Legislature(2023 - 2024)ADAMS 519
02/02/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Overview: Fy 23 Governor's Supplemental Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 2, 2023
1:34 p.m.
1:34:25 PM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 1:34 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
Neil Steininger, Director, Office of Management and Budget,
Office of the Governor.
PRESENT VIA TELECONFERENCE
Norm McDonald, Deputy Director of Department of Forestry
and Fire Protection, Palmer.
SUMMARY
OVERVIEW: FY 23 GOVERNOR'S SUPPLEMENTAL BUDGET
1:34:30 PM
Co-Chair Johnson reviewed the meeting agenda.
^OVERVIEW: FY 23 GOVERNOR'S SUPPLEMENTAL BUDGET
1:35:39 PM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced a PowerPoint
presentation titled, "State of Alaska, Office of Management
and Budget; Supplemental Budget HB54," dated February 2,
2023 (copy on file) and began on slide 2. He relayed that
in summary, the overall cost for the supplementals was
about $105 million in unrestricted general funds (UGF) and
$393 million in all funds. Supplemental budgets were for
the current fiscal year, meaning that the supplementals in
the presentation would be relevant to FY 23. The Office of
Management and Budget (OMB) worked to determine whether
there were any unforeseen events that might need a
supplemental or a need for additional resources that would
require an additional appropriation. There were also
supplementals for more technical items, such as an influx
of federal funds, or supplementals for the purpose of
changing the scope of an appropriation.
Mr. Steininger continued that the budget previously
included a placeholder of $85 million for the
supplementals, but the total was about $20 million greater
than the placeholder. The discrepancy adjusted the amount
of K-12 forward funding from a surplus in FY 23 down to
roughly $29 million. The $29 million figure represented the
total surplus between the projected FY 23 expenditures and
projected FY 23 revenues. The state needed to average about
$82.39 in price per barrel of oil to balance the FY 23
budget.
Representative Ortiz asked Mr. Steininger to remind him
what the forecasted price of oil was.
Mr. Steininger responded that the forecasted price was
around $81 or $82 for the entirety of 2023. The state was
in a better position than was originally projected in the
fall of 2022.
Representative Ortiz understood that the legislature hoped
to put $1.2 billion into forward funding for education when
session ended in 2022, but the number was now down to $29.2
million.
Mr. Steininger responded in the affirmative. When the
governor signed the budget in 2022, the projections were
roughly $2 billion between forward funding and the
constitutional budget reserve (CBR). The number was now $29
million.
1:40:00 PM
Co-Chair Johnson asked for the oil price to be repeated.
She thought the forecasted oil price was $88 per barrel.
Mr. Steininger responded that he was speaking from memory
and could be wrong. He would follow up with the exact
number.
Mr. Steininger continued on slide 3 depicting a chart of
fire suppression activity. One significant supplemental in
the governor's budget was $50 million for the cost of fire
suppression. The yellow section on the chart represented
the actuals, the green represented the base budget, and the
blue represented the supplemental appropriations.
Projecting fire suppression costs was challenging and the
base budget was often significantly less than the cost
incurred every year. In 2020, the base budget had increased
to roughly equal to the base in FY 18.
Representative Cronk assumed that the state had a
supplemental every year for fire suppression.
Mr. Steininger responded yes, with a few exceptions. In FY
16, FY 18, and FY 21 there were no supplementals. One
strategy employed by the state for fire suppression was
ratifications, which involved spending money that had not
yet been appropriated by the legislature. The tactic was
not ideal, but sometimes the situation called for it. For
example, the legislature might have already adjourned but
it was possible that more fires could occur on state lands
and therefore the Department of Natural Resources (DNR)
needed to continue to spend money. For practical purposes,
it might not make sense for the legislature to return to
approve supplementals. In the situations where spending
additional money was necessary, letters would be sent to
the presiding officers informing them that the
appropriation limit was about to be reached. The yellow
bars on the chart illustrated the situation.
Representative Stapp asked about the $50 million in
supplementals for fire suppression. Considering
inflationary pressure and high fuel costs, he wondered if
the $50 million figure could be a low estimate. He asked
what the confidence level was in the $50 million number.
Mr. Steininger responded that generally speaking, the
confidence level was not high, as the graph illustrated.
This was due to the unpredictability of fires and weather,
as well as whether the fire would be on state or federal
lands. He indicated that both were difficult to plan for
and predict.
Representative Stapp asked if there was potential for large
growth beyond the $50 million amount.
Mr. Steininger responded that $50 million figure was chosen
because there were fires at the end of the previous summer
that exceeded the initial appropriations. He was working
with DNR to craft an estimate of what might be needed for
fires in the spring. It was unclear whether $50 million
would be sufficient for the fire season, but at the current
stage, the estimate was the best information available.
Representative Hannan asked about the issue of the federal
reimbursements for state costs. She was aware of a large
supplemental for the fires in 2019 starting in FY 20 and
that there was a federal reimbursement for the
supplemental. She asked where and when the reimbursement
would show up. She had heard from OMB that it could take
several years for the money to return to the state. She
asked for the status of the reimbursement from the federal
government for the 2019 fire season.
Mr. Steininger responded that the reimbursement would show
up as a deposit back into the general fund. He deferred the
question as to the status of the reimbursement.
1:48:39 PM
NORM MCDONALD, DEPUTY DIRECTOR OF DEPARTMENT OF FORESTRY
AND FIRE PROTECTION, PALMER (via teleconference), responded
that the costs from the 2019 fire season were not yet
completely covered. Most of the funds were recovered in two
years, but there were parts of the negotiations that could
take up to five years. Some fire costs were reimbursed
through the Federal Emergency Management Agency (FEMA). The
reimbursement processes were still ongoing.
Representative Hannan recalled that around $100 million of
the fire costs were meant to be returned to the state. She
asked if her memory was correct. She understood that it
would still appear under the supplemental category even
though there were federal monies to offset the costs.
Mr. McDonald responded in the affirmative. He reported that
2019 was a record year for the federal reimbursement
process and the Swan Lake fire alone incurred about $50
million in costs. In 2019, many of the fires were in
federal jurisdiction and were eligible for federal
reimbursements. Unfortunately, during the 2022 fire season
spanning FY 22 and FY 23, most fires were on lands that
were under state jurisdiction and were therefore not
eligible for federal reimbursement. It varied from season
to season and year to year and was difficult to predict.
Mr. Steininger continued to slide 4, which showed a graph
related to the Department of Corrections (DOC). In FY 23,
DOC had about a supplemental of $21.3 million including
approximately $19 million UGF and $2.1 million in federal
funds. There were quite a few years where there were
supplementals for DOC for a variety of reasons. The
supplemental for FY 23 was due to an increase in population
in the correctional facilities, an increase in the number
of individuals released on electronic monitoring, and an
increase in individuals living in community residential
centers. There was also a capital supplemental for DOC for
the Lemon Creek Correctional Facility due to erosion issues
and structural damage incurred during heavy rains that
Juneau experienced in the summer of 2022. The inmates had
to be moved out of the area and redistributed throughout
the correctional system, and there was a requirement for
about $10 million in capital improvements to repair the
facility.
Mr. Steininger advanced to slide 5 and the Department of
Public Safety (DPS). In FY 22, there was a ratification of
expenditures and it was a closed fiscal year where the
expenditures exceeded the amount appropriated. There were
two components: an overall shortfall of $3.3 million in
costs associated with personal services within DPS and $3
million of unpaid central services costs. In FY 23, there
were three components within the supplemental for DPS:
$575.8 million of FY 22 expenditures shifted to FY 23, $2.6
million was needed for state equipment fleet increases, and
$5.7 million for other cost pressures most notably travel,
equipment, and new Alaska State Trooper positions that had
not been fully funded in the appropriations. As DPS filled
the positions, an appropriation was needed to fully fund
the cost of the new positions.
1:56:32 PM
Co-Chair Johnson asked for more details about the usage of
the $3.3 million shortfall in personnel services costs. She
asked if all trooper positions had been filled.
Mr. Steininger responded that the shortfall was a
combination of filling positions that had been vacant, but
not necessarily fully funded, and overtime for positions
that were already filled. In order to provide services to
the public, many of the troopers were required to work
overtime. Not every trooper position was filled in FY 22.
Representative Josephson asked if some of the supplementals
might be baked into the base budget in FY 24. He did not
think the supplementals appeared to be one-time costs.
Mr. Steininger agreed that the supplementals were not one-
time costs. He explained that the payment for the
depreciation of departmental vehicles was skipped in FY 22.
It was an ongoing cost that needed to be addressed in the
FY 24 budget. Several costs were addressed in the budget,
but he was working with DPS to understand spending trends
in FY 23 to ensure that it would not be an ongoing problem.
Representative Galvin asked if there were some lessons
learned in the area of funding public safety. She thought
of public safety as being the most important element the
legislature supported. She recalled that there was a slide
in a previous meeting that showed the high vacancy
percentages across state agencies. She knew there were some
other bills that aimed to help recruitment and retention.
She wondered if money could be saved in the long run if
wages were increased and benefits were improved upon.
Mr. Steininger replied that some of the strategies used by
the administration were aggressive recruitment efforts in
other states in an attempt to bring people up to the state.
Hiring bonuses had also been implemented to increase
recruitment. There had been some successes such as larger
trooper academies and he was optimistic that the trooper
positions would be filled and overtime costs would be
reduced.
2:01:34 PM
Representative Stapp understood that the department had a
vacancy rate that was above the budgeted vacancy factor
which elicited some amount of salary savings. He asked if
the $3.3 million was in addition to the money that had been
saved due to some positions remaining unfilled.
Mr. Steininger responded that the $3.3 million represented
the total after all of the money that had been available
due to the vacancies was consumed. He clarified that $3.4
million was spent as a result of overtime and other
factors.
Mr. Steininger advanced to slide 6 to discuss supplemental
operating budget items. The remainder of the items were not
as large as the previous supplemental items. He read
through the supplemental items for the Department of
Administration (DOA) on the slide. The items included an
increase in program receipt authority for an anticipated
increase in municipal case referrals and hearing activity
as well as lapsed lease payments for FY 22 that were not
entered by the end of the fiscal year. There was a shift in
the lease payments from DOA to the Department of
Transportation and Public Facilities (DOT) and the state
had to pay two years' worth of leases from the FY 23
budget. The money lapsed back into the general fund at the
end of FY 22 because the transaction did not post.
Mr. Steininger continued that the department also had to
relocate a local area network room in the Goldbelt Building
at a cost of $100,000, which was not accounted for in the
original budget. There were other supplemental items within
DOA that were associated with fiscal notes. In the case of
SB 131, the fiscal notes had the incorrect funding, and the
supplemental would correct the error. For HB 325, the
fiscal notes were associated with HB 5, which did not pass
but was merged into HB 325, and the fiscal notes from HB 5
were not attached to the new bill.
Mr. Steininger continued with supplemental items within the
Department of Commerce, Community and Economic Development
(DCCED). There was another fiscal note in the appropriation
process for HB 226 and some health insurance rate changes
that were addressed as supplementals that were missed in
the appropriation bill in 2022. Finally, there was a
technical item relating to extending the state match for
the Alaska Reinsurance Program.
Mr. Steininger advanced to slide 7 to speak on the
supplemental items within the Department of Education and
Early Development (DEED). The Alaska Arts Council received
an additional grant from the National Endowment for the
Arts of $125,000. The department had also seen an increase
in the costs for administrative hearings and legal services
that required a total of $105,000 in UGF. The Washington,
Wyoming, Alaska, Montana, and Idaho (WWAMI) program had a
contractual increase totaling $44,900 in UGF. Finally,
there were two corrections to language in the federal
relief for Individuals with Disabilities Education Act
(IDEA) and the multi-year federal authority appropriations.
Mr. Steininger continued to discuss supplemental items
within the Department of Environmental Conservation (DEC).
There was $175,000 in program receipts for permit
collections due to an increase in permitting as a result of
the Infrastructure Investment and Jobs Act (IIJA). There
was also $2.8 million in the capitalization for the Clean
Air Protection Fund (CAPF) which collected fees from
industries engaging in permitting activity. The fees were
held flat for three years during the COVID-19 pandemic.
Normally the fees were addressed on a rolling basis, but
due to the flattening of the fees, the department had to
drain some of the reserve funding and the $2.8 million
would return the funding to its normal state. In the
Department of Family and Community Services (DFCS), there
was a rate change related to a bill that was passed by the
legislature two years prior addressing the Alaska Pioneer
Home rates. The bill mandated that the department adjust
its rates on an annual basis and required $700,000 in
program receipts to collect the additional rate set in the
bill, which was just missed during the appropriation
process in 2022.
2:10:10 PM
Mr. Steininger moved to slide 8. In the prior year, the
appropriation bill included a "fuel trigger," which would
have given an appropriation to state agencies to pay for
the cost of heating fuel and fuel for vessels and cars
based on the price of oil. However, the fuel trigger was
vetoed because it had direct strings in terms of where the
money would be distributed. It was clear that the fuel
costs would not be distributed in the manner intended by
the appropriation bill. The cost of utilities, which
primarily paid for fuel for the Department of Fish and Game
(DFG), impacted some of the hatcheries and other
operational expenditures. There was also an issue related
to deferred maintenance in the Southeast region of the
state in fisheries management requiring $130,000 more than
anticipated.
Mr. Steininger continued on side 9. In the Department of
Labor and Workforce Development (DLWD), there was an
adjustment from program receipts to the general fund due to
a shortfall within the Alaska Vocational Technical Center
(AVTEC). The adjustment would ensure that AVTEC would not
need to lay off any professors. The department was also
looking to slightly change the scope of an appropriation
from the prior year related to workforce development and
ensure that the appropriation would be better deployed.
There was also $222,000 related to a workers' compensation
claim against the Workers' Compensation Benefits Guaranty
Fund (WCBGF). The WCBGF was included in the CBR sweep a
number of years ago and there were not enough funds in the
account to pay for the claim.
Mr. Steininger reported that a new employee had been hired
to manage some issues that had arisen in the Department of
Military and Veterans' Affairs (DMVA; however, the position
still needed to be funded. There was also a shortfall at
the Joint Base Elmendorf-Richardson (JBER) of $1 million
related to operating costs for the Army Guard. In the
Department of Natural Resources (DNR), there had been an
increase in permit applications related to IIJA that
required $200,000 in program receipts in order to collect
the fees for the permits. There was also about $100,000
needed to ensure that state parks remained open.
2:14:23 PM
Representative Hannan asked about the capitalization of
WCBGF. She understood that Mr. Steininger said that the
fund was swept, but her recollection was that the fund had
been accrued over multiple years. She asked if the $221,000
cost was meant to capitalize the fund for anticipated
claims for one year or more than one year.
Mr. Steininger replied that the $221,000 was associated
with a specific claim and did not reflect the total amount
swept from the fund. The decision was made to capitalize
the amount in order to ensure that the specific claim could
be paid for, but not capitalized for any additional
receipts. If further claims arose, the department would
have to strategize on how to address the additional claims.
Representative Hannan asked if some of the money was baked
in to the supplemental to continue to pay for it for the
next fiscal year. She asked if it was anticipated that
there would be a supplemental every year there was a major
claim, or if it would be capitalized by the regular
workers' compensation payroll contributions.
Mr. Steininger responded that the payroll contributions
would continue to be capitalized normally. Ideally, there
would not be another large claim and the fund would
continue to build-up, not be swept, and be self-supporting
in the future. Should there be a future claim that was in
excess of the amount in the fund, a supplemental might be
necessary.
Mr. Steininger moved to slide 10 and the supplemental items
under the Department of Revenue (DOR). He explained that
there was a planned cash room in Juneau to handle cash
payments from marijuana businesses. The department had more
cash than it had anticipated and did not feel comfortable
handling the cash within the existing security facilities.
The department had started the construction with existing
dollars but required another $150,000 to complete the
construction.
Co-Chair Johnson asked if the cash room dollars were
considered designated funds.
Mr. Steininger responded that the marijuana taxes went
three places: the Marijuana Education and Treatment (MET)
fund, the Recidivism Reduction fund, and the remainder went
to UGF. The MET and Recidivism Reduction funds were
designated funds that were essentially consumed by the
departments using them.
2:19:06 PM
Mr. Steininger explained that the Tax Revenue Management
System (TRMS) was being moved into the cloud, which was a
process that would require a supplemental of $187,000 in
UGF for FY 23. There were another two supplemental items
due to fiscal notes for HB 226 that were omitted in the
prior session in the final packet in the conference
committee. There was also $127 million in federal stimulus
for housing that was managed by Alaska Housing Finance
Corporation (AHFC) to manage its housing programs. Within
DOT, there was a supplemental for an advanced air mobility
and infrastructure study, which was sourced from the
International Airport fund and the Rural Airport Fund.
There were also 11 technical fund changes that needed to be
corrected from a fiscal note that was not updated at the
end of the prior session. Another DOT item was $2 million
in receipt authority to accommodate additional fuel cost
payments for the state equipment fleet, which was the
purchaser of fuel for most state vehicles.
Mr. Steininger advanced to slide 11, which continued on
with DOT supplemental items. There were a number of airport
contracts for the new Newtok and Mertarvik airports, which
had increased in price primarily due to the cost of fuel.
In Homer, the natural gas and water sewer assessments on
DOT facilities had increased several years prior and the
department had a backpay of a total of $180,000 in UGF. The
City of Fairbanks had been collaborating with DOT to better
maintain roads through a contract, which had an associated
cost of $200,000 over the amount that was normally
budgeted. At the rural airports in the Southcoast region,
there was a $49,000 increase due to the heightened cost of
fuel. For the international airports, there were several
items that were identified that could not fit within the
airports' existing budgets, such as supplies, advertising,
materials, shipping, and snow removal.
Representative Josephson asked if the department sought
supplemental monies for Anchorage's "snow disaster."
Mr. Steininger responded that DOT did not specifically seek
supplemental money for non-airport related issues. The
airports had to manage the snow as well but the department
was able to allocate resources within the existing budget
to manage the snow on the state roads at the airports.
Representative Josephson understood that the municipality
was responsible for maintaining partial sections of
streets. The municipality would cease its timely plowing
maintenance where its jurisdiction ended and cars could
simply not advance down the shared road. He thought there
were a lot of upset constituents in Anchorage and it was an
item that needed to be examined in the budget overall. He
was surprised that the department did not ask for a "life
buoy" and more support in November and December of 2022.
2:25:24 PM
Representative Hannan recalled that the international
airports in Anchorage and Fairbanks were self-funded to a
certain extent. Although the airports were included in the
supplemental, they earned revenue from fees and the money
would be returned to the state.
Mr. Steininger responded in the affirmative. The fee
collections from the air carriers were shown on slide 11.
Representative Hannan asked for confirmation that the
legislature was just authorizing the billing and receipts
of monies that the vendors and user would pay. The monies
would not be coming out of other state revenue sources.
Mr. Steininger responded in the affirmative.
Mr. Steininger moved to slide 12. All items were
international airport items where additional costs were
identified that could not be accommodated in the airports'
existing budget. Expenses included items like heating fuel
and mission critical incentive pay, which was an employee
incentive bonus to ensure that there were enough ground
crew and plow drivers to keep the airport open through the
winter.
Co-Chair Foster commented that he did not see Alaska Marine
Highway System (AMHS) on the supplemental list. He asked if
there was a reason for the exclusion and whether amendments
could be expected.
Mr. Steininger responded that he was working with the
department on whether AMHS would need a supplemental budget
adjustment or whether it would need an adjustment in a
future year's budget. In the FY 23 budget, AMHS had a $20
million contingent appropriation should the federal
receipts be insufficient to meet the appropriation. It was
still unknown whether the $20 million appropriation would
be sufficient for operations if the contingency was met. If
it was not sufficient, he anticipated that additional funds
would be combined with capital funds matching efforts as
one entire package.
Mr. Steininger advanced to slide 13. After the close of the
2022 legislative session, the University of Alaska (UA)
negotiated compensation increases with its staff and
faculty which would cost $6.5 million in FY 23. There were
also appropriations proposed in FY 24 for continuing costs
that were negotiated in the contract.
Representative Josephson understood that the university was
responsible for compensation for its own employees. He
noted that a compensation boost was included in HB 226 for
exempt and partially exempt employees. He thought that
implementing a similar boost for university staff was more
difficult for the legislature to accomplish. He asked if
Mr. Steininger understood the process.
Mr. Steininger responded that the university had some
covered employees and some exempt employees. The slide was
only addressing the compensation negotiations for the
covered employees. However, Representative Josephson was
correct in that university employees were not covered in HB
226 because they were defined differently than a standard
state employee in statute.
Representative Galvin referred to slide 9 and noted that
there were only supplementals for university faculty and
staff. She recalled that Mr. Steininger had mentioned the
number of existing vocational training opportunities was
due to a shortfall in student receipts as student numbers
had decreased. She wondered if the university experienced a
similar problem due to the change in student numbers.
Mr. Steininger responded that the student receipts on slide
9 were associated with AVTEC, which was separate from the
university system. The university system had its own
challenges with attracting students, but it did not
necessarily have the same budget considerations as AVTEC.
2:31:57 PM
Mr. Steininger continued on slide 13. There was a
supplemental item for the legislature for health insurance
rate changes that were omitted from the FY 23 budget.
Additionally, there was a supplemental for attorney salary
increases under HB 226 which was omitted from a fiscal note
in 2022.
Mr. Steininger moved to slide 14 and supplemental capital
budget items. Under DOA, federal receipts flowed in for the
sale of federal property managed by DOA within the surplus
property program. The federal receipts could be used for a
variety of activities, but DOA was intending to use the
receipts to add office space and a storage mezzanine to the
federal warehouse. In DCCED, the Alaska Energy Authority
(AEA) introduced a new defense community infrastructure
pilot program that came about due to IIJA and required
about $13 million in federal receipts. There was also a new
state energy program under AEA that came about due to IIJA.
In DFG, there were a number of new programs funded by the
Exxon Valdez Oil Spill Settlement (EVOSS) monies. The two
listed on the slide were the Chugach regional ocean
monitoring program and a Prince William Sound kelp
mariculture development program for habitat restoration and
the local economy.
Mr. Steininger advanced to slide 15 and the remainder of
the EVOSS projects, including mariculture opportunities,
community restoration, natural history symposium, funding
for habitat protections, and more. There was a council of
state and federal representatives that decided how the
settlement money was spent, however the money was still
appropriated through state appropriation vehicles. In DNR,
there was a $5 million federal program item related to
community lidar [light detection and ranging] collection.
Mr. Steininger continued to slide 16. Under DOT, there were
a number of federal awards and associated matches related
to the aviation improvement program. The items were above
and beyond what was originally appropriated for the
improvement program and were essentially additional Federal
Aviation Administration (FAA) dollars that the state could
collect as long as it could provide the $1.7 million match.
Under UA, there was a $4 million federal program related to
workforce expansion and diversity funding at the University
of Alaska Anchorage (UAA). Additionally, UA was requesting
$30 million in university receipts and $30 million in
federal receipts to address a variety of capital projects
and maintenance work on some of the university facilities.
2:36:11 PM
Co-Chair Johnson asked for the definition of UA workforce
expansion and diversity funding.
Mr. Steininger deferred the question to representatives
from the university, but they were not available. He would
follow up with additional information.
Mr. Steininger moved to slide 17 to speak on several
technical appropriations. Many of the items were related to
items that had originally been appropriated to one agency,
but it was later determined that the items would be better
suited under another agency. The first was the IT
modernization for the retirement system which was
originally located within the Office of the Governor and
would be moved to the Division of Retirement and Benefits
within DOA. The final item was a repeal of an IT project
within the Permanent Fund Dividend Division. The project
was completed on time and under budget and the item would
repeal the remaining funding and allow it to lapse back
into the dividend fund.
Representative Josephson remarked that he had sometimes
seen supplemental budgets pass within the first 30 days of
session and sometimes the budgets had taken much longer. He
thought that passing a supplemental early on in session
could mean that urgent projects were not addressed in a
timely manner. He wondered if Mr. Steininger would like to
make a case as to why the supplementals should be passed
swiftly.
Mr. Steininger responded that he would always encourage
prompter action on the supplemental budget given that the
items were often urgent needs that could not be
accommodated within the existing budget. Some of the items
allowed for a longer time period for action and if the
items were appropriated today, there would be more time to
work on the projects. If an item was appropriated on June
30, the work on the project would begin on that day. In
other cases, such as appropriations for DPS, there were
items that needed to be appropriated in a timely fashion in
order to avoid causing operational challenges. If the IT
system was not transferred to DOA until the last day of
June it would not impact operations, but there were
situations in other departments that could cause
operational challenges if not appropriated in a timely
manner. During his time at OMB, most supplemental budgets
passed around June and OMB worked with the impacted
agencies to minimize the severity.
2:41:00 PM
Co-Chair Edgmon asked if approving the supplemental now
would require a CBR draw and a three quarters vote.
Mr. Steininger responded that based on current revenue
projections, it would not. There would be $29 million
remaining in FY 23 revenue and it would not cause a deficit
under the current projections.
Co-Chair Edgmon thought it was interesting because he
understood that oil needed to be $82 per barrel to balance
the budget. He understood that the projections were $88 per
barrel, but Mr. Steininger was reporting that the numbers
were between $82 and $88 per barrel.
Mr. Steininger responded that the current oil price was
slightly below the $82 dollar range, but $82 was the
average needed for the remainder of the fiscal year. When
the official revenue forecast was updated in the spring,
OMB would need to reassess the surplus or deficit for FY 23
and determine whether another source needed to be utilized
to meet the appropriation need.
Co-Chair Edgmon understood that if the legislature adopted
the governor's FY 24 budget without making any changes, the
CBR draw would be $200 million. He asked if he was correct.
Mr. Steininger responded that it would be roughly $265
million.
Co-Chair Edgmon commented that the number was based on the
price of oil and the spring revenue forecast could deviate
from the projections. He thought it could show how quickly
things could change with oil prices.
Co-Chair Johnson asked if Mr. Steininger anticipated an
additional fire suppression request.
Mr. Steininger responded that he was working with the
department on the spring projections. It was not yet
determined whether the fires that occurred in the prior
year were partially on federal lands and eligible for
federal reimbursement. He would return to the committee at
a later date with additional information related to fire
suppression.
2:44:34 PM
Co-Chair Foster asked if the $105 million UGF supplemental
was the same, smaller, or larger than supplementals in the
previous four years.
Mr. Steininger responded that excluding the $50 million for
fires, there had been years with larger supplementals, but
he thought the FY 24 was on the high side of the middle
range. He could provide a report of supplemental
information for the last ten years.
Co-Chair Foster asked whether Mr. Steininger expected
amendments to be proposed not just for fire suppression,
but for any items. He asked if there was a possibility that
there would be amendments in the $10,000 range, $100,000
range, $100 million range, and so on.
Mr. Steininger responded that he could not put a number to
it yet. He relayed that he was working with the agencies on
the amended budget process. The amendments would be
released on Feb 15.
Co-Chair Johnson reviewed the agenda for the next meeting.
2:46:29 PM
ADJOURNMENT
The meeting was adjourned at 2:46 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY2023_Supplemental_Summary_1-31-23.pdf |
HFIN 2/2/2023 1:30:00 PM |
HB 54 |
| FY2023_Supplemental_Backup_1-31-23.pdf |
HFIN 2/2/2023 1:30:00 PM |
HB 54 |
| FY2023_Supplemental_Bill_Summary_Spreadsheet_1.31.2023.pdf |
HFIN 2/2/2023 1:30:00 PM |
HB 54 |
| 23.02.02 OMB Supplemental Budget Overview HFIN - slide 4 change.pdf |
HFIN 2/2/2023 1:30:00 PM |
HB 54 |
| OMB 2.2.2023 HFIN Supplemental Response.pdf |
HFIN 2/2/2023 1:30:00 PM |
HB 54 |
| OMB - HFIN Attachment 1 - UAA Health Workforce Expansion and Diversity Funding - Phase 1.pdf |
HFIN 2/2/2023 1:30:00 PM |
HB 54 |
| OMB -HFIN Attachment 2 - Supplemental 10 year lookback.pdf |
HFIN 2/2/2023 1:30:00 PM |
HB 54 |