Legislature(2011 - 2012)HOUSE FINANCE 519
02/28/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB108 || HB109 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 108 | TELECONFERENCED | |
| += | HB 109 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 28, 2011
1:40 p.m.
1:40:55 PM
CALL TO ORDER
Co-Chair Thomas called the House Finance Committee meeting
to order at 1:40 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
Representative Bryce Edgmon
ALSO PRESENT
Representative Mike Chenault; Peter Ecklund, Staff,
Representative Bill Thomas; Karen Rehfeld, Director, Office
of Management and Budget, Office of the Governor.
SUMMARY
HB 108 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 108 was HEARD and HELD in committee for
further consideration.
HB 109 APPROP: MENTAL HEALTH BUDGET
HB 109 was HEARD and HELD in committee for
further consideration.
HOUSE BILL NO. 108
"An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; and providing for
an effective date."
HOUSE BILL NO. 109
"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."
1:41:03 PM
Vice-chair Fairclough MOVED to ADOPT Committee Substitute,
Work Draft CSHB 108(FIN) 27-GH1737\E (Bailey, 2/28/11) as a
working document before the committee. There being NO
OBJECTION, it was so ordered.
Vice-chair Fairclough MOVED to ADOPT, Committee Substitute,
Work Draft CSHB 109(FIN) 27-GH1738\B (Bailey, 2/26/11) as a
working document before the committee. There being NO
OBJECTION, it was so ordered.
1:42:47 PM
PETER ECKLUND, STAFF, REPRESENTATIVE BILL THOMAS, discussed
the highlights of CSHB 108(FIN). He relayed that detailed
budget subcommittee reports had been posted on the
Legislative Finance Division website. The budget
subcommittees had reduced the governor's amended budget in
the amount of $18,473,900 in general funds. He discussed
that between the agencies and the statewide components that
reductions in the bill equaled $8,970,202,200 and were
$29,830,000 less than the governor's amended request. The
CS authorized $1,099,426,000 in transfers and was
approximately $49,600,000 less than the governor's request.
He pointed to the language section of the operating budget
that had been rearranged to reflect a more logical order.
He explained that the CS included minor modifications to
additional sections and several other changes. Including
the language section, the general fund was $20,022,400 less
than the governor's request. He reviewed several of the
larger items that were included in the language section of
the bill. He discussed that the governor's fuel trigger had
a base of $50 with a budget that was based on approximately
$83 per barrel oil. Section 20 of the CS would increase the
minimum trigger to $64 and would result in the spread of
$9.5 million of fuel general fund money into the
departments' base budgets within the number section of the
bill. The change used the same allocation that the Office
of Management and Budget (OMB) had used in the past. The
supplemental budget had included an exception related to a
$4 million reappropriation request from the Alaska Marine
Highway System (AMHS), Department of Transportation and
Public Facilities that would apply excess fuel revenue
towards maintenance and operations of vessels; therefore,
the fuel trigger had been reduced by $4 million.
Mr. Ecklund directed attention to the Public Education Fund
in Section 24 (e) and explained that the CS fully funded
the FY 13 K-12 need based on the foundation formula;
however, the CS transferred approximately $49 million less
in order to avoid a fund surplus of $56 million to $57
million. The appropriation would still fully fund K-12
education in FY 13, but the surplus would be reduced to $11
million or one percent. He opined that the allocation
should be adequate. The governor's amendment for Federal
Medical Assistance Percentage (FMAP) backstop language had
been added in Section 14(b). The appropriation of
approximately $129,400,000 from the general fund would be
necessary if the federal law and the FMAP rate did not
change. He delineated that the $129.4 million was not
included in the current report and subsequently would
represent an increase to the budget. He moved to Section 12
(e), Page 59, related to the Alaska Seafood Marketing
Institute (ASMI). The supplemental had included a request
to replace $4.6 million in ASMI receipts, for processor tax
collections for marketing, with general funds. Currently
the agency determined its future marketing budget by
projecting how many federal receipts and self-assessment
tax collections it would have and general funds were added
to the number. The governor had proposed $6.5 million to
fund the agency in FY 12. The CS used the actual $7.7
million that had been collected by industry for marketing
in FY 10 instead of using projections of future tax
collections. The CS language mirrored the Alaska Travel
Industry Association (ATIA) QTA statutory language that
provided a fifty-fifty match with industry and matched the
$7.7 million of general funds from ASMI's FY 10
collections. He detailed that there would be carry-forward
from actual receipts from FY 11 and FY 12 in the amount of
$5.5 million if the supplemental was approved.
Additionally, the bill authorized ASMI to expend 20 percent
or $1.5 million of the FY 10 collections.
1:52:18 PM
Mr. Ecklund detailed that the goal was to move away from
funding based on projections and towards matching the most
current actuals on a dollar-per-dollar basis. The receipts
would roll forward if the agency collected more in a fiscal
year than it was authorized to expend. The change would
help give the agency more stability in its marketing
program from year-to-year and would allow it to plan future
marketing strategies without requesting supplemental
general funds. Intent language expressed that the state was
willing to match up to $9 million in industry collections
and the agency would carry the money forward if the
industry brought in more than $9 million.
Mr. Ecklund discussed that the CS removed a $9 million ATIA
QTA appropriation from the numbers section and moved it to
the language section (Section 12 (g)). He explained that
the same model would be used for ATIA as was proposed for
ASMI. The proposal was to match industry collections that
had been $3,045,000 in FY 10. The agency could not increase
its contributions for FY 10 because it had not known that
the legislature would move to the new methodology.
Additional funding of $5,954,600 was available to the
agency for FY 12 through the QTA dollar-for-dollar match.
He expounded that the language section used the same
mechanism and level of appropriation as the numbers
section, but it was split out slightly differently. He
added that the ASMI appropriation had been moved from the
numbers section to the language section of the CS.
Co-Chair Stoltze hoped that a collective effort would
produce a better solution to help the tourism industry with
the challenges that it faced. He did not want the funding
to come from the capital budget.
Co-Chair Thomas agreed. He thought that the appointment of
a task force for ATIA would be helpful. He discussed a
similar task force had been appointed for salmon fishing
that had assessed the fishermen at about seven percent. He
noted that in the meantime the legislature was bound by law
to follow the specific equation.
1:57:51 PM
Representative Gara asked whether funding related to
Medicaid school receipts had been forgone because there
were schools that had not applied for the receipts
correctly. Additionally, he wondered how strongly the
tourism industry taxed itself to fund its share of tourism
marketing. He suggested looking at the industry the
following year to determine the amount of funds that were
contributed by the industry and whether a fifty-fifty match
was deserved.
Mr. Ecklund asked whether Representative Gara was referring
to Medicaid school-based claims.
Representative Gara explained the legislature had
"backfilled" funding because school districts had not
properly applied for the money. Mr. Ecklund replied there
was approximately $5.6 million in Medicaid school-based
claims that a few districts had applied for. The CS
proposed moving the entire funding amount to the districts
that applied, whereas, currently half of the funding went
to schools that applied and the remaining funds went to the
K-12 formula.
Representative Gara asked whether school districts were
following through on their promise to do a better job
applying for the Medicaid school-based claim funding in the
current year. He thought the large debate that had occurred
the prior year had been centered on backfilling funds that
school districts had not applied for. Mr. Ecklund needed
clarity on the question.
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, verified that the debate had been
related to Medicaid school-based claims. She relayed that
the Department of Health and Social Services (DHSS) and the
Department of Education and Early Development (DEED) had
been working to increase the level of school involvement in
the program. She believed that the CS would direct the
received funds to the participating districts.
Mr. Ecklund agreed.
Representative Gara wondered whether more districts had
submitted applications, which would prevent the loss of
federal funding. Ms. Rehfeld responded that the departments
were working hard to make sure that districts were
submitting their applications. The departments would need
to provide specifics related to progress that had been made
from the prior year.
Representative Gara asked whether the state was funding as
much foregone federal funding as it had the prior year. Ms.
Rehfeld replied that there was not a backfill request for
the current year.
Co-Chair Stoltze wondered what it would take to get the
school districts to apply. He discussed that both Anchorage
and Matanuska-Susitna had large school districts with
numerous employees and that the schools should have no
problem applying.
2:04:29 PM
Ms. Rehfeld believed that Anchorage and Mat-Su were both
participating in the direct services portion of the
program. She relayed that there was also an administrative
portion of the program and that DEED would be able to
provide more detail.
Representative Doogan asked whether language on Page 61
would backfill $129.4 million for DHSS. Mr. Ecklund
responded in the affirmative. The language would backfill
the shortage of federal funds with general funds if the
FMAP rate was not changed.
Representative Doogan wondered when the state would know
whether FMAP funds would be available. Mr. Ecklund deferred
the question to Ms. Rehfeld.
Ms. Rehfeld did not know when the state would find out
whether the FMAP extension would occur.
Representative Doogan asked whether the "drop-dead" date on
the FMAP extension was July 1, 2011. Ms. Rehfeld responded
in the affirmative.
Representative Gara was concerned about the $129.4 million
in the governor's budget. He believed it was a deficit and
that it would require a law change by Congress in order to
ensure the state would receive the money.
2:07:32 PM
Co-Chair Thomas noted that the money had not been included
in the CS in order to reduce the size of the budget.
Representative Neuman wondered whether the intent in the CS
was to provide slightly less funding than ATIA had
requested and to require almost double or triple the amount
the agency had previously provided. He liked the approach
that included a set amount for the agency and the matching
requirement.
Co-Chair Thomas answered in the affirmative. He noted that
the CS followed the law that stated the match would be
fifty-fifty by July.
Representative Doogan opined that the legislature should
not pass a budget with a $129 million hole in it that would
be present in the absence of federal funding.
Mr. Ecklund clarified that the appropriation would occur if
the federal law did not change. He noted that the money was
currently not included in the Finance Committee report or
the governor's report because the outcome regarding federal
funding was not yet known.
HB 108 was HEARD and HELD in committee for further
consideration.
HB 109 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 2:12 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB108 CS WORKDRAFT versionE.pdf |
HFIN 2/28/2011 1:30:00 PM |
HB 108 |
| HB109 CSWORKDRAFT versionB.pdf |
HFIN 2/28/2011 1:30:00 PM |
HB 109 |
| HB108 Budget Summary HFIN CS to Gov Request.pdf |
HFIN 2/28/2011 1:30:00 PM |
HB 108 |
| HB108 Budget Summary Subcommittee.pdf |
HFIN 2/28/2011 1:30:00 PM |
HB 108 |