Legislature(2023 - 2024)ADAMS 519
02/15/2024 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Overview: Fy 25 Governor Amended 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 15, 2024
1:40 p.m.
1:40:50 PM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 1:40 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; Dom Pannone, Director, Program
Management and Administration, Department of Transportation
and Public Facilities.
PRESENT VIA TELECONFERENCE
Josephine Stern, Admin Services Director, Department of
Health; Eric Demoulin, Administrative Services Director,
Department of Revenue.
SUMMARY
OVERVIEW: FY 25 GOVERNOR AMENDED BUDGET
Co-Chair Johnson reviewed the meeting agenda.
^OVERVIEW: FY 25 GOVERNOR AMENDED BUDGET
1:41:48 PM
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced a PowerPoint
presentation titled "FY2025 Governor Amended Budget: House
Finance Committee," dated February 15, 2024 (copy on file).
She relayed that amendments were released on February 14.
The presentation included capital and operating amendments
for the FY 25 budget and FY 24 supplemental items. She
referenced additional handouts labeled "Attachment A, B, C,
and D" (copy on file). She began an updated fiscal summary
showing FY 24 management plan and supplementals on the left
and the FY 25 governor's amended budget summary on the
right.
Ms. Sanders began with FY 25 changes incorporated into the
fiscal summary on slide 2. The amended budget included an
increase of $20.8 million of unrestricted general funds
(UGF), $2.5 million of designated general funds (DGF), $8
million of "other" receipts, and $295 million in federal
receipts. She would provide details on the numbers in the
coming slides. The amended budget included a UGF decrease
in capital items of $11.7 million, a DGF increase of $2.5
million, an increase in "other" receipts of $2.8 million,
and a decrease in federal receipts of $52 million. The
overall total change was a capital budget decrease of $58.3
million and an operating budget increase of $326.2 million.
th
Ms. Sanders highlighted the February 14 supplemental items
on slide 2. The items resulted in a change of $500,000 in
statewide items. The supplemental capital items totaled an
additional $15.4 million made up of $11 million UGF, $1.2
million in other receipts, and $3.2 million in federal
receipts.
Ms. Sanders stated the remaining surplus was $344 million
after the amendments. She relayed that the overall change
for the FY 25 budget resulted in a deficit of just under $1
billion. The governor's budget proposed filling the deficit
with funds from the Statutory Budget Reserve (SBR) and
Constitutional Budget Reserve (CBR).
1:46:13 PM
Ms. Sanders moved to slide 3 titled "Operating Governor
Amend Requests." She referred to Attachment A (copy on
file) beginning on lines 1 and 2 showing two increments for
the Department of Administration (DOA) Division of Finance.
The first increment was $180,000 in one-time funding for
moving expenses. She detailed that DOA's lease at the
Michael J. Burns building was expiring and the division
would move to the State Office Building; the department
needed authority to make the transition from one building
to another. The second increment was an increase of
$217,000 in "other" receipts to address the state's
accounting and human resources systems ALDER and IRIS. She
explained there were increased costs for the systems for
security and functionality, which would be funded with
interagency receipts.
Ms. Sanders addressed three changes within the Office of
Information Technology. The two changes were $526,000 for
security licensing and $710,000 for 24/7 security logging
related to Microsoft security and ensuring the systems were
in compliance and protected against cyberattacks and other
items that may impact system security. The third change was
an increase of $575,000 to maintain cloud services
following the transition from on-premise servers in FY 24.
Under the Department of Commerce, Community and Economic
Development (DCCED) there was an increase of $600,000 in
receipts for the Division of Corporations, Businesses, and
Professional Licensing (CBPL). The division experienced
significant increases in its operations as it was serving
the public and ensuring licensing processing was done in a
timely fashion.
1:50:06 PM
Ms. Sanders continued to review requests in the governor's
amended budget. The Alcohol and Marijuana Control Office
(AMCO) was seeking a one-time increment of $102,000 to
continue implementation of Title IV, the alcohol statute
rewrite. She detailed that AMCO received money through
Senate Bill 9 in 2023 and the office requested a
continuation of the non-permanent position for one
additional year to continue the work. There was $340,000
for the Division of Community and Regional Affairs to work
with the Alaska Native Tribal Health Consortium (ANTHC) on
a Natural Hazard Planning Assistance Program. She detailed
it was a three-year project and DCCED was requesting the
funding from ANTHC to pay for the project to support
communities in disaster planning.
Representative Hannan did not see the disaster planning
under DCCED on Attachment A. She asked for the item number.
Ms. Sanders directed attention to the language items on
page 8, line 62. She explained that the packet reflected
the way the budget bill was generated; therefore, language
items were at the back.
1:51:59 PM
Representative Galvin looked at requests for DOA technology
security. She referenced the requests of $526,000 and
$710,000. She observed that one of the projects was a
multiyear increment. She thought it sounded like something
the state may have known about. She wondered why it had
been added in the amendments.
Ms. Sanders responded that the initial funding to
transition was provided in a multiyear increment. She
explained it was determining when the funding would be
completely spent. She detailed that now that the funding
was no longer available it was necessary to move forward
with the request and finish the work.
Ms. Sanders addressed two amendment requests under the
Department of Education and Early Development (DEED). The
first was a $75,000 request to convene a panel for the
Alaska Reads Act. She elaborated that the prior legislation
provided for the department to convene a panel and report
back to the State Board of Education with recommendations
on the legislation. The second request was for $51,900 of
general fund match for the Carl D. Perkins Career and
Technical Education federal reward. The $5.8 million
federal reward required $293,000 state matching funds; in
order to meet the requirement, DEED needed the additional
$51,900.
Co-Chair Edgmon asked if there was money for the Reads Act
panel to meet in rural Alaska.
Ms. Sanders believed it would partially be accomplished by
videoconferencing. She suggested perhaps the department was
available online to answer the question.
Co-Chair Edgmon highlighted there was a reference to the
lens of cultural inclusion, which was an ongoing topic with
the Reads Act. He stated there were many hearings that led
up to the passage of the bill in 2022. He recalled asking
whether there was money for DEED to travel to rural Alaska.
He wondered if there should be a funding request for travel
to the bush.
Ms. Sanders responded that she would follow up with DEED to
determine its plans.
1:55:41 PM
Ms. Sanders moved to two amendment items for the Department
of Environmental Conservation (DEC). The first item was a
change to an item submitted in the governor's original
budget. She explained that DEC needed to relocate its air
quality lab. The governor's original budget only included
an $87,000 increment for FY 25; however, it had been
determined after further discussions with DEC that the same
amount of funding was needed over two years. The item was
requested as a supplemental to be spent over FY 24 and FY
25 in order for DEC to get started on the move as soon as
possible. The second item was just over $1.1 million in
federal receipts for a federal inflation reduction act
grant for DEC to conduct emissions inventory over a four-
year period.
Ms. Sanders addressed five increments for the Department of
Family and Community Services (DFCS) all associated with a
juvenile justice counselor salary completion study that had
been completed by DOA's Division of Labor Relations. The
increments reflected the implementation and included
supplemental requests as implementation was occurring in FY
24. The increments also brought the cost online for 2025.
Representative Stapp stated that the topic of juvenile
justice officers and pay had come up frequently the
previous session. He asked how the implementation of the
salary study had changed the vacancy rate. He recalled that
the vacancy rate had been around 50 percent.
Ms. Sanders responded that there had not yet been a change
in the vacancy rate because the study results were
currently being implemented. She stated that hopefully
there would be a change in the vacancy moving forward.
1:58:28 PM
Ms. Sanders addressed two items within the Department of
Fish and Game (DFG) within the State Subsistence Section.
The first increment was $205,000 UGF to address
inflationary cost increases impacting utilities, travel,
and fuel. The second increase was $210,000 in federal
Pittman Robertson funds coming to the department for
wildlife conservation projects.
Ms. Sanders moved to increments for the Department of
Health (DOH). The largest item contributing to the budget
change was $21 million UGF to bring the matching funds for
Medicaid up to the need projected by DOH. Additionally,
there was $293.7 million in federal funds to accurately
reflect federal receipts to be collected for Medicaid.
Representative Stapp observed that syphilis money had been
put back in from the FY 24 multiyear appropriation. He did
not see the tuberculosis money put back in. He asked why.
Ms. Sanders confirmed that $2 million was added for
congenital syphilis efforts. She relayed that OMB was still
working with DOH to understand the data collected with the
last funding increment for tuberculosis was effective.
Representative Stapp looked at the Medicaid increase. He
thanked OMB for including the federal receipt authority
amount. He remarked that almost all of the UGF increases
appeared to be provider rate rebasements. He looked at the
$5 million associated with the resource based relative
value scale (RBRVS). He understood it was a physician
services reimbursement for Medicaid fee-for-service. He
asked for the percentage and what it meant.
Ms. Sanders deferred the question to the department.
JOSEPHINE STERN, ADMIN SERVICES DIRECTOR, DEPARTMENT OF
HEALTH (via teleconference), replied that she would follow
up with the precise percentage for the RBRVS increments.
Representative Stapp asked if the rebasements required by
the state. Alternatively, he asked if DOH made the
determination it wanted to increase the reimbursement rates
specifically for physician services.
Ms. Stern answered that the RBRVS rate was a federally
required rate increase. She offered to provide a detailed
breakdown on whether the other rates were required or
department initiated increases.
2:02:50 PM
Co-Chair Edgmon looked at item 12 Inflation Reduction Act
Climate Pollution Grant of $3 million and the budget item
of $1.1 million [to DEC]. He was interested in additional
detail and had previously been unaware of the program. He
remarked that there had been work in smaller communities
since 2005 and there was now a large infusion of money. He
would make a note to meet with DEC separately on the topic.
Ms. Sanders answered that she would have the Air Quality
Division follow up with the information.
Co-Chair Edgmon replied that he would have the discussion
with the department offline.
Ms. Sanders moved to two items for the Department of Labor
and Workforce Development (DLWD).
Co-Chair Johnson requested Ms. Sanders to refer to the
lines associated with the items she was discussing.
Ms. Sanders relayed that lines 24 through 27 for DLWD were
clean up items reflecting transfers between components to
ensure the budget included the appropriate Technical
Vocational Education Program (TVEP) and State Training
Employment Program (STEP) authority in the correct place.
The largest change was item 25 showing an increase in
projected revenue for STEP in the amount of $1.6 million;
therefore, DLWD was requesting additional authority to
ensure it could provide the grants and services the funding
was used for when collected. Line 26 showed $118,000 for a
workers' compensation hearing officer study implementation
by DLWD. She detailed that DOA's Division of Personnel and
Labor Relations completed a study, and the funding would be
directed to the implementation.
Ms. Sanders moved to the Department of Natural Resources
(DNR) on line 28. The increment was $578,000 for a lease in
Fairbanks for the Division of Geological and Geophysical
Surveys. She elaborated that the division's 10-year lease
expired and it had worked with the Facilities Section
within the Department of Transportation and Public
Facilities (DOT) to try to find a new location; however, it
had been unable to do so. The division was entering into a
new lease for its current space with an increased cost of
$578,000 annually. Additionally, there was $1 million for
the Division of Geological and Geophysical Surveys to
provide Alaska's future with geothermal energy. The
division would be standing up geothermal categorization
work through the establishment of a few new positions. The
department would work with the University of Alaska,
federal, Native, and private sector partners.
Co-Chair Edgmon remarked that it was an interesting item
that tied into a couple of projects under the Renewable
Energy Grant Program the previous year in addition to money
the university was seeking. He stated there was a bigger
picture behind the increment request and he wanted to have
a more in depth conversation on the topic and some point.
2:07:24 PM
Ms. Sanders responded that there was staff listening to the
meeting and OMB would ensure to follow up with additional
information. She addressed the Department of Public Safety
(DPS) starting on line 30. There was a compensation study
for forensic scientists 1 through 3 completed by DOA's
Division of Personnel and Labor Relations and line 30
reflected the wage increase for the positions. She noted
the increase was spread through multiple items. She moved
to line 31 to identify federal grant funds that could be
used for the Village Public Safety Officer (VPSO) program.
One of the grants was to provide safety gear. She explained
that federal receipt authority would enable the department
to receive the $25,000 if awarded.
Ms. Sanders addressed line 32 showing a technical
correction to the restorative justice account. She
elaborated that the Department of Revenue annually
calculated the amount of Permanent Fund Dividends (PFDs)
that would have gone to convicted felons and the funds were
allocated in the budget to various entities. She explained
that statute provided for a certain percentage to each of
the entities. There had been a miscalculation in the
governor's budget and $99,000 should be replaced with
restorative justice accounts. She noted there was an offset
later where the funds were deposited into another fund
under fund capitalizations. Item 33 was the same item, but
it allowed for the expenditure from the restorative justice
account for the Violent Crimes Compensation Board.
2:10:44 PM
Ms. Sanders moved to item 34 showing a $250,000 increment
for a new division director for the Victim Services
Division requested by DPS. She explained that DPS was
organizing all of its victims' services functions into a
new division so that all of the work provided to victims
would be coordinated.
2:11:24 PM
Representative Coulombe returned to the restorative justice
account. She referenced a decrement and an increment
associated with the account and thought the information was
a bit confusing. She stated her understanding that the
percentage was a bit too high in the governor's budget. She
thought the percentage was supposed to be 10 to 12 percent,
but it was 14 percent in the budget. She asked if the
proposed amendments would take that back and give it to
DCCED. Alternatively, she wondered if the items were
separate.
Ms. Sanders answered there was just over $9 million
available. She detailed that percentages of the amount were
allocated to different purposes. The governor's budget
allocated 4 percent [from the restorative justice account],
which exceeded the statutory limit of 3 percent. Therefore,
the governor's amendments reduced the amount, which made
some of the available funding to go to another organization
within the statutory framework.
Representative Coulombe asked if the decrement was going to
another organization. She asked if Ms. Sanders was
referring to VCCB [Violent Crimes Compensation Board].
Ms. Sanders agreed. She relayed that OMB had a spreadsheet
breaking out the percentages going to each of the
organizations that she would provide the committee later
on.
Representative Coulombe stated she was aware of the
percentages. She asked if there was any UGF filling the
difference.
Ms. Sanders answered that item 32 was a fund source change
that reduced restorative justice funds and replaced the
funding with UGF. She pointed out that item 33 showed
additional available funding that was not offsetting and
went to the Violent Crimes Compensation Board.
2:13:59 PM
Representative Hannan referenced item 34 and asked if the
submitted budget did not include the new DPS director
position.
Ms. Sanders replied affirmatively. She explained that when
the original budget was submitted, the roles of the
existing executive directors in some of the other
organizations and how they interacted with DPS leadership
was unclear. The department had provided the structure to
OMB and there was a request for an executive director
position to oversee the new division.
Representative Hannan asked for verification that DPS did
not initially believe it needed a new director for the new
division; however, it had decided a new director position
was necessary.
Ms. Sanders agreed.
Co-Chair Edgmon asked if the funding for the VPSO director
would be embedded in the overall funding for the VPSO
program.
Ms. Sanders did not believe the VPSO program was under the
Victim Services Division.
Co-Chair Edgmon agreed. He observed there was not a budget
request for the new VPSO division director. He asked if the
funding for the position was embedded in the VPSO program.
Ms. Sanders confirmed that the VPSO director was in the
VPSO budget. She clarified that it was different than
victim services.
Co-Chair Edgmon recognized that and thanked Ms. Sanders for
the information.
2:16:10 PM
Ms. Sanders moved to an increment on line 35, which ensured
sufficient federal receipts within the admin services
component for DPS. Line 36 reflected a compensation study
for the criminal justice services administrator 1 and 2
class series. The increment ensured DPS had sufficient
funding to pay for the salary changes.
Ms. Sanders turned to page 5, item 37 on the Attachment A
spreadsheet. The DPS item was a continuation of the salary
study for forensic scientists. She explained that the item
appeared in multiple components throughout the DPS budget.
Item 38 was a request to expand the state's toxicity lab
testing and testimony. The request added a full-time
forensic scientist chemistry position that would be located
in Anchorage. She elaborated that DPS had experienced a
significant increase in the number of tests required for
driving offenses associated with being under the influence
of alcohol or marijuana. The lab needed an additional
position to be the expert providing the testing and
testifying when criminal offenses went to court.
2:18:11 PM
Ms. Sanders addressed a salary adjustment of $161,000 for
the Alaska Retirement Management Board (ARMB) under the
Department of Revenue (DOR). She explained that the salary
adjustments included in the governor's original budget
inadvertently excluded the item when transferring funding
from one component to another. Item 40 was for the Child
Support Enforcement Division within DOR. The division
received federal reimbursement for foster care children
eligible under Title IV. She explained that when the number
of eligible children decreased, the division was unable to
collect the federal receipts. There was a decline in the
number of eligible children and the division was requesting
a fund source change from federal receipts to UGF as costs
remained the same. Item 41 pertained to a salary study for
a child support enforcement specialist within the Child
Support Enforcement Division. The study was completed in
November of 2023 and resulted in an increase to pay
salaries for FY 25.
2:20:13 PM
Representative Stapp referenced the spreadsheet explanation
for item 40 specifying that a portion of child support
enforcement activities supporting children in state foster
care were not eligible for federal reimbursement under
Title IV. He asked what activities were not covered by the
federal funding.
Ms. Sanders clarified it was work completed by the Child
Support Enforcement Division, not the Office of Children's
Services. She explained that if a child was ineligible for
the federal funding, the division could not collect federal
receipts.
Representative Stapp asked what the difference was
pertaining to Title IV.
Ms. Sanders responded that she did not know the difference.
She deferred the question to DOR.
2:22:02 PM
ERIC DEMOULIN, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF REVENUE (via teleconference), asked Representative Stapp
to repeat the question.
Representative Stapp complied. He asked for the difference
between the children that were eligible for federal receipt
authority versus those who were not. He asked about
services that were eligible and those that were not.
Mr. Demoulin responded he would follow up on the Title IV
eligibility criteria and would provide a response in
writing. He stated it had to do with benefits being
received that was also within the Department of Health and
Social Services.
Representative Josephson remarked that the class studies
always resulted in increases, which did not surprise him.
He asked if there was a way to know what percent were
complete. He asked about the pecking order. For example, a
child support enforcement specialist was getting a pay
raise, while other positions that were not yet studied were
not receiving increases. He asked if his understanding was
correct.
Ms. Sanders answered that classification studies were
difficult in terms of how to pick. The DOA Division of
Personnel and Labor Relations maintained a list, which was
quite extensive. She relayed that union input went into the
list and there was also a first in first out portion of the
list. She remarked that there was a limited capacity in the
state to complete studies. She had been told that it would
take four years to complete the salary studies on the
current list. The state was in the process of completing a
statewide salary study. The hope was that the statewide
salary study would decrease the need for the individual
study requests. She relayed that the number of requests had
been increasing to ensure employees were being paid for
like work performed.
2:25:27 PM
Ms. Sanders addressed line 42 pertaining to DOR's Criminal
Investigation Unit. The division was made up of seven
investigators and one support staff. The division was lucky
enough to not have experienced vacancies, but due to a
vacancy factor applied to the division, it was short
funded. She explained that it was a very small division
that did not have the capacity to transfer from other lines
to pay for the cost of paying its employees.
Ms. Sanders briefly highlighted item 43 showing a $150,000
request from the Alaska Permanent Fund Corporation (APFC)
to work on a communications plan.
Representative Galvin looked at line 42 pertaining to DOR's
Criminal Investigation Unit. She asked for verification
that the unit had not been budgeted for full staff and
because the unit was fully staffed it required additional
funding.
Ms. Sanders answered that there was a vacancy factor for
every component. She explained that it was not uncommon for
smaller divisions to have no vacancy factor. She confirmed
that the Criminal Investigation Unit did not have
sufficient funding to pay for 100 percent of its staff. The
amendment would ensure the unit had sufficient funding to
pay its staff for the year.
Representative Galvin asked if it was not typically
absorbed within the department depending on how different
agencies within the department were doing with their
vacancy.
Ms. Sanders replied, "No." She explained that it was not
possible to cross certain appropriation lines. She used the
Department of Corrections as an example and explained that
all of its institutions were in the same appropriation,
meaning funds could be moved around to cover needs.
However, if a division was on its own, funds could not be
moved from another division to help absorb the vacancy.
Representative Galvin commented that it was an unusual
problem.
2:28:41 PM
Representative Hannan asked if it was the only place in the
budget where an agency was fully staffed with no ability to
absorb the cost.
Ms. Sanders responded that she could not think of another
instance in the current budget, but it was not uncommon,
especially in small divisions with very few positions.
Representative Hannan remarked that she would like to see
more divisions with the problem of a zero vacancy.
Representative Coulombe referenced the APFC request for
funding to enhance a communications program. She asked if
the funding was UGF.
Ms. Sanders replied that the funds would come from APFC
receipts, not general funds. She explained that it was the
funding source APFC used to pay for its services.
Representative Coulombe asked what the [APFC communications
program] campaign was supposed to be doing. She asked if
the corporation was trying to attract talent or get its
brand out there.
Ms. Sanders replied affirmatively but deferred to APFC for
more detail. She offered to follow up to provide more
detail.
Co-Chair Edgmon noted there was an APFC open house that
evening. He remarked that he may ask about the item at the
event.
2:31:21 PM
Ms. Sanders moved to line 44 pertaining to DOT.
Representative Ortiz looked at an $8,365,000 in UGF. He
asked for detail.
Ms. Sanders referred to item 66 on page 8 for the Alaska
Marine Highway System (AMHS). There had been a $10 million
one-time appropriation in the FY 24 budget. She explained
that a reversal of the one-time funding was not included in
the OMB information when the governor's original budget was
published. She elaborated that the Legislative Finance
Division pointed it out and had included the reversal in
its information. She explained that the one-time funding
had to be reversed out; it was a technical correction to
ensure the budget accurately portrayed what should or
should not be included.
Ms. Sanders returned to line 44 for utility cost increases
for various regions within DOT. She expounded that various
regions experienced a 15 percent utility cost increase and
continued to experience inflationary cost. She moved to an
increase of $480,000 on line 45 associated with an
agreement with the Municipality of Anchorage for the
Transfer of Responsibility Agreement (TORA). The cost for
the responsibility of the state-owned traffic signal system
had increased in the Anchorage area and resulted in the
need for additional funds. Line 46 included $500,000 to
support agricultural road maintenance. She explained that
it involved the state assuming responsibility for
maintenance and operations of roads that did not currently
have oversight.
Representative Stapp referenced Ellison Farm Road and other
areas possibly in Representative Cronk's area. He stated
there were road service areas in the borough that received
money for the purpose. He referred to Ms. Sanders'
statement that the state was taking over the maintenance.
He thought it was fine, but he wondered why not contract
someone to do the work, unless the state wanted DOT to do
that too.
Ms. Sanders deferred the question to the department.
DOM PANNONE, DIRECTOR, PROGRAM MANAGEMENT AND
ADMINISTRATION, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES, responded that he did not have all of the
details at present. He explained that the increment
addressed roads where the ownership was unclear and that
served mostly rural and agricultural areas. He stated it
was very likely the state would be able to contract the
roads out to contractors with graders. He would follow up
with additional information.
2:36:17 PM
Representative Galvin was unclear on where the agricultural
roads were located. She asked if they were primarily
located in the Interior such as the Mat-Su Valley. She
remarked that additional information would be helpful
especially in light of the half million dollar price tag.
Mr. Pannone responded that the funding was an increment to
DOT's Northern Region highways and aviation component. He
noted the Northern region was one of DOT's three regions in
the state.
Representative Cronk shared that the governor had traveled
to Nenana and there were some rural agriculture areas where
the state had put in roads that were not maintained. The
areas were producing food and some were asking for a little
help and requesting a grader blade twice a year. He
reiterated that the state had put in the roads and the
increment would help the farmers by semi-maintaining the
roads and enabling customers to access the areas.
Representative Hannan remarked that when the state had done
the Nenana project and put roads in, it had used Department
of Natural Resources (DNR) money to build the road and put
the bridge in. She believed that if the state was going to
build roads it needed to maintain them. She asked if DNR
had exhausted all of the money for the roads.
Alternatively, she wondered whether DNR still had money for
development and DOT would be responsible for maintaining
the roads.
Ms. Sanders replied that she would do some research and
follow up.
Representative Cronk clarified he was speaking about roads
prior to the Nenana-Tokchaket agriculture area. He
elaborated that they were agriculture areas that he
estimated were done 30 years ago. He remarked that the
state had put the roads in and had left them for people in
the areas to figure out on their own. He stated it had been
a road service area in the past, but it was defunct and
there was no way to figure out where the funds were.
2:39:17 PM
Ms. Sanders moved to line 47 reflecting receipt authority
for rural airport leasing receipts for law enforcement
support in Adak. She detailed that staff were flown on the
plane to provide law enforcement screening for the rural
Adak airport.
2:40:13 PM
AT EASE
2:41:06 PM
RECONVENED
Ms. Sanders stated that the last items for DOT were for
international airport systems and funded with "other"
receipts. There were several items that address audits,
financial services, training and screening programs, an
increased contract for parking at the Ted Stevens
International Airport, and the completion of an airport
police and fire class study. She moved to the University's
budget. She addressed a project under the University budget
that had originally been funded with mental health trust
receipts. She explained that the Alaska Mental Health Trust
Authority (AMHTA) had worked with the University and
determined the project would not move forward; therefore,
the item had been removed from the budget.
Ms. Sanders addressed a fund capitalizations item of
$198,000 pertaining to the Crime Victim Compensation Fund.
She elaborated that restorative justice funds were
available to be deposited into the Crime Victim
Compensation Fund and used by the Crime Victim Compensation
Board. The increase brought the total from $991,000 to
$1,189,000. The technical correction was to ensure the
state was following the statute.
2:43:21 PM
Ms. Sanders moved to the capital budget shown on slide 4 of
the presentation and on Attachment B (copy on file). The
first item was $1 million for DOA to begin the replacement
of aging infrastructure within the Office of Information
Technology. She relayed that the funding would not cover
the entire need, but it would provide an annual amount to
continue moving forward. She moved to several DCCED items.
There was $15 million in federal receipt authority for
broadband digital equity capacity grant program to be
distributed out by the Broadband Office. There were two
Division of Insurance projects. The first was $2.5 million
to develop a comprehensive healthcare reimbursement reform
th
package due to the repeal of the 80 percentile. The second
was a $5 million request that would work in coordination
with DOH on healthcare innovation programs. The two
projects worked together, and it was dependent on where the
statutory authority resided with the goal of reducing
healthcare costs in Alaska. The projects were both related
to healthcare reform and improvement.
2:45:43 PM
Ms. Sanders moved to two items within DEC. The first item
was $300,000 for a food safety and sanitation program
information management system replacement. The current
system was set to expire and would no longer be supported.
The new replacement system was used on a national level.
The second item was just under $3 million in federal
funding for grants for small water systems provided by the
bipartisan infrastructure law. The federal program provided
grants to support various activities such as emergency
generators, addressing emergent contaminants, and
completing federally required lead service line inventory.
Ms. Sanders highlighted an amendment under DFG to pull back
a $7.5 million request for a vessel replacement. She
explained that after the budget was released, Trident
Seafoods had communicated with DFG that it would donate a
vessel to the state to use for the replacement vessel.
There was a corresponding capital supplemental item
associated with refurbishing the Trident vessel in lieu of
purchasing a new vessel.
Ms. Sanders addressed a $385,000 federal award for the
Department of Law (DOL) to modernize its technology. There
were two congressionally directed spending appropriations
the Department of Military and Veterans Affairs (DMVA) was
receiving on behalf of communities. The first appropriation
was $655,000 for the Seward Bear Creek service area flood
mitigation project. The second appropriation was $5.1
million for rockslide mitigation efforts in the Skagway
port.
2:48:19 PM
Representative Hannan asked if it was an unusual thing for
congressional spending to communities to go to DMVA. She
asked if there was a tie to the military that she was
unaware of.
Ms. Sanders replied that DMVA worked with several federal
programs such as the Division of Homeland Security and
Emergency Management, which were likely the programs
providing the grant funding.
Ms. Sanders addressed the DOT capital budget items. The
bulk of the funding related to the Airport Improvement
Program (AIP) and Surface Transportation Improvement
Program (STIP). She stated that the governor's budget
released on December 15 included anticipated costs. Once
the STIP process was worked through and all of the
allocations were known (shown Attachment B) the allocation
information was revised in the budget and provided to the
legislature.
Co-Chair Edgmon asked if Ms. Sanders was saying that the
list could change once the state's revised STIP submission
was accepted.
Ms. Sanders clarified that the list [shown in Attachment B]
reflected the finalized STIP submittal. She explained that
if there were any changes as the result of the approval
process it would be necessary to make modifications.
Co-Chair Edgmon referenced a letter his office had received
from the department earlier that day specifying that some
of the STIP projects were rejected or needed to be omitted
from the list. He asked for clarification on the matter.
Mr. Pannone responded that if the items were appropriated
as is and there were changes, DOT was able to move from any
named allocation to its contingency allocation. The
contingency allocation provided the department flexibility
in the normal course of the year because changes do happen.
Aside from that, the response from the Federal Highway
Administration (FHWA) could alter the projects, although it
could be resolved in FY 25. He explained that by next July
the department hoped to resolve the tier two and tier three
points in the FHWA letter. He noted that it may change, but
it was also possible that it would be resolved. He
confirmed that the items [shown in the attachment]
reflected the STIP for FY 25.
2:52:02 PM
Co-Chair Edgmon remarked that the answer was unclear. He
thought that rejected projects were removed from the list.
He asked if it was that simple.
Ms. Sanders answered it was a conversation with the federal
agency. The state would continue to work with FHWA to see
if its questions could be resolved in order to make the
projects eligible.
Co-Chair Edgmon stated the letter sent to legislators that
morning from DOT seemed to indicate a flat rejection of a
number of items that did not go through the local process
or were not eligible for the STIP process flowing through
DOT. He was asking about whether the federal government
would hold firm on its determination. He noted the
presenters were indicating it was a negotiation with the
federal agency and the state may be able to get funding for
some of the items. He stated that it was not measuring up.
Mr. Pannone answered that from DOT's perspective, the
letter had three tiers. The first tier outlined the steps
DOT would take to get the STIP approved. The second tier
outlined steps to amend the concerns and work with
municipal planning organizations (MPOs) to have the
rejected projects included in their transportation
improvement plans. He remarked it was fair to say there was
work to be done on that front.
2:53:55 PM
Representative Ortiz expressed confusion about the
situation. He stated there was a reduction of $78,207,000
under federal funding. He asked if it was in any way a
reflection of the letter received by legislators.
Mr. Pannone replied that it was not a reflection of the
letter.
Representative Ortiz asked why there was a reduction of $78
million.
Ms. Sanders answered that the governor's December 15 budget
estimated what the federal receipts and federal match would
be. She clarified it was prior to the submittal of the
final STIP in January. She explained that the document in
front of the committee reflected the STIP as submitted in
January. She clarified that any changes that may occur
after the STIP had been submitted would come to the
legislature in the form of amendments or in the following
legislative session.
Representative Ortiz asked for verification that the $78
million reflected an overestimation of how much money the
state would request in the STIP.
Mr. Pannone answered that the department overestimated the
amount of authority DOT needed in federal revenues for FY
25. He elaborated that the FHWA did not issue an
apportionment or formula funds memo typically until
December. He detailed that some of the funds were carried
forward from the previous year for which DOT already had
matching funds and legislative authority. The department
received final numbers in December and had adjusted down.
He confirmed that the numbers were larger than DOT needed
but had reflected the best information available at the
time.
2:56:20 PM
Co-Chair Edgmon summed the situation up as "stay tuned." He
looked at the letter received and remarked that it was
clear cut on one hand and not so clear on the other hand.
Representative Josephson looked at line 14 of the capital
items related to road and bridge completion. He asked if
the increment pertained to the disputed bridges (Johnson
Bridge and two others) relating to the Manh Choh [mining]
project.
Ms. Sanders replied in the negative. She explained it was
funding for the state to address roads with emergency
issues or that did not have federal funding to address an
issue.
Mr. Pannone added that the funding would go towards
projects, typically smaller in size where state funds would
expedite a small repair that was critical to a community,
where there was an emergent need, or where a project
underway needed a bit more funding to complete. He
explained that it was quicker to get the results for the
community and state using state funds.
2:58:04 PM
Ms. Sanders addressed operating supplemental items on slide
5 of the presentation. She began with $78,500 for DEC to
move quickly on its air quality lab relocation. She
explained that there was an increment in the FY 25 budget
as well and OMB was requesting a multiyear appropriation
beginning in FY 24. The supplemental contained a technical
correction associated with a prior request for a salary
study implementation for DPS that had an error in the
calculation overstating the funding need by $100,000.
Lastly, under special appropriations, OMB received two
additional judgements and settlements for DOL totaling
$544,700. She explained that OMB received judgements and
settlements throughout the year and would continue to bring
them forward to the legislature as they were finalized for
inclusion in the appropriation bills.
2:59:31 PM
Ms. Sanders turned to capital supplemental requests on
slide 6. There was a $3 million request to retrofit the
Trident Seafoods vessel that was donated to DFG. There were
three new projects under DNR. The first was a carbon
capture utilization and storage database funded with a
federal grant. The second item was $2.2 million in federal
receipt authority for resilient food system infrastructure
grants. The third item was $1.2 million for fire protection
fleet maintenance and replacement. Lastly, there was a
project for Dalton Highway to respond to necessary
maintenance in the amount of $8 million in general funds.
She elaborated that the road was quickly deteriorating and
causing vehicle damage.
Co-Chair Johnson asked the agencies to provide any updates
on the STIP going forward. She thanked the presenters and
reviewed the schedule for the following Monday.
ADJOURNMENT
3:02:07 PM
The meeting was adjourned at 3:02 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| OMB HFIN FY2025 Gov Amend Budget Overview 02.15.24 (1).pdf |
HFIN 2/15/2024 1:30:00 PM |
HB 268 HB 269 HB 299 |
| Attachment A - FY2025 Governor Amend Operating Summary Spreadsheet - 2.14.2024.pdf |
HFIN 2/15/2024 1:30:00 PM |
HB 268 HB 269 HB 299 |
| Attachment B - FY2025 Capital Governor Amend Bill Summary Spreadsheet 2.14.2024.pdf |
HFIN 2/15/2024 1:30:00 PM |
HB 268 HB 269 HB 299 |
| Attachment C - FY2024 Supplemental Operating Summary Spreadsheet - 2.14.2024.pdf |
HFIN 2/15/2024 1:30:00 PM |
HB 268 HB 269 HB 299 |
| Attachment D - FY2024 Capital Supplemental Governor Amend Bill Summary Spreadsheet 2.14.2024.pdf |
HFIN 2/15/2024 1:30:00 PM |
HB 268 HB 269 HB 299 |
| HFIN OMB Response to Q Supplemental Overview on 021524 022824.pdf |
HFIN 2/15/2024 1:30:00 PM |
HB 299 |