Legislature(1999 - 2000)
01/21/1999 01:35 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
GENERAL SUBJECT(S): FY00 OVERVIEW:
Annalee McConnell, Director, Office of Management and Budget
David Teal, Director, Legislative Finance Division
The following overview was taken in log note format. Tapes and handouts will
be on file with the House Finance Committee through the 21st Legislative
Session, contact 465-2156. After the 21st Legislative Session they will be
available through the Legislative Library at 465-3808.
Time Meeting Convened:
Tape(s): HFC 99-2, Side 1 and 2
HFC 99-3, Side 1
PRESENT:
X
Representative G. Davis
X
Co-Chair Mulder
X
Representative Foster
X
Co-Chair Therriault
X
Representative Grussendorf
X
Representative Austerman
X
Representative Kohring
X
Representative Bunde
X
Representative Moses
X
Representative J. Davies
X
Representative Williams
ALSO PRESENT:
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF
THE GOVERNOR; DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION, DAN
SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF
THE GOVERNOR.
LOG
SPEAKER
DISCUSSION
35
Rep. Mulder
Convened the meeting at 1:35 p.m.
86
ANNALEE MCCONNELL,
DIRECTOR, OFFICE OF
MANAGEMENT AND
BUDGET, OFFICE OF THE
GOVERNOR
Observed that there is no possibility to
make up short falls through cuts alone.
Emphasized commitment to education and child
protection. Emphasized that the Governor's
budget accommodated increases for programs
that would aid youth and reduce crime.
Prison population continues to grow.
Decision in FY 99 budget was not to pay the
highest out-of-state rate for prison beds.
The only state with a reduction in its
budget.
385
Ms. McConnell
Provided committee with handout, Balancing
the FY00 Budget (copy on file).
Ms. McConnell
With inflation the FY00 budget is less then
FY99.
Co-Chair Therriault
Asked if the general fund contribution is
less?
510
Ms. McConnell
Yes, the general fund contribution is lower.
Total funds show growth, partially due to
the permanent fund. The return on the
state's investment exceeds oil revenues.
601
Ms. McConnell
There are two areas that are not reflected
in the FY99 budget. Investment in child
health and protection, tobacco control and
public health would be paid with tobacco
settlement money. The match needed to
secure maximum federal highway funds would
be paid with motor fuel increases. Increases
are neutral in respect to the fiscal gap.
Programs are supported by fees. No
additional draw is needed on the
Constitutional Budget Reserve.
627
Ms. McConnell
Alaska has opportunity to expand with
federal funds. The state stands to gain $3
million dollars in federal tobacco
settlement funds over that next 25 years
that would require a state match. Discussed
proposal to increase state fuel tax as a
match to secure highway funding.
730
Ms. McConnell
Increase could be a statutory designation to
note the intention to raise fuel tax to pay
for transportation improvements.
764
Ms. McConnell
Discussed the tobacco settlement and looked
at handout. There is a sustainable source
of revenue. See page 2.
825
Ms. McConnell
Discussed programs that would use tobacco
settlement money. Child protection and
prevention programs would be included. The
major new element would be in child abuse
prevention. This would require $3 million
in new funding.
897
Ms. McConnell
Looked at areas of reduction. $40 million
in debt retirement. Discussed the $50
million dollar dividend from Alaska Housing
Finance Corporation (AHFC). Not all of the
money was used. The debt amount would go
back up next year.
995
Ms. McConnell
Discussed funding for the safe water
program. Noted that the state will receive
increased federal funding for the safe water
program for fewer state dollars.
Ms. McConnell
Discussed the proposal to change the
Longevity Bonus program to needs based.
Eligibility would be capped at $60,000.
1056
Ms. McConnell
Discussed the need for unspecified
reductions.
1159
Ms. McConnell
Discussed position counts. Emphasized that
positions are broken down by funding source.
Some positions are funded with CIP receipts.
Positions may have a combination of funding
sources.
1229
Ms. McConnell
Noted that 70 positions are only technical
changes. 56 positions are associated with
the Malaspina. The position count was not
included in the FY99 budget.
Ms. McConnell
University requested a $16 million dollar
increase in their budget. The university
budget is $5.6 million dollars above FY99.
They will do a budget amendment to show the
reduction.
1339
Ms. McConnell
Noted that there are some new positions but
emphasized that they have tried to locate a
funding source. Discussed pioneer homes.
1398
Ms. McConnell
Proposes to use rate increase to improve
pioneer homes.
1429
Ms. McConnell
43 new positions in the Department of
Corrections.
Ms. McConnell
15 positions in Department of Education are
federally funded
1494
Ms. McConnell
Village Safe Water positions are federally
funded.
1531
Ms. McConnell
37 positions to operate youth treatment
facilities that were approved and are under
construction.
1590
Ms. McConnell
21 positions funded with tobacco settlement
There are 23 new positions in the Department
of Health and Social Services that are also
funded in other ways.
1601
Ms. McConnell
Emphasized that the 600 new positions will
not affect the fiscal gap.
1618
Ms. McConnell
Noted new formats for the budget. Half of
the agencies are using the automative budget
system.
1658
Ms. McConnell
Offered assistance. Noted that there are
issues that cross over departmental lines.
1755
Co-Chair Mulder
What is the Tobacco settlement dependent on?
1779
Ms. McConnell
The amount is known, but the date is
unknown. 21.9 million will be received no
later than the last day of FY 2000. Partial
payment will be received no later than June
2000.
1837
Co-Chair Mulder
Does the state need to enact legislation
1851
Ms. McConnell
No legislative action is required.
1879
Co-Chair Mulder
T21 transportation funding of $3 billion?
over the next ? years. Federal funds cannot
be used for maintenance.
1906
Ms. McConnell
Money cannot be used for snow plowing, but
some may be used for rehabilitation.
1951
Ms. McConnell
Discussed federal funding for roads.
1988
1
Co-Chair Mulder
Noted that the public would support
increases if they saw their roads improved.
2008
Ms. McConnell
Noted that Hawaii has gotten some
concessions for spending road money on
maintenance
2027
Representative J.
Davies
Referred to page 4 of the Legislative
Finance Division.
2044
Co-Chair Therriault
Asked the savings of a needs based longevity
bonus
2056
DAN SPENCER, CHIEF
BUDGET ANALYST,
OFFICE OF MANAGEMENT
AND BUDGET, OFFICE OF
THE GOVERNOR
Explained that there would be approximately
$7 million dollars in savings from a needs
based longevity bonus.
2079
Co-Chair Therriault
Yearly obligation of current program?
2089
Ms. McConnell
Projections will be updated before budget
amendment time, March 4th.
2121
Co-Chair Therriault
Noted that there is an $1.1 million dollar
reduction in the Child Support Enforcement
Division do to success in welfare reform?
Questioned if other states have experienced
the same trend.
2178
Ms. McConnell
Observed that other states are experiencing
the same trend.
2193
Co-Chair Therriault
Questioned general fund success of welfare
reform.
2201
Ms. McConnell
Noted that success in welfare has created
demand for childcare.
2272
Co-Chair Therriault
Requested information on fire suppression.
2291
Mr. Spencer
Discussed funding for fire suppression.
2303
Ms. McConnell
Discussed the funding mechanism for fire
suppression. No attempt was made to show
funds for disasters that have not yet
happened.
2344
Representative
Austerman
Asked for information on new positions.
Mr. Spencer
Explained that authorization on Malaspina
positions were not shown in FY99 because
they were not certain. The FY99 only shows
what the legislature technically included.
000
TAPE 3, SIDE 1
TAPE CHANGE
Representative
Austerman
Pointed out that Malaspina was authorized in
FY99.
Mr. Spencer
Pointed out that the Kennicott replaced the
Malaspina.
101
Representative
Austerman
Asked a question regarding public safety.
Ms. McConnell
Explained the 17 new trooper positions. Not
all were funded by July 1. There had been
positions on paper that were not funded.
The decision was made to use the number of
troopers that were actually funded. 243
positions were actually funded.
374
Representative
Austerman
85 percent of Department of Transportation
and Public Facilities employees are
federally funded. Expressed concern that
federal dollars can affect the general fund.
547
Ms. McConnell
Pointed out that they have turned down some
federal funds.
597
Ms. McConnell
Looks at the expectation of continuing
programs that were begun with federal
funding. Acknowledged that not all
increases are good, but emphasized that not
all decreases are good.
630
Representative
Austerman
Noted that transportation has the greatest
amount of state employees. Expressed
concern that additional federal funding may
not continue.
734
Ms. McConnell
Department of Transportation and Public
Facilities is 85% federally funded. This
includes capital.
760
Co-Chair Mulder
Concern of leadership to try to curb
expenditures in FY99. Observed that there
is a RFP for 5,000 sq. feet for Department
of Health and Social Services. Have options
been explored to delay?
820
Ms. McConnell
Explained that it is office space for
additional child support enforcement
workers. Maintained that departments were
not adequately funded in FY99. Increases
have been absorbed. Increases in expenses
have not been met with increased revenues.
The Departments have worked with fewer
staff. Not always possible to absorb costs.
918
Co-Chair Mulder
Observed that it would help for
Administration to take steps to reduce
existing budget.
995
Ms. McConnell
Acknowledged that the public wants cost
affective government.
1023
Ms. McConnell
Emphasized that inflation costs have been
absorbed by agencies.
1065
Representative
Williams
Asked who did the work in child protection
before new positions. Questioned if the
administration would look at consolidating
agencies.
1211
Ms. McConnell
Only the most serious reports were responded
to. Other reports of harm were not being
responded to. Additional workers allow more
cases to be investigated. The governor is
looking at options of consolidations.
1269
Ms. McConnell
Responded that some expansions have resulted
from federal mandates and requirements.
Discussed options to consolidate that have
occurred due to changed in federal
requirements.
1329
Representative
Williams
Further discussed on the desire to see
consolidations.
1428
Representative J.
Davies
Noted that there have been reductions and
efficiencies.
1472
Representative J.
Davies
Commented on consolidations. There are a
number of reasons why individual agencies
were created. Pointed out that reductions in
service may occur with consolidations.
Noted that the state has grown over the past
years.
1599
Representative
Kohring
Expressed interest in further discussions
regarding consolidations. Emphasized that
restructuring can create efficiencies.
1698
Representative Bunde
Alaska has 19 programs that other states do
not have.
1709
Ms. McConnell
Longevity bonus is one of the programs that
other states do not offer.
1731
DAVID TEAL, DIRECTOR,
LEGISLATIVE FINANCE
DIVISION
Discussed agencies role in appropriation
process. Shows operating and capital
budgets going up. Provided handout. Noted
that there are differences between the lfd
and omb.
1855
Representative J.
Davies
Observed that there are always differences
and requested that Legislative Finance
Division and Office of Management and Budget
work together to reconcile differences where
possible.
LEGISLATIVE FINANCE DIVISION
1878
Mr. Teal
Legislative Finance Division has worked with
Division and Office of Management and Budget
to find areas that are more technical in
disagreement.
1978
Mr. Teal
Discussed differences in interpretations.
LFD looks at actual legislation.
Discrepancies occur in Corrections and in
the amount of reductions. The governor
includes some reductions dependent on
legislative actions, such as the longevity
bonus. There are some small technical
differences that remain.
1993
Mr. Teal
Some expenditures by the Governor are off
budget. Discussed off budget items. Power
to appropriate includes ability to specify
funding source. This belongs to the
legislature not the governor. Tobacco funds
are identified as other because they need to
be tracked.
2096
Mr. Teal
The Legislative Finance Division does not
normally track positions. Did show on page
two of handout. Noted that the Governor's
budget did not show funding for collective
bargaining
2133
Co-Chair Therriault
End of 3 year negotiated period for most
state employees. Where are we for
university?
Mr. Spencer
University contract negotiations vary.
Mr. Teal
There has been agreement on a $16.5 million
dollar supplemental reserve. Governor has
suggested that the supplemental for FY99
could be as much as $50 million dollars.
2184
Mr. Teal
Gov.'s budget generally grows between
introduction and the 45th day of session.
2212
Mr. Teal
Discussed Alaska Housing Finance Corporation
(AHFC) receipts. Noted that there are
issues that need to be resolved. The
Legislative Finance Division left AHFC
receipts as presented by Gov.
2258
Mr. Teal
Alaska Industrial Development and Export
Authority (AIDEA) revenues were classified
as other funds. How they are classified
will affect budget amount.
2300
Co-Chair Mulder
Has the AIDEA dividend gone through the
general fund?
2319
Mr. Teal
Sometimes it has gone through the general
fund, other times as other funds.
2333
Co-Chair Therriault
Asked if debt retirement is being carried
forward to reduce the next year.
2353
Mr. Teal
Complicated issue, which needs further
clarification.
054
Mr. Teal
Discussed capital budget. $27 million
increase in general funds for capital
budget.
194
Mr. Teal
Noted that if tobacco tax goes through the
general fund there will be an increase in
the budget.
233
Representative
Grussendorf
Pointed out that the legislature also
manipulates funding sources to make the
budget appear smaller.
372
Mr. Teal
Agreed that some expenditures have been
reclassified, but that there have been some
actual reductions.
404
Mr. Teal
If there is an existing fund source that can
be used by the Administration it is not up
to them to change the funding source. It is
up to the legislature to determine the
funding source.
575
Mr. Teal
Discussed tobacco tax. He pointed out that
everyone agrees that the money is not on
budget. Future funding is dependent on
creating model legislation.
667
Ms. McConnell
No money has been received from the tobacco
settlement. She acknowledged that the
governor's budget and the governor's bill
are not identical. She explained why they
are not identical.
818
Ms. McConnell
Emphasized that it is difficult to compare
FY99 to FY00. Pointed out that some things
that were funded through the bond bill will
have to be funded by general funds
893
Representative J.
Davies
Asked for more information regarding the
requirement for model legislation.
926
Ms. McConnell
Will provide further information.
945
Co-Chair Mulder
Adjourned the meeting at 3:25 p.m.
HOUSE FINANCE COMMITTEE
LOG NOTES
January 21, 99
HFC 7 1/21/99
| Document Name | Date/Time | Subjects |
|---|