Legislature(2023 - 2024)ADAMS 519
01/22/2024 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Overview of the Governor's Fy 25 Operating Budget by the Office of Management and Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
January 22, 2024
1:35 p.m.
1:35:09 PM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 1:35 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Lacey Sanders, Director, Office of Management and Budget,
Office of the Governor.
SUMMARY
OVERVIEW OF THE GOVERNOR'S FY 25 OPERATING BUDGET BY THE
OFFICE OF MANAGEMENT AND BUDGET
1:36:06 PM
Co-Chair Johnson reviewed the meeting agenda.
^OVERVIEW OF THE GOVERNOR'S FY 25 OPERATING BUDGET BY THE
OFFICE OF MANAGEMENT AND BUDGET
1:36:22 PM
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced herself and noted there
were administrative services directors available online for
any specific questions she was unable to answer. She
provided a PowerPoint presentation titled "State of Alaska
Office of Management and Budget: Overview of the FY2025
Governor's Budget," dated January 22, 2024 (copy on file).
She detailed that the presentation would give a high level
overview of the governor's FY 25 budget. She provided
opening remarks. She relayed that under AS 37.07.020(a) the
governor was required to submit the budget by December 15
of every year.
Ms. Sanders related that Governor Mike Dunleavy released
his current budget on December 14, 2023, which included an
operating appropriation bill, capital budget bill, and
mental health bill. The mental health bill incorporated
capital and operating items specific to the state's
integrative comprehensive mental health programs. She noted
that the numbers in the presentation reflected all three
appropriations.
Ms. Sanders highlighted that the governor's proposed
budgets focused on providing a safe and healthy environment
to keep Alaskan families in the state and promote growth
across the state. Three recurring themes were discussed
during the development of the budget including
affordability, education, and public safety. She stated
that the governor's budget invested in those areas to build
a better Alaska for its current and future generations.
1:39:15 PM
Ms. Sanders began with a table on slide 2 titled "FY2025
Fiscal Summary." The table represented the highest level of
revenues and expenditures for the budget. The left side
reflected the FY 24 budget including supplemental requests
to address any unanticipated or unplanned items during the
current fiscal year. She stated that while supplemental
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requests were due by statute on the 15 day of legislative
session (January 30 in the current year), the governor's
budget included several priority items, which she would
highlight during the presentation.
Ms. Sanders moved to the right side of the table on slide 2
showing the governor's FY 25 proposed budget. She
highlighted a column on the far right side of the slide
reflecting a quick comparison of the two fiscal years for
unrestricted general funds (UGF) only. She pointed out the
four funding categories listed at the top of the table
including UGF, designated general funds (DGF), other, and
federal. The presentation primarily focused on UGF, a
limited revenue source with less restrictions than the
other sources.
Ms. Sanders explained that the fiscal summary on slide 2
was broken out into revenues and expenditures with a
surplus or deficit at the bottom. She began with revenues
at the top of the slide and highlighted that UGF and the
percent of market value (POMV) draw from the [Permanent
Fund] Earnings Reserve Account (ERA) were derived from the
fall 2023 Department of Revenue (DOR) forecast. She would
talk about the items on the following slide. She noted that
DGF, other funds, and federal receipts were all equal to
the governor's proposed expenditures. She explained the
funds required receipts in order to be spent.
Ms. Sanders reviewed that in total the revenue available to
the state was $15.5 billion in FY 24. Total revenue was
slightly less in FY 25 but rounded up to $15.5 billion
(encompassing all fund sources). She relayed that
expenditures were broken out into operating and capital
appropriations. The total FY 24 operating budget was $11.3
billion in all funds. The governor's proposed FY 25 budget
was $10.5 billion. Capital appropriations for FY 24 totaled
$364.8 million and the governor's proposed FY 25 capital
budget was $305 million. The total FY 24 budget was
projected to expend $14.1 billion including supplementals.
The governor's proposed FY 25 budget included expenditures
of $14.1 billion. She noted the change was shown in the
column to the right.
1:43:50 PM
Ms. Sanders continued to review slide 2 and discussed
appropriations for the Permanent Fund Dividend (PFD). The
legislature appropriated $881 million for the PFD in FY 24.
The governor's FY 25 budget included a full statutory PFD
totaling $2.3 billion. She noted that fund transfers were
included in the fiscal summary to highlight funding being
transferred between funds. She explained that the funds
were considered nonadditive as they were transferring
between accounts and funding was not leaving the treasury.
There was a current surplus of $449 million in FY 24 and a
deficit of just under $1 billion [$987 million] in the
governor's proposed FY 25 budget. The budget proposed
filling the deficit with state savings from the Statutory
Budget Reserve (SBR) and Constitutional Budget Reserve
(CBR).
Representative Ortiz asked what made a designated general
fund designated. He asked for some examples.
Ms. Sanders replied that DGF typically had a statutory
restriction on the use of the funds. She explained that
statute had taken an action to use a certain funding source
for a particular purpose. She noted that the legislature
had the authority to use the funds for other purposes
outside of the designation, given a prohibition against
dedicating funds for a purpose. For example, the Higher
Education Investment Fund was designated for educational
purposes and was appropriated by the legislature for those
purposes. She highlighted program receipts as another
example. She detailed that agencies set fees and collected
receipts for various purposes and the receipts should be
used for their intended purpose.
1:46:55 PM
Representative Ortiz drew attention to the CBR balance
[shown at the bottom of slide 2] that went from $2.7
billion to $1.7 billion. He asked for verification that the
decrease in the CBR balance reflected a draw to cover the
deficit of approximately $1 billion.
Ms. Sanders replied affirmatively. She had a later slide
that would provide more detail.
Co-Chair Edgmon liked the all-encompassing nature of slide
2. He noted that one missing element was the supplemental
budget. He highlighted an existing education bill that
would be making its way to the House floor, which would
include some FY 24 and FY 25 funding. He asked what the
committee could expect for the supplemental spending, when
considering the education bill in addition to a
supplemental.
Ms. Sanders replied that the FY 24 supplementals reflected
items the governor had put forward early. She highlighted a
$61 million appropriation for a fire disaster declaration
made earlier in the year, which was reflected in the
numbers in the presentation. There were many other items
that needed to be addressed in the supplemental that would
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be presented to the legislature on January 30. She stated
there were many pieces of legislation that needed to be
considered in addition to the education bill when trying to
determine what the fiscal picture would look like. She
referenced the annual spring forecast [from DOR] that
typically came out in March, which would provide a better
reflection of what revenue would look like. She
characterized the budget and the presentation as a starting
point. She reiterated there were many other factors needing
consideration during the upcoming legislative process.
1:50:11 PM
Co-Chair Edgmon noted the 10 percent change in UGF [between
FY 24 and FY 25] was substantial. He asked for more
information.
Ms. Sanders stated her understanding that Co-Chair Edgmon
was referring to the top line of the table.
Co-Chair Edgmon responded affirmatively.
Ms. Sanders replied that for FY 24, the DOR [2023] fall
forecast projection provided for [an oil price of] $82.39
per barrel, compared to $76 per barrel in FY 25. The
production forecast was 470,300 in FY 24 and 463,800 in FY
25. There was a $300 million UGF reduction [from FY 24 to
FY 25] due to the two combined factors.
Representative Hannan asked about the supplementals line
showing $73 million UGF. She referenced Ms. Sander's
earlier statement that $61 million was for fire disaster.
She highlighted $9 million for SNAP [Supplemental Nutrition
Assistance Program] and $3 million for food banks on slide
12 [slide 7]. She noted the items totaled $73 million. She
asked for verification that the current supplemental was
limited to those items and the supplementals to be provided
by January 30 would include any additional monies.
Ms. Sanders answered that the $8 million for SNAP was
funded with state general funds and federal funds. She
relayed that multiple supplementals had been submitted
including $61 million for the fire disaster declaration,
funding to address the SNAP backlog within the Department
of Health (DOH), and $3 million to the Department of
Commerce, Community and Economic Development (DCCED). She
believed she may have missed an item and would point them
out as she went through the presentation.
1:53:40 PM
Representative Hannan asked what fire disaster declaration
Ms. Sanders was referring to. She noted it was a light fire
year.
Ms. Sanders confirmed it was a lighter fire year; however,
early in the year, the Department of Natural Resources
(DNR) had provided a projection on where it would be in the
current FY 24 year and had provided a letter to the
governor and legislature to declare a disaster to be able
to access up to $61 million in general funds to fight
fires. She explained that firefighters were paid an
incredibly low rate, resulting in a recruitment and
retention issue. She elaborated that the state was having
to bring in firefighters from out of state and pay them a
rate that was 46 percent higher. She detailed that many of
the fires had been on state lands, which did not qualify
for federal reimbursement.
Ms. Sanders shared that OMB continued to work with DNR to
evaluate the department's projected spend, but there had
been a large increase. She noted that OMB worked closely
with the Legislative Finance Division (LFD) to ensure they
were tracking on the same page and to work through any
differences. She added that LFD did not have the item
currently included in its review of the budget because it
was waiting for a technical transaction or change record to
come through. The item had been included by OMB for
transparency.
Co-Chair Johnson remarked that it always became a struggle
when the statutory PFD was included with the POMV draw
because they could not match up and the legislature ended
up trying to fill the hole. She asked why there was not a
draw from the ERA to cover the full statutory PFD. She
reasoned that if there was a statutory PFD it would make
sense to use the statutory funding source.
Ms. Sanders replied that the governor's proposed budget
provided for a statutory PFD of $2.3 billion based on
current statute. The governor's budget also followed the
statute implemented by SB 26 [legislation passed in 2018]
for the POMV ERA draw for government. She detailed that the
money was deposited into the general fund for
appropriations.
1:57:09 PM
Co-Chair Johnson did not see any way of getting to the
number without an additional draw. She noted that it was
often difficult to get sufficient votes for the draw.
Representative Josephson stated it was the governor's
second budget in his second term. He noted the governor
would be writing budgets in the next two years as well. He
acknowledged that budgets and the surrounding circumstances
changed due to things like COVID-19, blizzards, etcetera.
He reasoned that the practice could not continue forever,
because if the legislature "rubberstamped" the current
budget and did it again in the future, the CBR balance
would be down to $700 million. He asked if the
administration intended to offer any proposal "to expand
the pie" and work toward other fiscal solutions in order to
have the ability to sustain budgets like the one under
consideration.
Ms. Sanders answered that there was a slide later in the
presentation showing the governor's 10-year plan as
required by statute. She stated that it was an
acknowledgement that the current trajectory and status quo
was not sustainable and that the state's primary savings
accounts would be depleted by 2027. She remarked that there
was also a recognition that the previous year the governor
had been ready and willing to have conversations about
creating various policies in order to "change the tide."
She added the governor recognized that it was an election
year and there was likely not an appetite for addressing
the issue, but the governor was willing to have the
conversations if people wanted to bring items forward.
1:59:47 PM
Representative Galvin referenced the $61 million [in
supplemental funds for the fire disaster declaration]. She
understood recruitment and retention was an issue in the
sector and in many others. She asked if the funding was
intended to pay raises, go toward a different pay
structure, or to bonuses.
Ms. Sanders responded that the budget proposed incentive
compensation to employees. She noted that DNR was available
online if needed. She offered to follow up with additional
detail if the committee desired.
Representative Galvin would appreciate hearing an answer
from the department. She thought it would be helpful to
have the information as the committee had been thinking
about different pay structures in other sectors and a more
permanent pay raise versus bonuses.
Co-Chair Johnson would hold the question to get through the
presentation. She would see how things went as the meeting
progressed.
Ms. Sanders moved to slide 3 showing a condensed version of
the budget table. She remarked that when talking about the
state's fiscal picture or financial status the focus was
typically on UGF. She reminded committee members that OMB
used DOR's fall forecast for UGF. She relayed that the
forecast was based on an Alaska North Slope oil price of
$82.39 per barrel in FY 24 and $76 per barrel in FY 25. The
production forecast was 470,000 in FY 24 and 463,800 in FY
25. The forecast resulted in just under $3 billion UGF for
FY 24 and approximately $2.7 billion in FY 25. The POMV
draw from the ERA was calculated at $3.5 billion for FY 24
and just under $3.7 billion for FY 25, resulting in a total
UGF revenue of $6.5 billion in FY 24 and $6.3 billion in FY
25. The change resulted in a decrease of about $200 million
in available revenue from FY 24 to FY 25.
Ms. Sanders moved to operating and capital expenditures on
slide 3. The expenditures totaled $5.2 billion in FY 24 and
$5.1 billion in FY 25, reflecting an overall decrease of
approximately $126 million when focusing on current
appropriations only. She noted that adding in the
supplementals [for FY 24] was not a great comparison
because there would likely be supplementals in in FY 25.
The table showed a current difference of about $204
million. The overall change could likely be attributed to
the many one-time appropriations that were backed out of
the budget; however, there were substantial investments
made in the governor's proposed budget in education, public
safety, and many other areas. She remarked it was notable
that the governor's proposal maintained the budget level
from one year to the next, given there were multiple
inflationary cost increases throughout many of the
department's budgets. Additionally, there was $97 million
in contractually negotiated salary increases, of which
there was $45 million UGF. She stated that while the
governor's proposal maintained a fairly level budget, there
were significant investments.
Co-Chair Johnson remarked that the previous year some of
the university employees did not get their contracts in the
budget. She asked if it was taken care of and carried
forward in the current proposal.
2:05:28 PM
Ms. Sanders confirmed that the proposed budget included
contractually negotiated salary increases for the
university.
Ms. Sanders continued to review slide 3. She noted there
was approximately $449 million available as a surplus [in
FY 24]; however, a calculation was included in the FY 24
budget specifying that half of the amount would go to an
energy relief payment in 2025 and half would be deposited
into the CBR. The current calculation provided for $220
million of the $449 million: $110 million to the CBR and
$110 million to qualifying residents in the form of energy
payments. The amount would result in approximately $165 to
$175 per person depending on the number of qualifying
individuals.
2:07:06 PM
Ms. Sanders turned to slide 4 titled "Fiscal Summary
Savings Balances." The slide showed higher level starting
and ending balances for a total reserve. She detailed that
the $20 million balance in the SBR would be drawn down in
the proposed FY 25 budget and the CBR would cover the
remaining deficit of $966 million. Under the proposal, the
state's reserves went from approximately $2.9 billion in
FY 24 to just under $2 billion in FY 25. She relayed that
DOR talked about having a savings balance of approximately
$400 million to $500 million to ensure the state had
sufficient cashflow throughout the year. She noted that the
savings balances [shown on slide 4] assumed status quo
revenue. She added that the presentation did not include a
deposit of the estimated $110 million into the CBR because
the number was subject to change due to frequent revenue
fluctuations. She relayed that the number could be updated
when the spring forecast became available.
Representative Stapp asked how the fund balances were
determined. He recognized the FY 23 actuals were unaudited,
but he noted there were wide discrepancies between budgeted
general funds versus expenditures. He believed the Medicaid
general fund match was off by about $100 million in the
state's favor. He wondered where the $94 million [in
earnings and deposits in FY 24] to the CBR came from, if
the $110 million was not calculated into the CBR deposit
and there was no deposit for the SBR. Additionally, he
asked what was happening with lapsed funds due to vacancies
above the vacancy factor and to budgeted funds that were
not expended.
Ms. Sanders answered that the earnings and deposits of $94
million in FY 24 and $76.7 million in FY 25 were reflective
of any anticipated potential earnings over the year. She
referred to the numbers as "straight line projections"
based on DOR's earnings projection analysis. She did not
have the percentage on hand and would need to verify it.
She referenced Representative Stapp's question about FY 23
and what the state actually spent versus what had been
budgeted. She explained that at the end of the fiscal year
OMB worked closely with LFD to audit unexpended balances of
funds to determine if they needed to go into the working
reserve or catastrophic reserve fund for example. She noted
there was a later slide showing how much lapsed and was
deposited into those funds to make them whole. She added
that there were funds that did not leave the treasury. She
relayed that the numbers were estimates working in
conjunction with LFD to determine what appropriations the
legislature had made in the current year and to ensure all
the appropriations were recorded in the accounting system
to determine the balance. She reiterated that it was an
estimate, but it was the best resource available using the
state's accounting system and the appropriations made.
2:11:52 PM
Co-Chair Johnson remarked that some of the University of
Alaska salaries were replaced with interagency receipts.
She asked where the receipts would come from.
Ms. Sanders responded that she did not have the total
number for the university receipts on hand. The original
request from the university was full funding of general
funds to address salaries. The proposed budget prorated the
salaries to be partially general funded and partially
funded with university receipts based on a proration of the
university's current funding structure. As with every other
salary adjustment, OMB looked at the various funding
sources available and applied the same logic in the request
put forward for university salaries.
Representative Ortiz considered balances and ending
balances in the CBR. He highlighted the bullet point on
slide 4: minimum savings balance of $500 million required
to maintain cashflows. He pointed out the idea that reserve
funds were needed in the CBR to deal with potential
emergencies such as a collapse in oil price. He asked if
Ms. Sanders was comfortable that a balance of just under $2
billion would be sufficient in the event of an emergency.
Ms. Sanders agreed that there should be a balance in the
CBR to address a variety of unknown or unanticipated
factors. She had not had the conversation about what that
number should be. She heard in the past a range from $3.5
billion to $2 billion. She was new in her role and would
evaluate the question and get back to the committee.
Co-Chair Edgmon referenced the proposed education bill SB
140, which had not yet been debated on the House floor. He
had heard there may be an amendment offered on the House
floor to increase Base Student Allocation (BSA) spending to
$680. He considered the $58 million for teacher retention
and bonuses in addition to funds for home correspondence
and other elements in the bill for FY 25 and calculated a
cost of $250 million or more. He highlighted that the $50
million would add to the $966.3 million deficit. He
estimated a total deficit of $1.2 billion or $1.3 billion.
He asked if Ms. Sanders saw things playing out in that way.
He recognized that a potential BSA increase to $680 in the
bill was pure speculation at present.
2:16:10 PM
Ms. Sanders answered that the budget was a starting point
for the conversations that would occur. She stated that the
legislature had a difficult job of determining what level
of funding would be made available for a variety of
purposes. She elaborated that there were difficult
conversations that would need to occur in the current and
future years about how the state would face the fiscal
cliff. She stated that adding another $250 million to $300
million would decrease the reserve further. She posed the
question of what the state would do in 2027 if there were
no remaining reserves. She remarked that it was a difficult
and uncomfortable place to be, and she believed it was
necessary to have difficult conversations to determine how
to move forward.
Co-Chair Edgmon remarked that the numbers were under the
auspice of a whole statutory PFD, which the legislature had
not done since 2015. He stated that the legislature had not
come close to a full statutory PFD during that time, as
much as "many of us" would like to see that given the cost
of living throughout the state. He stated that "it's much
to my personal chagrin that the full PFD is in this
budget." He believed it was just a statement. He would love
to see a full PFD and wished the state had the finances to
do so without tearing agency spending and other programs
apart.
Ms. Sanders moved to a chart showing a lookback of the
state's expenditures and revenues since FY 19 on slide 5.
She noted that the PFD payment had fluctuated over the
years with the use of an ad hoc amount. She highlighted
that the state's capital budget had fluctuated over time.
She elaborated that capital budgets were lean and primarily
focused on matching funds when the state experienced
deficits. The chart showed that capital budgets grew as
revenue increased and the POMV draw from the ERA was
implemented. She noted statewide items (represented by the
yellow portion of the bars) had been reduced in the past
two fiscal years, primarily due to the end of oil and gas
tax credits. The remaining drivers of statewide
expenditures were statewide debt service payments and
retirement contributions.
Ms. Sanders relayed that the operating budget had remained
fairly static from $4 billion to about $4.2 billion [shown
by the light blue portion of the bars on slide 5]. She
remarked that given some of the significant investments in
state agencies, it was amazing to see the amount being held
fairly stable.
Co-Chair Edgmon observed that in some respects the
legislature and administration were collectively doing a
pretty good job keeping agency spending down. He pointed
out that oil tax credits had been paid off. He added that
retirement was up $70 million in the current year, which
was something the legislature could not control. He noted
that the state's debt was low. He recognized they were not
getting everything they wanted funded; however, he thought
it was worth mentioning that spending curves were not
leaping up.
2:21:03 PM
Ms. Sanders turned to a swoop graph on slide 6 titled
"FY2025 Operating Budget by Agency (UGF)." The graph
provided a high level snapshot of the UGF spending per
agency in the governor's proposed budget. She detailed that
the K-12 foundation formula and pupil transportation within
the Department of Education and Early Development (DEED)
and Medicaid within the Department of Health (DOH)
continued to be significant cost drivers and collectively
accounted for 41 percent of the state's operating budget.
She elaborated that K-12 and pupil transportation were
fully funded based on statute, with a BSA of $5,960. She
reported that DOH finalized its Medicaid projection on
December 15; therefore, the updated numbers were not
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included in the governor's December 15 budget and were
being evaluated for inclusion in the governor's amended
budget. She relayed that the governor's amendments were due
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to the legislature on the 30 day of session, which was the
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14 of February in the current session.
Co-Chair Johnson asked about Ms. Sanders' statement "due to
the legislature." She asked what it meant exactly. She
remarked that the legislature had "gotten them on and off
for a long time." She asked if there was a statutory
requirement to stop at any point. She hoped not.
Ms. Sanders replied that she hoped not. She explained that
there was a statute specifying that the governor was to
deliver a statutory appropriation bill to the legislature
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on the 15 day [of December] and that amendments were due
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to the legislature on the 30 day [of session]. She stated
that the legislature had been very gracious in her time
working with budgets in allowing the administration to
bring items to the legislature as OMB became aware of them.
She highlighted supplementals covering unanticipated urgent
needs as an example. Additionally, there were contractual
salary adjustments through bargaining unit negotiations
that OMB received late in the game. The administration
appreciated the legislature's consideration of those items
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after the 30 day.
2:23:54 PM
Representative Josephson referenced the bar reflecting fund
capitalization on slide 6. He was familiar with fund
capitalizations, but not in the context of the graph. He
asked for detail.
Ms. Sanders replied that fund capitalizations were
appropriations made by the legislature to deposit money
into certain accounts that could spend without further
appropriation. She noted that it was not a state agency,
but it was a function of the appropriation process and she
wanted to ensure it was included in the total state
spending.
Ms. Sanders turned to slide 7 titled "Operating Budget
Significant Highlights Affordability." She stated that
the governor had focused his budget changes on three
primary categories in support of Alaskans: affordability,
education, and public safety. The presentation categorized
items included in the budget by the three topics. She began
with affordability and reviewed that the governor's budget
included a full statutory PFD, providing eligible Alaskans
with PFDs of approximately $3,600 depending on the number
of eligible applicants. She stated that ensuring Alaskans
had money to address the high rate of inflation and the
high cost of living in Alaska was a high priority of the
governor.
Ms. Sanders continued with budget highlights in the
affordability category on slide 7. She explained there were
a couple of items related to each other that crossed
between the Department of Commerce, Community and Economic
Development (DCCED) and DOH. She detailed that the budget
included $48 million to fully fund the Power Cost
Equalization (PCE) program. She highlighted a $3 million
[FY 24] supplemental increment to provide food banks, food
pantries, and any other food distributing entities with
grant funding. The item was in support of DOH's work to
address the SNAP backlog [the $3 million increment fell
under the DCCED category on slide 7].
Ms. Sanders reviewed items under the affordability category
for DOH on slide 7. She reported that DOH had received $1.5
million in the FY 24 and FY 25 budgets to provide access to
food through grants. The department's current focus was
primarily on addressing the [SNAP] backlog. She elaborated
that DCCED had stepped in to help by providing the $3
million to ensure families had access to food. She detailed
that DCCED had an extensive background in grant application
processes. For example, when Alaska had received [federal]
COVID-19 funding, DCCED was quickly able to get funding out
the door. The budget included $8.8 million for 30 non-
permanent eligibility technician positions and other costs
associated with addressing the SNAP application backlog.
She noted the positions were temporary for FY 24 only.
There was a request for $1.8 million to change 20
previously added non-permanent eligibility technician
positions to full-time to continue to address the SNAP
backlog in FY 25.
Representative Stapp stated his understanding that the $1.5
million appropriation to food banks was for FY 25. He
thought including an increment for July of FY 25 to address
the SNAP backlog was effectively indicating the backlog
would not be solved by that time.
Ms. Sanders answered that the $1.5 million added in FY 24
and FY 25 was to address food security in the state. She
relayed that the Alaska Food Security Taskforce had been
working hard to provide recommendations on how to ensure
food security in Alaska. The increment was intended for
food banks and pantries across the state. She had been told
in conversations with Commissioner Heidi Hedberg that the
goal was to address the backlog within 90 days. She
anticipated DOH would be able to meet the goal with
additional support.
Representative Stapp stated that currently the budget
appropriated the funds to the Division of Public
Assistance. He found it curious that the employees dealing
with the SNAP backlog were now supposed to be distributing
the money for food security. He wondered if it was the best
place to distribute the money. He did not believe he would
put the people responsible for the SNAP backlog in charge
of distributing the money for food security.
2:31:42 PM
Representative Ortiz noted that he had recently seen an
agency budget comparison between FY 24 and FY 25. He noted
it was not in the current presentation. He remarked that
although slide 7 showed budget increments for DCCED, he
believed the department was receiving a 40 percent
reduction in funding. He asked for an explanation.
Ms. Sanders responded that DCCED had received one-time
grant funding in UGF for the Alaska Seafood Marketing
Institute (ASMI) and Alaska Travel Industry Association
(ATIA) in FY 24. She explained that when the items were
backed out it appeared that DCCED was taking a reduction,
but it was because the funding was one-time in nature. She
noted that the ATIA funding was included in the FY 25
capital budget and the ASMI funding had not been continued.
Representative Ortiz believed there had been an overall
increase to the FY 25 DOH budget. He asked if the figures
[shown on slide 7] reflected the increases. Alternatively,
he wondered if something else accounted for the increase.
Ms. Sanders answered that in addition to the items on slide
7, there had been several fiscal note appropriations for
previously passed legislation, which had increased the DOH
budget. She did not have a complete list of the changes on
hand but offered to follow up.
Co-Chair Johnson asked Ms. Sanders to send the follow up
information to the committee.
Representative Coulombe asked if there was a reason energy
costs were not included in the list if the governor was
talking about affordability. She highlighted that reducing
energy costs would reduce the number of people going to
food banks. She noted that the cost of food would decrease.
She stated that PCE addressed many things associated with
living in Alaska. She remarked that the governor had been a
proponent of the energy issue and she was surprised energy
initiatives were not included in the affordability
category. She considered perhaps there were energy
initiatives that were not included on the list.
Ms. Sanders agreed that the energy items were located
throughout the governor's budget. She confirmed that energy
was a component of ensuring Alaska was an affordable place
to live. She noted the PCE program was included on the
slide [slide 7] and there were other energy related items
elsewhere in the presentation.
2:35:39 PM
Representative Coulombe asked if most of the energy
initiatives were capital or operating.
Ms. Sanders answered that the budget transferred money into
the Renewable Energy Grant Fund for appropriation in the
capital budget. There was $5 million in the governor's
capital budget. She noted that slide 8 included education
highlights and some of the items were related to energy and
located in the operating budget. She intended to provide
further detail on slide 8. She added that sometimes the
categories merged. She agreed that energy was a component
[of the governor's budget].
Representative Coulombe remarked that [affordable] energy
would help with education costs. She stressed that energy
affordability would help with many different aspects of the
budget.
Representative Hannan asked about the $3 million
supplemental increment under DCCED for food banks. She
believed committee members had all heard about the demand
on food banks over the interim. She was pleased to see the
ongoing support built into the budget for FY 25. She
remarked that most of the time supplemental appropriations
covered an expense that had already taken place. She asked
if food banks had already written the grants and DCCED did
not have sufficient funds to cover the cost. Alternatively,
she wondered if food banks would have to apply again,
receive the money in May, and expend it by June 30.
Ms. Sanders replied that with the exception of disasters,
the state tried hard not to spend money upfront without the
legislature's approval. She confirmed that the increment
would require the legislature's authorization to spend the
money. She reported that DCCED was poised and ready with an
application process to turn the funding around quickly.
There were mechanisms that could be used. She detailed that
previously the legislature had addressed urgent
supplemental needs through a fast track supplemental
process, which may be an option for urgent items. She
reiterated that the state tried very hard not to spend
money without approval.
Representative Hannan remarked that because of the $1.5
million in funding in FY 24, the food bank in her region
was able to participate in the federal bulk buy program for
the first time because it had never previously had
dependable money from the state. She detailed that the food
bank had been able to purchase food at a much discounted
rate. She could not call it a game changer because the food
bank had been up against unprecedented demands, but she was
pleased to see an acknowledgement of the need to ensure
food banks and food pantries were helping keep Alaskans
fed.
2:39:39 PM
Representative Galvin referenced the category of
affordability and remarked that she had predominately been
hearing about issues related to childcare and healthcare
from young families. She did not see anything pertaining to
childcare thus far in the presentation. She was happy to
see the governor looking for a more permanent solution to
the SNAP backlog. She thought around 100 positions had been
eliminated several years back. She observed the
administration was clawing a few more to try to ensure
there was the right balance to avoid any future backlog.
She looked at the $1.8 million increment [to change 30
previously added non-permanent eligibility technician
positions to full-time] and asked if it would be what it
took to avoid future backlogs.
Ms. Sanders confirmed that childcare fell under
affordability. There was a taskforce that had produced a
report and additional recommendations were forthcoming. She
noted there was currently nothing else to report on the
topic of childcare in the budget. She relayed that the
administration would use the report as guidance on how to
address childcare needs in Alaska. She addressed the second
part of Representative Galvin's question about the
positions related to the SNAP backlog. She explained that
changing the [eligibility technician] positions from non-
permanent to full-time made the positions more attractive
and fillable. The state was facing vacancies across all
departments and the goal was to provide adequate funding
and resources to address the issues, while not creating
positions the state was unable to fill. The administration
felt strongly that the 20 [full-time] positions could
address the continued work and that 30 temporary positions
could address the backlog.
Representative Galvin stated the other component she had
heard about related to affordability was the cost of
housing.
Ms. Sanders responded that items to address housing were
included in the capital budget portion of the budget
reflected later in the presentation.
2:42:54 PM
Co-Chair Johnson asked members to hold questions until the
end of the operating budget section on slide 10. She noted
that Co-Chair Edgmon would chair the capital budget portion
of the presentation.
Ms. Sanders turned to slide 8 titled "Operating Budget
Significant Highlights Education." She stated that
providing Alaska students with access to quality education
continued to be a priority of the governor. She detailed
that in addition to fully funding the foundation program
and pupil transportation programs based on the statutory
formula, the budget provided for $25 million in operating
and capital investment. She highlighted a list of operating
items, which included several one-time items passed by the
legislature: $5 million for the Alyeska Reading Institute;
$5 million for a grant to the Alaska Native Science and
Engineering Program (ANSEP); $1.5 million for continued
teacher recruitment, retention, certification, and
apprenticeship development; and $1.5 million for the Career
and Technical Education Initiative. The items were all
included in the governor's proposed FY 25 budget in order
to continue into the future. Three new items included
continued access to the Coding in Minecraft Program
statewide (the item was previously funded with COVID-19
funds), $1 million for a grant to the Alaska Education
Resource, and $1 million in support of the Youth Hunter
Education programs statewide (in the form of grants to
school districts).
Ms. Sanders continued to review education funding
highlights on slide 8. The Department of Military and
Veterans Affairs (DMVA) had oversight of the Alaska
Military Youth Academy's (AMYA) program. She detailed that
after the COVID-19 pandemic AMYA had experienced an
increase in attendance and class size, resulting in
increased operational expenses and a request for an
additional two positions to support students. She concluded
slide 8 with the Debt Service category. The School Debt
Reimbursement Program and the Regional Educational
Attendance Area (REAA) and Small Municipal School District
Fund were fully funded based on the statutory formula.
2:46:04 PM
Ms. Sanders moved to slide 9 titled "Operating Budget
Significant Highlights Public Safety." She relayed that
ensuring the safety of Alaskans and that the state's public
safety organizations were provided with resources necessary
to protect and respond continued to be a priority of the
governor. The budget included $19.3 million for the
Department of Corrections (DOC) to fully fund correctional
institutions and discontinue the cycle of supplemental
funding to the department.
Ms. Sanders continued with slide 9. The budget included two
categories of items for the Department of Law (DOL). The
first increment added $2.3 million and 12 [full-time]
positions in response to the passage of HB 325 in July 2022
pertaining to domestic violence, sexual offences, and
consent. She explained there were costs identified in the
associated fiscal note that were not included in the
appropriation bill. Additionally, there was $1.9 million
and 10 [full-time] positions to address drug prosecutions,
child protection cases, expansion of consumer protection
investigations, and increases in grand jury. The budget
included funding [$399,800] for DMVA to address the
operational expansion of the Alaska State Defense Force,
Naval Militia, and Civil Air Patrol. Funds would support
recruitment, training, travel, supplies, and other
operational costs.
Ms. Sanders addressed budget highlights for the Department
of Public Safety (DPS) at the bottom of slide 9. The budget
included $3.5 million to add 10 new Village Public Safety
Officer (VPSO) positions and provide the currently filled
70 positions with salary increases to bring them on par
with their counterparts. The budget included $700,000 for
three positions to be focused on western Alaska and crimes
against children, which had been increasing. She detailed
that the proposed positions were temporary, but the funding
would be added to the base. Positions would be filled with
retired public safety officers who had experience and the
desire to continue work after retirement. The budget added
two aircraft pilots and an aircraft maintenance inspector
to ensure there was backup for emergency and search and
rescue events. There was currently a delay in response
time, and the administration wanted to ensure timely
response to emergencies. The budget included $450,000 to
add four investigator positions and $250,000 {not included
on the slide) to work on a public information campaign
surrounding the recommendations of the Missing and Murdered
Indigenous Persons working group. She relayed that DPS was
requesting a position to work on recruitment and retention
of trooper positions. She elaborated that trooper
recruitment involved travel, an interview, and testing
processes. The position would support new applicants and
implement new recruitment strategies and initiatives.
2:51:36 PM
Ms. Sanders moved to slide 10 and addressed additional
operating budget highlights. The governor's budget included
$5 million to increase the foster care base rate. She
detailed that the rate had not been updated since 2018 and
the Department of Family and Community Services (DFCS) was
working to increase the number of foster care families. She
relayed that there had been one-time funding for the
Department of Fish and Game (DFG) in FY 24 for evaluation
of items under the Threatened and Endangered Species
Program and Marine Mammals Program. The proposed budget
included $1.3 million to continue the work and would add
the increment to the base in FY 25.
Ms. Sanders continued to review operating budget highlights
on slide 10. She lauded DOL for its work to identify ways
to increase recruitment and retention of attorneys and
paralegals. The department was expanding its
internship/externship and fellowship programs and paralegal
and prosecuting training academies to ensure its staff had
the support and training needed prior to going to a trial,
conducting a cross examination, or selecting a jury. The
budget included just over $1 million for the work. The
governor's budget included just over $2 million for
statehood defense. She explained that DOL would coordinate
and partner with other state agencies to address efforts
supporting Alaska's statehood sovereignty. The funding
would address a variety of issues ranging from federal and
subsistence matters in DFG to economic and scientific
analysis relating to federal rule making challenges for the
Department of Environmental Conservation (DEC).
Ms. Sanders highlighted $1.8 million for DNR to incentivize
pay for wildland firefighters in an effort to increase the
number of filled firefighter positions. The budget included
$900,000 UGF to offset money from timber receipts that was
currently being used for DNR positions. She elaborated that
the timber receipts were proposed to be used in the
Division of Forestry for critical bridge replacement,
creation of road access to valuable timber, increasing
access to land and resources, and creating an environment
of economic growth in the forestry sector. She stated that
the Department of Transportation and Public Facilities
(DOT) continued to work hard on snow removal across the
state. The budget included $915,000 for contracted snow
removal when unexpected snowfall exceeded existing
operational capacity (primarily in Anchorage, Juneau, and
Fairbanks). The budget included a $30 million deposit into
the Community Assistance Fund. The increment was partially
funded based on the PCE formula and a small amount would
come from UGF.
2:55:37 PM
Co-Chair Johnson thought the legislature put $5 million
into an emergency appropriation the past year for snow
fall. She explained that the snow had come early in the
current and prior years. She asked if there was any money
left in the fund.
Ms. Sanders did not recall and would follow up.
Co-Chair Johnson asked for verification that the amount
listed had nothing to do with the appropriation from the
past year.
Ms. Sanders agreed.
Representative Ortiz looked at funding for DOC listed on
slide 9. He thought the increment amounted to a 30 percent
increase for the department. He asked for more information
on the increase.
Ms. Sanders did not know the percentage off the top of her
head. She explained that historically the funding level for
DOC was not sufficient to meet the department's needs and
each year the administration came to the legislature with
significant supplemental needs. She detailed that OMB had
worked with DOC to project needs based on the department's
current staffing, levels in institutions, and its community
residential center contracts to provide a sustainable
budget and eliminate the supplemental cycle.
2:57:53 PM
Representative Ortiz had received a question in a
constituent meeting from a person who was concerned there
was a growing population of inmates across the state. He
asked if it was safe to say that was not the reason for the
funding increase.
Ms. Sanders responded that the increment was aimed at
bringing the budget into reality. She clarified that the
population of inmates was not significantly growing. She
noted that the cost of physical healthcare was hard to
predict, but it was possible to use trends to project where
the budget should be.
Representative Ortiz remarked on the importance of DOT for
his communities. He believed the budget included an
increase to DOT of approximately 10 to 11 percent. He
clarified he was not opposed to the increase. He asked if
the increase was entirely due to the $915,000 [for
contracted snow removal shown on slide 10] or other things
as well.
Ms. Sanders answered there were a variety of items within
the DOT budget. Notably, the DOT budget had included $10
million to $12 million in COVID-19 funds for several years
that offset general funds. She explained that because COVID
funds were no longer available, the state had to replace
the funding source with general funds. The budget also
included funding associated with rural airport lighting and
a variety of other items. She stated that the increment [on
slide 10] was not the only increase. The increment on slide
10 was in response to issues facing Central and Southeast
Alaska due to snow.
3:00:13 PM
Co-Chair Edgmon referenced the increment of $250,000 for
DPS to help attract qualified Alaska State Trooper (AST)
applicants. He stated, "If anything screams out that we're
having workforce shortage problems in Alaska, that has to
be it." He emphasized that the state had increased pay in
DPS more than any other department and had done everything
possible to get more qualified law enforcement officers. He
believed it was a very strong statement that the state had
to now spend money to attract AST applicants. He referenced
the $48 million for PCE, which highlighted how expensive it
was to get fuel in rural Alaska. He elaborated that the
cost was a result of exponential changes and not merely 2.5
percent inflation per year. He recalled that three years
back the allocation had been $32 million. He recognized the
kilowatt hour per household rate had increased since that
time. He returned to the proposed positions listed under
DPS on slide 9 and stressed that the state did not have
enough people to fill the positions. He remarked on the
hope there were enough retired state troopers to fill
investigator positions. He hoped the committee would
discuss the issue in depth. He underscored that the money
could be put in the budget, but if there was no one to
hire, "we really are falling short."
3:02:07 PM
Co-Chair Johnson handed the gavel to Co-Chair Edgmon for
the capital budget section of the presentation.
Co-Chair Edgmon noted that the committee had a hard stop at
3:30 p.m.
Ms. Sanders briefly addressed a swoop graph on slide 11
titled "FY2025 Capital Budget by Agency (UGF)." She
highlighted that DOT accounted for 42 percent of the
capital budget, which was primarily utilized to access
matching funds. She turned to slide 12 titled "Capital
Budget Significant Highlights Affordability." She began
with DOR and explained it included the standard housing
programs within the Alaska Housing Finance Corporation
(AHFC) at a total of $62 million for assistance to seniors,
and teacher, health worker, and public safety housing
programs. She highlighted $25 million for AHFC down payment
assistance grants, which was a new item in FY 25. She
detailed that AHFC worked with the governor on the project
and grants would be provided to individuals earning a
college degree or in a trade school certificate program.
She elaborated that the program would provide approximately
1,250 households with $20,000 in assistance. The increment
was reflective of the governor's goal of ensuring Alaskans
had access to housing and affordable housing.
Ms. Sanders highlighted $5 million for DCCED for renewable
energy project grants. She detailed that the Round 16
project list results was forthcoming and should be
available from the Alaska Energy Authority (AEA) to share
with the legislature in the near future. The budget
included $4.5 million to continue to advance the Alaska
Liquified Natural Gas (AKLNG) project and maintain project
assets in "ready status." She highlighted two increments
under the University of Alaska budget centered around
energy. The first increment was $1 million for the Alaska
Center for Energy and Power (ACEP) based on a
recommendation from the Alaska Energy Security Taskforce
Data Subcommittee. She expounded that ACEP would work with
other state agencies to evaluate existing data resources
for inclusion into a single resource. The second increment
was $11.1 million for the University of Alaska Fairbanks
Alaska Railbelt Carbon Capture and Sequestration Project as
requested by the university.
Ms. Sanders reviewed capital budget highlights with a focus
on education on slide 13. The DEED budget included $4
million for the School Construction Grant Fund program to
provide funding for the first project on the department's
list, the Newtok K-12 school relocation and replacement in
Mertarvik. The budget also included $4.3 million for the
Major Maintenance Grant Fund program to provide funding for
the first two projects on the list located in the Craig
School District and the Yukon Koyukuk School District. The
University of Alaska request included two significant
capital budget items. The first was [$10 million] for year
three of the University of Alaska Drones Program. The
second was $20 million to the University of Alaska
Fairbanks to achieve "Research 1" status.
3:07:06 PM
Ms. Sanders turned to slide 14 titled "Capital Budget
Significant Highlights Public Safety." The governor's
request directed $10.9 million to DOC for statewide
institution improvements. She moved to various requests for
DPS. The budget included a $9.5 million request to replace
the patrol vessel Enforcer supporting Southeast Alaska. She
detailed that the existing vessel was taken out of service
in December 2022. The budget included $6.2 million for the
purchase of a Pilatus aircraft. She elaborated that the
aircraft had the ability to land at 96 percent of the 215
airports across the state allowing for increased and rapid
response to emergencies. She highlighted an increment of
just under $5 million to address aircraft and marine vessel
replacement. The department had 44 aircraft and 41 marine
vessels, which required continued maintenance and repair.
There was a $1.3 million request to replace the 11-year-old
DataMaster fleet of breath alcohol instruments maintained
by DPS. The budget also included funding requests for crime
scene investigative equipment and aviation equipment, gear,
and technology refreshment.
Ms. Sanders turned to slide 15 showing additional capital
budget highlights. The governor's budget included $2
million for the Department of Administration (DOA) to
complete the digitization of the payroll system to ensure
state employees were paid timely and accurately. The DCCED
budget included $1 billion in federal receipts for the
Broadband Equity Access and Deployment (BEAD) Program. The
budget included a $5 million capital supplemental request
in response to the November [2023] disaster in Wrangell to
cover dam safety and stabilization improvements. The
governor's request included $2.5 million for a grant to the
Alaska Travel Industry Association (ATIA). She highlighted
$1.5 million to replace the Regulatory Commission of
Alaska's outdated case management system.
Ms. Sanders reviewed capital budget highlights within DFG.
The budget included $7.5 million to replace the Pandalus
research vessel for the Gulf and Bering Sea, disposed of in
2024. The budget included two projects for continued salmon
research. There was $2 million for stock identification of
salmon harvested in South Peninsula fisheries and $1.3
million for continued funding for the Alaska Marine Salmon
Program in response to poor salmon returns across the
state.
3:11:30 PM
Ms. Sanders advanced to slide 16 and reviewed the remainder
of the capital budget highlights. The governor's budget
included $3.5 million for DNR for silviculture treatments
and precommercial thinning in an effort to increase the
state's timber industry. The remaining items on the slide
fell under the DOT budget. The budget included $115 million
[in federal receipts] for rural ferry grants. She noted a
recent announcement of the availability of additional
funding for the motor vessel (M/V) Tustumena replacement.
The budget included matching funds of $23.2 million in toll
credits. She highlighted $4.3 million for the Copper River
Highway Wood Canyon bridges and trails, $2.7 million for
the Williamsport Iliamna Intermodal Connector, and $2.5
million for statewide Per-and Polyfluoroalkyl (PFAS)
fleetwide foam replacement. She detailed the increment was
for the replacement of equipment for vehicles that no
longer utilized PFAS. She concluded the capital budget
portion of the presentation.
Co-Chair Edgmon noted there were two substantive slides
remaining. He asked committee members if they wanted to
spend the remaining time on questions pertaining to the
capital budget or get through the remainder of the
presentation.
Representative Josephson had some short questions on
capital items.
Representative Ortiz also had questions on capital items;
however, he surmised it was likely not the only time to
discuss capital items.
Co-Chair Edgmon agreed that the capital budget would come
before the committee again. He asked members to keep
questions short.
Representative Josephson looked at the AHFC programs on
slide 12. He asked if any of the programs were a benefit to
homeless problems in Anchorage.
Ms. Sanders would follow up on the question. She explained
there were seven or eight programs under the AHFC increment
and she did not know how they related to each community.
Representative Josephson looked at the carbon capture and
sequestration project. He asked if the item was contingent
on the passage of the carbon capture utilization and
storage (CCUS) bill HB 50 [currently in the House Finance
Committee].
Ms. Sanders was not as familiar with the topic and deferred
the question to the University.
Representative Josephson turned to an increment on slide 13
and asked for more detail on what it meant for the
University of Alaska Fairbanks to achieve Research 1
status.
Ms. Sanders deferred the question to the University.
Representative Hannan looked at an increment for DFG
related to stock identification of salmon harvested in
South Peninsula fisheries on slide 15. She asked if the
increment pertained to south Kenai or south Alaska
fisheries stock.
Co-Chair Edgmon stated it was the Alaska Peninsula.
Ms. Sanders replied that it was for south Alaska.
3:15:34 PM
Ms. Sanders advanced to a chart on slide 17 titled
"Operational Challenges Vacancy." She relayed that state
agencies continued to face vacancies. The chart reflected a
snapshot from 2017 to December 2023. She noted that there
was upwards progress in December 2023, but it did not reach
the level of filled positions from several years back.
Agencies were taking many steps to address vacancy
challenges facing the state. She highlighted letters of
agreement discussed in previous years to address specific
cases where there were instances of life, health, and
safety and the state needed to incentivize staff through
recruitment and retention pay. She noted that DOA issued a
contract for a statewide salary study. She detailed that
the report should be completed by June 2024 for
consideration in the FY 26 budget.
Representative Galvin observed that the Department of Law's
vacancy rate was than 10 percent in the previous and
current years. She understood the department had done some
important work a couple of years back to ensure salaries
were competitive. She highlighted that DOL was still the
one "shining" department in terms of fewer vacancies. She
highlighted that DEED's 16 percent vacancy rate did not
reflect the teacher vacancy rate. She underscored that the
teacher vacancy rate was much higher in some districts,
particularly in rural Alaska. She had been hearing reports
that the situation in some districts felt like a third
world country. She stated that in order to try to fill some
of the vacancies the state was bringing in teachers from
the Philippines. She noted the state was grateful for the
help, but she knew of two districts where more than 50
percent of the teachers were from out of the country. She
underscored the urgent situation in schools impacting
students who would become the state's future employees. She
remarked that the state had not been able to do right by
the students to make sure the spots were filled with well
qualified and well paid teachers.
3:19:16 PM
Ms. Sanders addressed the statutorily required governor's
10-year fiscal outlook on slide 18. She noted the slide
reflected a condensed view of the outlook (a full view of
the outlook was available on OMB's website). She pointed
out that the approach to the 10-year plan provided a status
quo budget, and revenues projected by DOR, with no
significant changes in revenue measures or reductions in
the budget. The outlook was a recognition of the direction
the state was headed. She elaborated that the outlook was
an acknowledgement that policymakers would have to continue
the conversation to make difficult decisions to face the
structural fiscal picture. She stated that the governor was
willing to have the conversations and engage in ways to
change the trajectory.
Representative Ortiz looked at projections for larger
deficits through FY 34 on slide 18. He asked if the 10-year
outlook assumed a full PFD under the current statutory
formula.
Ms. Sanders answered affirmatively. The top row of the
table showing the PFD transfer reflected a statutory PFD
from FY 25 through FY 34.
Representative Ortiz asked for verification that the
outlook assumed education funding remained at the
governor's current proposal, which included nothing
additional outside of the formula and the current base
amount from FY 24.
Ms. Sanders agreed. She relayed that there was an
inflationary factor built into the outlook. She detailed
that OMB had used the debt schedules when constructing the
10-year plan. She characterized it as a status quo budget
reflecting current statute.
Representative Tomaszewski looked at the $25 million DOR
increment for a new AHFC program on slide 12. He thought
Ms. Sanders had stated that the grants were for someone
with a college degree or in a university program or trade
school. He asked for verification applicants were limited
to those groups.
Ms. Sanders replied affirmatively. She explained that the
grants were intended direct funding to those individuals to
retain them in Alaska and provide an opportunity to seek
affordable housing.
3:23:13 PM
Representative Tomaszewski referenced the chart showing
department vacancy rates on slide 17. He stated he had
heard the same thing about vacancies the previous year. He
had tried to remove some vacancies that had been on the
books for as long as seven years. He remarked that every
vacancy he had tried to eliminate had been defended by
departments as needed. He cautioned agencies to be prepared
to defend the vacancies. Additionally, he advised agencies
against showing positions as vacant if they were filled. He
noted it was something he would be looking at very
thoroughly.
Co-Chair Edgmon asked why the presentation included a
truncated version of the 10-year outlook. He remarked that
the previous year the 10-year outlook included carbon
capture money that the state now realized would not
materialize. He asked if the outlook was presented to
credit rating agencies.
Ms. Sanders responded that she could not speak to what DOR
presented to credit rating agencies.
Co-Chair Edgmon noted his intention to ask the DOR
commissioner in committee the following day.
Ms. Sanders communicated that the purpose of the
presentation was to get some information on the page that
was relevant for the conversation. She highlighted that a
full version of the 10-year outlook did not fit on the
slide and was available on the OMB website.
Co-Chair Edgmon requested that a fuller version [of the
governor's 10-year outlook] be presented to the committee
because he found it revealing. He remarked there were
things over the 10-year time period that would provide
opportunity as well as challenges with declining revenue
for a period of time.
Representative Stapp believed the Catastrophic Reserve Fund
balance exceeded the statutory requirement of $50 million
by $4 million. He reasoned that the fund would continue to
be overfunded if the state was lapsing more money. He asked
why there were more funds in the account than required.
3:26:20 PM
Ms. Sanders responded that fund balance information in the
state's accounting system was very complex. She shared that
OMB had gone "round and round" with the Division of Finance
when trying to determine fund balances. She recognized
statute required the balance to be at a certain level. As
OMB worked with the Division of Finance to determine what
[funding] was swept, OMB was trying to ensure the fund
balance was sufficient. She noted that any funds that were
not spent and lapsed stayed in the general fund for a
future year. She explained that if the money was not moved
into "those funds" it was there for another purpose in the
following year.
Co-Chair Edgmon reviewed the schedule for the following
day.
ADJOURNMENT
3:27:35 PM
The meeting was adjourned at 3:27 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| House Finance OMB FY2025 Budget Overview Corrected 01.22.2024.pdf |
HFIN 1/22/2024 1:30:00 PM |
|
| HFIN OMB Follow-up to 01.22.24 Budget Overview 02.09.24.pdf |
HFIN 1/22/2024 1:30:00 PM |
|
| Attachment 1 - DOH FY2025 Gov Change Records by Trans Type.pdf |
HFIN 1/22/2024 1:30:00 PM |
|
| Attachment 2 - Funded HAP and SNHG Projects.pdf |
HFIN 1/22/2024 1:30:00 PM |
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| Attachment 3 - FY2025 Capital Project 65319 - UAF AK Railbelt Carbon Capture & Sequestration Project.pdf |
HFIN 1/22/2024 1:30:00 PM |
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| Attachment 4 - FY2025 Capital Project 64794 - UAF Achieve Research 1 Status.pdf |
HFIN 1/22/2024 1:30:00 PM |