question by Co-Chair
Harris, Commissioner Irwin reviewed the
activities of the Division. The Division
must be able to defend the state of
Alaska's position regarding agreements
and payments from oil companies.
2236 Co-Chair Harris Questioned if the department utilized
contract work.
2241 Commissioner Irwin A lot of the data is done in house due to
confidentiality issues.
2314 Vice-Chair Meyer Agreed that observed the need to find a
balance between contracts in the need to
protect confidentiality. He questioned
what is being done to attract more oil
companies to the state.
2416 Commissioner Irwin Companies need to know that the state is
serious. The department provides reports
and data to companies. Oil and Gas are
the state's revenue opportunities.
2625 Vice-Chair Meyer Referred to North Slope projects. He
agreed that in house staff should be
utilized when confidentiality is an
issue, but observed that outside
contracts take advantage of the greatest
expertise.
2657 Commissioner Irwin Noted that there were 4 - 5 projects on
the North Slope. He thought that there
would be 8 - 9 projects tied into Cook
Inlet. The legislature needs to provide
incentives and there needs to be access.
2744 Commissioner Irwin Observed that the Alaska Coastal
Management Program was transferred to the
department and noted that almost 50
percent loss in positions. The rate of
pay was reduced for many positions. The
ACMP has function despite of these
reductions and are on schedule. He noted
that it is hard to find competent
personal at the pay scales offered.
Observed that the impact of $116 thousand
would cost four more positions in the
Alaska Coastal Management Program. There
would be an automatic increase from 50 to
90 days for permit reviews. Noted that
reviews would be a 25 percent cut in
project review coordinators. There would
be 215 fewer reviews out of 860 done in
the last year. He spoke to funding on
expedited reviews.
3142 Commissioner Irwin Discussed fund switch of large project
permitting from GF to the Land Disposal
Income Fund.
3302 NICO BUS, ACTING Discussed the $542 thousand reduction in
DIRECTOR, DIVISION Claims, Permits and Leases. Claims would
OF ADMINISTRATIVE be slowed down by the proposed
SERVICES, DEPARTMENT reductions. Leasing and permitting would
OF NATURAL also be adversely affected. This is a
RESOURCES, significant reduction.
3430 Mr. Bus Reviewed reductions to the Title
Acquisition and Defense component of $106
thousand. He observed that there would be
longer processing time for industry
seeking to use the state's resources.
User fees do not support this component.
There would be an increase in backlog
time on title reports processing. Fund
source change would significantly reduced
hydroelectric project support.
3608 Mr. Bus Reviewed the reduction to the Forest
Management and Development component. The
reduction would result in a 12 percent
reduction in offerings by the state,
which would result in fewer sales and
less income to the state. Inspections
would be down by 7 percent and training
would be reduced, increasing the risk of
violations. Training of 12 interims from
the Anchorage School District would also
be impacted.
3837 Co-Chair Harris Questioned how much forestry work is done
in the state of Alaska.
3846 Mr. Bus Observed that the Governor has been
working to support the issue. He noted
that the state offers as much as the
federal government and has meet its
goals.
3907 Co-Chair Harris Asked if there would be more
concentration on opening the Tongass
National Forest for logging?
3922 Commissioner Irwin Affirmed and stressed that there is
potential of success.
4001 Co-Chair Harris Noted the importance of expanding the
state's timber industry.
4030 Commissioner Irwin Agreed and noted that work is going on in
Southeast Alaska on starting a veneer
plant.
4041 Mr. Bus Reviewed the reduction to the Geological
Development component. He noted that
engineering geologists would be impacted,
which would expose the state to risk.
Geological maps and reports for industry
would also be impacted.
4223 Co-Chair Harris Asked if aerial mapping for mining has
been proposed.
4229 Mr. Bus Noted that there is a $200 thousand
capital request.
4241 Mr. Bus Discussed the reduction to the
Agricultural Development component, which
would delete funding for the seed potato
project, $120 thousand. The Governor
asked for an increment.
4325 Co-Chair Harris Observed that one position is responsible
for the program and questioned what would
happen if that person retired.
4354 Mr. Bus Stressed that there are others that
support the position and expressed the
hope that it would continue.
4418 Mr. Bus Reviewed the funding switch in Fire
Suppression. He noted that an increment
of $250 thousand was requested for heavy
air tanker contracts. This would take
away air tanker support, which could
result in higher suppression costs.
4455 Mr. Bus Reviewed the reduction to state parks. He
observed that the discussions have
occurred and concluded that the transfer
to public support is too much too fast.
He pointed out that closures in 14 more
units would have to be considered.
Revenues would be loss and health and
safety issues would arise from the
reductions.
TAPE HFC 04 - 41, Side B
4630 Representative Joule Asked if federal funds would be lost due
to the reductions.
4536 Mr. Bus Affirmed that there would be impacts from
the reductions; the Coastal program would
lose almost 50 percent.
4449 Mr. Bus Discussed the Governor's proposed budget
amendments. He discussed line item 97,
$10 in federal funds from the National
Park Service to assist in ANILCA.
4419 Mr. Bus Reviewed Item 98, $637,800 GF in the
Office of Habitat Management and
Permitting to replace unrealized inter-
agency receipts and designated program
receipts. Staffing was reduced and
anticipated statutory designated program
receipts were not realized.
4230 Co-Chair Harris Concluded that Department of Fish and
Game sent positions without funding.
4211 Mr. Bus Responded that the total budget is $3.6
million. They need $600 thousand more. He
observed that the department anticipated
that the personnel would be transferred
at an entry level, which did not occur.
4032 Mr. Bus Discussed Item 99, $125 thousand in
Claims, Permits, Leases for the expansion
of Bureau of Land Management survey
agreement in Bristol Bay.
4009 Mr. Bus Reviewed Item 100, $35 thousand for a new
project with US Fish and Wildlife and is
all federal funds.
3953 Mr. Bus Observed that Item 101 would provide $80
for the seed potato program.
3941 Mr. Bus Discussed Item 102, $150 thousand GF to
buy scientific assessments to collect
research.
3900 Co-Chair Harris Questioned how ANWR funding would be
utilized.
3847 Mr. Bus The Governor would like the state to have
an opinion on various issues relating to
ANWR.
3817 Co-Chair Harris Questioned if a lack of research was at
issue in regards to would change the
outcome.
UNIVERSITY OF ALASKA
3735 Co-Chair Harris Observed that funding for University of
Alaska has remained the same. The
Committee is contemplating funding in the
capital budget.
3701 PETE KELLY, Acknowledged that there has been a
UNIVERSITY OF ALASKA commitment not to reduce the budget from
the FY 04 amount, but stressed that there
has been an increase in students. There
has been a 36 percent increase in
enrollment in the last four years. There
were 2,000 extra in the last two years.
3795 Mr. Kelly Observed industry has contributed to
program support, which has allowed the
university to be competitive.
3357 Mr. Kelly He felt that programs would be
jeopardized if they were forced to cut
back, which would result in the loss of
students and faculty.
3300 Mr. Kelly Loss in research funding would result in
a loss of federal funding and faculty.
Co-Chair Harris Clarified that $8.8 is needed to cover
increases on PERS and TRS and $10.6 to
remain even on operations.
3208 Mr. Kelly Stressed that some inflationary costs
would still not be included.
3036 Co-Chair Harris Asked if changes to the retirement system
would provide relief.
3024 Mr. Kelly Explained that the changes to the
retirement system would be a long-term
impact. There would be no benefit in
short term. They university went to a
Tier IV plan.
LEGISLATIVE AFFAIRS AGENCY
2903 PAM VARNI, EXECUTIVE Observed that the proposed Subcommittee
DIRECTOR, budget represents a 6.3 percent reduction
LEGISLATIVE AFFAIRS from the Governor's budget. She observed
AGENCY that the Legislative Affairs Agency's
request represented an $889 thousand
request. She observed that data
processing was reorganized and a full
time position was eliminated in the LIO.
2701 Ms. Varni Noted that a one-time item for the Joint
Legislative Salmon Task Force of $177
thousand was eliminated. In addition,
removing the Alaska Energy Task Force
eliminated $78 thousand, $538 was
eliminated from the Council of State
Governments annual meeting.
2638 Ms. Varni There was a $14.4 decrease in legal and
research services due to the retirement
of two long-term attorneys. There is a
small increase of $1,800 to the Ethics
Committee for personal services.
2628 Representative Croft Noted that there was a decrement of $1
million in legal expenses for
redistricting and questioned why it was
kept in the FY 04 base.
2604 Ms. Varni Responded that there were no expenses and
that the money would be lapsed at the
Chairman's request.
2525 Representative Croft Questioned if PERS expenses were
included.
2517 Ms. Varni Clarified that the PERS funding was
included at a cost of $1.173 in the
Legislative Affairs Agency budget.
ADJOURNMENT The meeting was adjourned at 3:35 PM
| Document Name | Date/Time | Subjects |
|---|