Legislature(1995 - 1996)
02/21/1995 01:35 PM House FIN
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* first hearing in first committee of referral
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HOUSE FINANCE COMMITTEE
FEBRUARY 21, 1995
1:35 P.M.
TAPE HFC 95 - 25, Side 1, #000 - end.
TAPE HFC 95 - 25, Side 2, #000 - end.
TAPE HFC 95 - 26, Side 1, #000 - end.
TAPE HFC 95 - 26, Side 2, #000 - #162.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 1:35 P.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Kelly
ALSO PRESENT
Nancy Slagle, Director, Division of Budget Review, Office of
Management and Budget; Mike Greany, Director, Legislative
Finance Division; Karen Rehfeld, Director, Administrative
Services, Department of Education; Janet Clarke, Director,
Division of Administrative Services, Department of Health
and Social Services; Arbe Williams, Director, Division of
Administrative Services, Department of Labor; Jeff Morrison,
Director, Division of Administrative Services, Department of
Military and Veterans Affairs; Ken Bischoff, Director,
Division of Administrative Services, Department of Public
Safety; Maurice Ninham, CHief Operating Officier, Norton
Sound Health Corporation, Nome; Kathi Burns, Clinical
Director, Norton Sound Health Corporation, Nome; Bob
Dindinger, Alaska Tourism Marketing Council, Juneau; Traci
Crammer, Exxon Valdez Trustee Council, Department of Fish
and Game; Del Smith, Deputy Commissioner, Department of
Public Safety; Bill Andrews, Finance Officer, Department of
Natural Resources; Representative John Davies; Joe
McCormick, Executive Director, Postsecondary Education
Commission, Department of Education; Duane Guiley, Director,
School Finance, Department of Education; Peter Nakamura MD,
MPH, Director, Division of Public Health, Department of
Health and Social Services.
SUMMARY
1
HB 137 An Act making supplemental appropriations for
operating expenses of state government for fiscal
year 1995; and providing for an effective date.
HB 137 was HELD in Committee for further
consideration.
HB 178 An Act making supplemental and special
appropriations for the expenses of state
government; making and amending capital and
operating appropriations; and providing for an
effective date.
HB 178 was HELD in Committee for further
consideration.
HOUSE BILL 137
"An Act making supplemental appropriations for
operating expenses of state government for fiscal year
1995; and providing for an effective date."
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
MAURICE NINHAM, CHIEF OPERATING OFFICER, NORTON SOUND HEALTH
CORPORATION, NOME, testified on Section #27. He pointed out
that the Island of St. Lawrence has a combined population of
700 people. There are currently eight people actively ill
and seventy people infected with tuberculosis (TB). He
provided the Committee with a short epidemiology of the
disease stressing that poor hygiene is a condition of the
norm on the island and that it is a condition in which the
disease grows.
He added, the challenge to prevent the spread of
tuberculosis statewide is to prevent the infected people
from converting to an actively ill or contagious status.
For those actively ill, there are public laws which require
treatment. The challenge will be to properly educate the
infected but not yet actively ill patients. The treatment
for the actively ill and the infected is the same and
consists of six months of drug therapy.
PETER NAKAMURA MD, MPH, DIRECTOR, DIVISION OF PUBLIC HEALTH,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, further explained
the need for the supplemental request. Historically, TB has
been a major problem in the State, although, in 1986 the
disease was on the verge of elimination. Consequently, at
that time there was a shift in the program emphasis. The
State conformed to that shift because of budgetary changes.
At that point, the Department's ability to address the issue
2
decreased significantly. He stressed that tuberucolsis is
currently resurging because of decreased preventitive
funding.
Dr. Nakamura continued, to address the concern will require
a tremendous amount of effort. It is critical that the
patient stay on therapy for the prescribed amount of time,
otherwise the patient will develop a resistance to the
treatment. This resistence can be caused by continuous
interruption of therapy.
Discussion followed between Representative Martin and Dr.
Nakamura regarding the responsibility of Native Health
Service and Public Health Service in relationship to the
village epidemic. Dr. Nakamura reminded Representative
Martin that resources had been shifted to other concerns
with the statewide decline of TB.
KATHI BURNS, CLINICAL DIRECTOR, NORTON SOUND HEALTH
CORPORATION, NOME, commented on the current inflexibility of
the regulations. She emphasized the immediate need to hire
extra clinical people to help in the TB crisis. She pointed
out that it would be easier to recruit to the Nome area, if
the State would recognize additional professionals. There
have been long-time vacant positions because of the high
cost of living in Nome, resulting in recruitment difficulty.
She urged the Committee to consider the expansion of
licensed professionals.
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT
BOB DINDINGER, ALASKA TOURISM MARKETING COUNCIL, JUNEAU,
testified in support of Section #31 of the supplemental
request in the amount of $2.5 million dollars for national
advertising.
Co-Chair Foster questioned the large increase to brochure
advertising. Mr. Dindinger replied that because of reduced
State match funds, the Council was forced to increase the
costs for brochure business advertising.
Co-Chair Hanley stated the request was not an emergency need
and that he would not support the concern. He added, the
impact would not dramatically affect this year's tourism
market.
DEPARTMENT OF EDUCATION
DUANE GUILEY, DIRECTOR, SCHOOL FINANCE, DEPARTMENT OF
EDUCATION, spoke to Section #18 of the supplemental request
in the amount of $2 million dollars to cover the school
districts estimated shortfall. He noted that there has been
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an increase of 3300 students over the last year and that the
Department is projecting an additional 2300 student increase
in the next year.
Representative Martin asked the portion of the request used
for upgrading the individual student share. Mr. Guiley
stated that the supplemental request represents a total
increase to the instructional units including a combination
of any changes in classification and normal student growth.
KAREN REHFELD, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT
OF EDUCATION, testified in support of Section #19 of the
supplemental request in the amount of $615.7 thousand
dollars which would address the vocational education costs
to the federal grants still under negotiation.
Co-Chair Hanley asked what portion of the request was for a
current judgement against the State. Ms. Rehfeld advised
that FY90 and FY91 were under appeal. The specific cost of
FY90 would be $300 thousand dollars. If that case is ruled
against, the court would also include the FY91 case
equalling the additional portion of the request.
JOE MCCORMICK, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION
COMMISSION, DEPARTMENT OF EDUCATION, spoke to Section #20 of
the supplemental request in the amount of $22 thousand
dollars which would fulfill a legally binding contractual
agreement between the State of Alaska and the University of
Washington for those participating students in the WAMI
program. The request resulted from a shortfall which
occurred last year when the FY95 appropriation did not equal
the amount billed to the State for the program.
(Tape Change, HFC 95-25, Side 2).
Mr. McCormick stated that the State of Alaska has funded ten
new students per year. The total cost per student each year
is $47 thousand dollars. He added that the University of
Washington raised fees without notice in order to cover
inflation costs associated with that program. Mr. McCormick
recommended that the State of Alaska consider the inflation
cost increase each year to the program.
NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, pointed out
that when Governor Hickel submitted the budget for FY95, it
was understood that budget was $55 thousand dollars
shortfunded and it would be the intent that the money be
collected by the University of Washington directly from the
participants in the program. The University of Washington
did not want to comply with that procedure, which caused the
State to be short the amount for the contractual obligation.
4
Mr. Guiley spoke to Section #21, of the the supplemental
request in the amount of $2.2 million dollars funding the
Department of Education in the Toksook Bay fuel spill
settlement. The litigation resulted from a 1990 oil spill
leakage at the school. The request would fund:
1. $397 thousand dollar clean-up, based upon a plan
approved by the Department of Environmental
Conservation and which legally must be
accomplished this summer; and
2. $1.8 million dollars negotiated settlement with
the plaintiffs in the case, which consists of 500
residents in Toksook Bay area. The award received
tentative approval by a judge contingent on
funding through the Legislature. If it is not
funded this session, the case will then proceed to
a jury trial.
Mr. Guiley explained that the oil spill contaminated ground
water and was then drawn into a well system, thus,
contaminating the water supply of the areawide homes,
consequently, causing medical problems for the community.
Representative Martin asked if the State had insurance to
cover the costs. Mr. Guiley replied, under the use permit
issued to each of the REAA school districts, each district
is required to carry general liability insurance. Although,
since 1986 the insurance policies have excluded pollution
liability, which is currently unavailable at a reasonable
cost.
Representative Brown commented on the feasibility of using
money from the Oil and Hazardous Substance Relief Response
Fund. Mr. Guiley responded that the initial request
suggested that the $396 thousand dollars come from that
fund. The current plan would be for the Department to
negotiate with the contractor to perform the clean-up as
approved by DEC. Representative Brown recommended modifying
the request by deleting the $396 thousand dollar portion.
Mr. Guiley agreed.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, testified in
support of Section #22 of the supplemental request in the
amount of $871 thousand dollars for a Medicaid
pharmaceutical drug rebate which would offset an error of
expenditure increases. That mistake was made in FY95.
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Ms. Clarke spoke to Section #23 in the supplemental request
in the amount of $4 million dollars to increased federal
authority for the Indian Health Services Medicaid Program.
The program would be 100% federally funded. She added,
there has been an increase in the regional health
corporations interests in clients eligibility for that
program.
Ms. Clarke noted that Section #24 of the supplemental
request in the amount of $483 thousand dollars represents a
policy shift from the current Governor to restore seven of
the ten optional services deleted in FY95 budget. The seven
services to be restored would be chiropractic, advanced
nurse practioner, adult dental, emergency hospital, speech,
hearing and language, optometrist services and eye glasses
and occupational therapy.
Representative Brown urged the Committee to reconsider the
services. Ms. Clarke offered to provide the Committee with
the break down of service allocations. Co-Chair Hanley
suggested a reprioritization of the list.
Ms. Clarke stated that Section #25 in the supplemental
request in the amount of $392.9 thousand dollars for Family
and Youth Services would fill vacant positions. She pointed
out that $310 thousand dollars of the request would be a one
time carry over of federal funds. The additional $83
thousand dollars would consist of a combination of a general
fund match and general funds.
There has been a 22% increase in reports requiring child
protective services since FY92. Additionally, there has
been a 17% increase in youth correction investigations. The
Department's ability to fully fund all social workers and
juvenile probation officer positions has been limited.
Currently, there are seven less positions for social workers
than there were in FY93.
Ms. Clarke continued, Section #26 of the supplemental
request in the amount of $580 thousand dollars for the
Division of Family and Youth Services in order to maintain
staffing levels at McLaughlin Youth Center for increased
admissions.
She advised that last year there was a supplemental request
for McLaughlin resulting from unprecedented growth in the
youth facility units. The Department had hoped that with
the Juvenile Waiver bill that population would decrease.
The first two quarters of FY95 observed a 16.5% increase to
admissions at that facility.
Ms. Clarke noted that the facility's maximum capacity is 150
6
inmates although during the fall 1994, the capacity exceeded
180 juvenile inmates. She suggested that the State could
suffer a court intervention in the juvenile facilities if
they are not fully staffed and funded.
Ms. Clarke continued, Section #28 of the supplemental
request for the Alaska Psychiatric Hospital (APH) fund
source was changed due to the loss of third party receipts.
Part of the decline was caused by the downsizing of API and
budgetary cut reductions to the eighty bed facility.
Co-Chair Hanley noted that a thirty percent decrease in beds
would not equate to the proposed reduction. He advised that
there is currently a management audit in place to address
this issue. Ms. Clarke noted that the Department is also
providing a staffing study. She pointed out that the
downsizing plan was adopted 10/01/94 before the change of
Administrations.
Representative Martin asked if Elmendorf Air Force Base
Hospital would be able to take current API patients. Ms.
Clarke replied that Elmendorf has an eight bed psyche unit
and that the native hospital has no beds for that category
of patient.
Ms. Clarke continued addressing the second portion of
Section #28, a fund source shift in the amount of $164
thousand in general funds, a reduction in interagency
receipts for Harborview for a net reduction for $331
thousand dollars. The funding source shift resulted from
two events including the unexpected plans for an additional
release of six residents from Harborview. Each time a
resident is discharged, the State loses federal Medicaid
funds. Because of the fixed costs at Harborview, the
Department can not cut costs as quickly as the downsizing
occurs.
Co-Chair Hanley explained that consideration has been given
to phasing Harborview out of usuage for psychiatric care.
He encouraged the Administration to consider the options
available for that facility.
Ms. Clarke testified in support of Section #29 in the amount
of $410 which would cover the judgements and claims for the
Greenfield versus State case which has resulted in a
superior court judgement.
DEPARTMENT OF LABOR
ARBE WILLIAMS, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF LABOR, testified in support of
Section #30 of the supplemental request in the amount of
7
$55.6 thousand dollars which would provide funding for the
statewide information and analysis program for economic
development. The program was deleted last year from the
FY95 operating budget. The Department of Labor states that
the program would be necessary in order to prepare for the
2000 statewide population census.
Representative Brown questioned the need to buy a computer,
monitor and software for that program noting that it had
existed previously. Ms. Williams replied that those
services were sold because of serious cuts to the
operational budget.
(Tape Change, HFC 95-26, Side 1).
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT
Representative Brown referenced Section #31 - Alaska Tourism
Marketing Council request and asked the Administration's
position of implementing a tax to further fund that program.
Ms. Slagle remarked that the Administration would support
using contributions to sustain the program. Representative
Brown urged the Committee to look for an additional funding
source to cover the amount from general funds.
DEPARTMENT OF MILITARY AND VETERAN AFFAIRS
JEFF MORRISON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF MILITARY AND VETERAN AFFAIRS, spoke
to Section #32 of the supplemental request in the amount of
$900 thousand dollars for the estimated annual spring
disaster costs which were averaged on a five year basis.
The purpose of the Disaster Relief Fund would be to have
funds available in order to be able to respond to disasters
when needed.
DEPARTMENT OF NATURAL RESOURCES
BILL ANDREWS, FINANCE OFFICER, DEPARTMENT OF NATURAL
RESOURCES, spoke to Section #33 of the supplemental request
in the amount of $1.6 million dollars to cover the June,
1994 fire fighting expenditures. Those expenditures have
been paid; authority was granted through the Emergency
Declaration process in the Office of Management and Budget.
He continued, Section #34 of the supplemental request in the
amount of $7.2 million dollars when would provide an
adequate funding level for FY95 fire suppression costs
averaged on a seven year basis. Funding this component
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would eliminate the need to go through the Emergency
Declaration process for future fire suppression fixed costs.
DEPARTMENT OF FISH AND GAME/DEPARTMENT OF ENVIRONMENTAL
CONSERVATION/DEPARTMENT OF NATURAL RESOURCES
TRACI CRAMMER, EXXON VALDEZ TRUSTEE COUNCIL, DEPARTMENT OF
FISH AND GAME, explained that Section #35 would provide a
language change which would request an authorization
provided in the revised programs approved by the Legislative
Budget and Audit program and extending to FY96. That
language would be consistent with language approved last
year. The Trustee Council operates on a federal fiscal year
basis. Ms. Crammer offered to provide those RPL's to the
Committee. The total authorization would be $16.5 million
dollars.
DEPARTMENT OF PUBLIC SAFETY
DEL SMITH, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY,
spoke to Section #36 of the supplemental in the amount of
$682 thousand dollars for community jails resulting from
increased cost in renegotiation of contracts in order to
conform with operating standards of December 1994 Governor's
Task Force on the Community Jails Programs report.
KEN BISCHOFF, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF PUBLIC SAFETY, noted that contract jails are
the responsibility of the State. Implementing that program
has been difficult. Contract jails will not provide
additional services, although the task force established
standards for costs and guidelines of appropriate staffing.
The expectation is to implement the suggestions recommended
by the task force report.
Representative Parnell voiced concern in using the
supplemental to address inflation. Mr. Smith explained that
the intention of the request would be to implement
recommendations of the task force. Mr. Bischoff stated that
the original contract had been extended until November,
1994. With the funds exhausted, local facilities will not
house those prisoners. In most contracts there exists a
"subject to appropriation" amendment. Not all contractors
are willing to wait for the appropriation of the
Legislature.
Mr. Bischoff reiterated that the facilities need to exist to
satisfy the State's responsibility. Each facility has fixed
costs and variable costs. If the supplemental request is
not approved, troopers would be removed from their job
specific tasks in order to move prisoners to State
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facilities. Discussion followed among Committee members and
Mr. Smith regarding prisoner "holdings".
Representative Brown asked how the contract jails in
Anchorage differed from other municipalities. Mr. Smith
explained that the Anchorage facility is operated by the
State and leased from the municipality, but was originally
owned by the municipality. The municipality pays for the
man-days for municipally charged prisoners in that facility.
Mr. Smith addressed Section #37 of the supplemental request
in the amount of $200 thousand dollars for a state trooper
termination settlement. Representative Brown commented on
the number of termination problems which result in large
payments from the State. She thought the information for
these cases should not be kept confidential in order that
the State rectify a change of procedures.
Mr. Bischoff explained Section #38 of the supplemental
request in the amount of $156 thousand dollars which would
cover the operating costs of the Civil Air Patrol.
Representative Brown pointed out that the request resulted
from cuts to that budget in the FY95 operating budget.
(Tape Change, HFC 95-26, Side 2).
Mr. Smith continued, Section #39 in the supplemental request
would address the loss of receipts due to low sale of
permits for concealed weapons. Those sales have been
substantially less than anticipated and consequently all the
positions assigned to support that licensing unit have been
reduced. Representative Parnell noted that twelve positions
had been allocated, whereas, six were filled.
Mr. Smith commented on Section #40 of the supplemental
request for the Narcotics Task Force, used for uncollectible
receipts from seized assets.
Representative Kohring voiced his frustration regarding the
supplemental process. He observed the number of requests
which were not emergency. He said this was in contradiction
to the definition of the Executive Budget Act description.
HB 137 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 3:50 P.M.
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