Legislature(2025 - 2026)ADAMS 519

04/03/2025 09:00 AM House FINANCE

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Audio Topic
09:06:34 AM Start
09:07:12 AM HB53 || HB55
09:26:09 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+= HB 54 APPROP: CAPITAL/SUPPLEMENTAL/FUNDS TELECONFERENCED
Scheduled but Not Heard
+ Overview: Capital Update by Judiciary TELECONFERENCED
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 53 APPROP: OPERATING BUDGET; CAP; SUPP TELECONFERENCED
Heard & Held
+= HB 55 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 3, 2025                                                                                            
                         9:06 a.m.                                                                                              
                                                                                                                                
9:06:34 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Josephson called the House Finance Committee                                                                           
meeting to order at 9:06 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Andy Josephson, Co-Chair                                                                                         
Representative Calvin Schrage, Co-Chair                                                                                         
Representative Jamie Allard                                                                                                     
Representative Jeremy Bynum                                                                                                     
Representative Alyse Galvin                                                                                                     
Representative Sara Hannan                                                                                                      
Representative Nellie Unangiq Jimmie                                                                                            
Representative DeLena Johnson                                                                                                   
Representative Will Stapp                                                                                                       
Representative Frank Tomaszewski                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 53     APPROP: OPERATING BUDGET; CAP; SUPP                                                                                   
                                                                                                                                
          HB 53 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 54     APPROP: CAPITAL/SUPPLEMENTAL/FUNDS                                                                                    
                                                                                                                                
          HB 54 was SCHEDULED but not HEARD.                                                                                    
                                                                                                                                
HB 55     APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          HB 55 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
                                                                                                                                
Co-Chair Josephson reviewed the meeting agenda. The                                                                             
committee would continue to take up operating budget                                                                            
amendments.                                                                                                                     
                                                                                                                                
HOUSE BILL NO. 53                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     making  reappropriations;  making appropriations  under                                                                    
     art.  IX,  sec. 17(c),  Constitution  of  the State  of                                                                    
     Alaska,  from the  constitutional budget  reserve fund;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
HOUSE BILL NO. 55                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:07:12 AM                                                                                                                    
                                                                                                                                
Co-Chair Schrage MOVED to ADOPT Amendment 15 (copy on                                                                           
file):                                                                                                                          
                                                                                                                                
     Agency: Administration                                                                                                     
     Appropriation: Centralized Admin. Services                                                                                 
     Allocation: Retirement and Benefits                                                                                        
                                                                                                                                
     Transaction Details                                                                                                        
     Title:  Delete  Previously   Added  Retirement  Tech  2                                                                    
     Position                                                                                                                   
     Section: Section 1                                                                                                         
     Type: Dec                                                                                                                  
                                                                                                                                
     Line Items (Amounts are in thousands)                                                                                      
     Personal Services: -93.6                                                                                                   
     Travel: 0.0                                                                                                                
     Services: 0.0                                                                                                              
     Commodities: 0.0                                                                                                           
     Capital Outlay: 0.0                                                                                                        
     Grants: 0.0                                                                                                                
     Miscellaneous: 0.0                                                                                                         
     Total: -93.6                                                                                                               
                                                                                                                                
     Positions                                                                                                                  
     Permanent Full-Time: 0                                                                                                     
     Permanent Part-Time: 0                                                                                                     
     Temporary: 0                                                                                                               
                                                                                                                                
     Funding (Amounts are in thousands)                                                                                         
     1004 Gen Fund -3.1                                                                                                         
     1017 Group Ben -29.8                                                                                                       
     1023 FICA Acct -0.9                                                                                                        
     1029 PERS Trust -42.0                                                                                                      
     1034 Teach Ret -16.1                                                                                                       
     1042 Jud Retire -0.5                                                                                                       
     1045 Nat Guard -1.2                                                                                                        
                                                                                                                                
     Explanation                                                                                                                
     The  subcommittee, after  hearing  about the  intensive                                                                    
     workload of  the Division  of Retirement  and Benefits,                                                                    
     added a  Tech 2  Position to provide  assistance during                                                                    
     peak  processing times  and allow  for better  workload                                                                    
     distribution.  The  department  did  not  request  this                                                                    
     addition.                                                                                                                  
                                                                                                                                
Representative Stapp OBJECTED.                                                                                                  
                                                                                                                                
Co-Chair Schrage  explained that the amendment  would delete                                                                    
a  previously added  retirement  2  technician. He  detailed                                                                    
that  during the  summer,  retirement technicians  processed                                                                    
many retirement forms  as a result of  teachers retiring and                                                                    
otherwise. The  position was  added during  the subcommittee                                                                    
process  to  try  to  cut  down  on  processing  times.  The                                                                    
amendment  was   in  recognition   of  the   state's  fiscal                                                                    
situation. He  remarked that while  the position had  a very                                                                    
small  unrestricted  general  fund   (UGF)  impact,  he  was                                                                    
proposing  to remove  the  addition in  order  to match  the                                                                    
state's fiscal reality.                                                                                                         
                                                                                                                                
Representative Stapp remarked that  the fund sources for the                                                                    
position  were varied.  He asked  if  the amounts  defaulted                                                                    
back into the  original fund sources or if  they flowed into                                                                    
the general fund.                                                                                                               
                                                                                                                                
Co-Chair Schrage responded that  the funding would flow back                                                                    
into  the original  fund sources.  He detailed  that because                                                                    
the  position was  utilized to  process retirements,  it was                                                                    
funded   with  various   retirement  accounts.   There  were                                                                    
constraints on  what the funds  could be used for,  and they                                                                    
would not flow back into UGF.                                                                                                   
                                                                                                                                
9:08:57 AM                                                                                                                    
                                                                                                                                
Representative Bynum  stated his understanding  the position                                                                    
had  been  added  because  there   was  a  need  within  the                                                                    
department [Department of  Administration (DOA), Division of                                                                    
Retirement  and Benefits]  to  deal  with personnel  issues,                                                                    
specifically  retirement and  benefits. He  did not  want to                                                                    
interrupt  retirement  and  benefits services.  He  remarked                                                                    
that  the   legislature  continually  talked   about  having                                                                    
struggles   with   personnel    and   personnel   management                                                                    
throughout the  state. He believed  the item had  been added                                                                    
in  the   first  committee  substitute   [for  HB   53].  He                                                                    
understood  there  was  a massive  fiscal  pressure  on  the                                                                    
state.  He  wanted to  understand  how  the removal  of  the                                                                    
position would impact  operations. Additionally, he wondered                                                                    
why it would be removed after the committee had added it.                                                                       
                                                                                                                                
Representative  Johnson highlighted  that the  last line  of                                                                    
the amendment explanation specified  that the department did                                                                    
not  ask for  the addition;  therefore, she  was comfortable                                                                    
removing  it.   She  assumed   the  department   would  have                                                                    
requested the position if it was needed.                                                                                        
                                                                                                                                
Co-Chair  Schrage  agreed  with Representative  Johnson.  He                                                                    
confirmed  that  the  position  was  not  requested  by  the                                                                    
administration.  The department  had testified  in committee                                                                    
that  it was  able to  handle the  workload, but  processing                                                                    
times  were  sometimes up  to  three  months. The  committee                                                                    
decided  prior  to the  spring  revenue  forecast [from  the                                                                    
Department of  Revenue], considering  the very  small amount                                                                    
of  UGF  required,  there  would  be  value  in  adding  the                                                                    
position to try to cut  processing times down. He reiterated                                                                    
that the department  told the committee it  could handle the                                                                    
current  workload with  existing staff.  He felt  that given                                                                    
the   state's  worsening   fiscal  position,   he  felt   it                                                                    
appropriate   to   remove   the   addition   made   by   the                                                                    
subcommittee.                                                                                                                   
                                                                                                                                
Representative Tomaszewski asked who  added the position. He                                                                    
shared  that during  his time  in the  legislature over  the                                                                    
past  two   years  he  had   received  several   calls  from                                                                    
individuals  who  had retired  and  were  waiting for  their                                                                    
benefits. He thought  the position was perhaps  an intent to                                                                    
speed  the  process  up.  He remarked  that  once  a  person                                                                    
retired and their  paychecks stopped there was  a lag before                                                                    
the individual  began receiving benefits.  He noted  that it                                                                    
could make people justifiably frustrated.  He asked for more                                                                    
clarification on the  reason for adding the  position to the                                                                    
budget.                                                                                                                         
                                                                                                                                
Co-Chair Schrage replied that he  had also heard the concern                                                                    
from retirees  in the past.  He relayed that  the department                                                                    
had  testified to  the committee  that it  could handle  the                                                                    
current workload  and the three-month  wait was  somewhat in                                                                    
line with  waits in other  states. He acknowledged  that the                                                                    
process  was faster  in some  states and  about the  same in                                                                    
others. He stated that as  a fiscal conservative, he thought                                                                    
the  state needed  to live  within  its means  with the  new                                                                    
revenue  forecast. He  would like  to reduce  the processing                                                                    
time and  lag time for  retirees, but  he did not  think the                                                                    
state  could afford  it currently.  He thought  many of  his                                                                    
constituents  who  were  retirees  would prefer  to  wait  a                                                                    
couple of  extra weeks and  see the  $93,000 go to  the Base                                                                    
Student Allocation (BSA) instead.                                                                                               
                                                                                                                                
Representative  Tomaszewski asked  if  the subcommittee  had                                                                    
been told  employees should expect  a lag of a  couple weeks                                                                    
or  three-months.  He  asked  if  individuals  received  the                                                                    
information prior  to retirement.  He wondered if  there was                                                                    
any  discussion on  starting paperwork  sooner  in order  to                                                                    
prevent a lag. He was uncertain of the process.                                                                                 
                                                                                                                                
Co-Chair Schrage  answered that part  of the issue  was that                                                                    
individuals were retiring at the  end of the school year and                                                                    
there was a  large volume of retirements at one  time due to                                                                    
their  cyclical nature.  Some  individuals  were caught  off                                                                    
guard but most  people planning for retirement  had heard of                                                                    
the wait  times from other  retiring colleagues. He  had not                                                                    
done  a  survey of  all  prospective  retirees to  determine                                                                    
their awareness.                                                                                                                
                                                                                                                                
9:14:24 AM                                                                                                                    
                                                                                                                                
Representative  Allard  shared  that  she had  been  in  the                                                                    
committee  meeting, and  it was  clear  that the  department                                                                    
needed  another  person.  She explained  that  it  took  the                                                                    
department six to nine weeks  to process retirements because                                                                    
the process  was still done  on paper and nothing  was saved                                                                    
on the computer;  therefore, it took a long  time. She noted                                                                    
that  the director  had told  the  committee the  department                                                                    
wanted  another  position.  She found  that  the  department                                                                    
processed retirements pretty well  and the time frame lagged                                                                    
a little bit after the  school year because teachers started                                                                    
retiring at  that time.  She stated  that the  current topic                                                                    
was unrelated  to being a fiscal  conservative. She believed                                                                    
deleting  the position  would  cost more  in  the long  term                                                                    
because retirees  were not being processed  accordingly. She                                                                    
did not think it was  fair and she supported maintaining the                                                                    
position because  teachers' retirements should  be processed                                                                    
in  a  timely fashion.  She  added  that existing  employees                                                                    
would  be  working  overtime  to  process  retirements,  but                                                                    
adding another position would help prevent overtime.                                                                            
                                                                                                                                
Representative  Hannan  would  support  the  amendment.  She                                                                    
reminded  committee  members  that   if  the  position  were                                                                    
funded,  the  department  could  not  start  processing  and                                                                    
hiring until  July 1.  She stated the  problem was  that the                                                                    
bulk of  teachers gave retirement  notice in spring  and the                                                                    
Division of  Retirement and Benefits started  processing the                                                                    
retirements  on July  1. She  stated  that teacher  retirees                                                                    
were  advised  - long  before  they  filed their  retirement                                                                    
paperwork to go  to an advisee   that their  first check was                                                                    
in  September. She  stated that  in  2024, many  legislators                                                                    
heard from  constituents that checks  were not  coming until                                                                    
November.  She  believed  most legislators  had  heard  from                                                                    
constituents that  they were  prepared for a  lag but  not a                                                                    
lag of five  months without a retirement  check. She thought                                                                    
the department should have heard  legislators loud and clear                                                                    
from  inquiries, and  during  the  subcommittee process  the                                                                    
department said it had stepped  up. She pointed out that the                                                                    
funding  would not  resolve the  situation for  the upcoming                                                                    
retirement cycle  because the department  would not  be able                                                                    
to start  advertising for a  new position until July  1. She                                                                    
stated that  if the department  had not anticipated  a surge                                                                    
in retirement  in the  coming summer  and there  was another                                                                    
major fumble,  there would be another  discussion during the                                                                    
subcommittee  process the  following  year.  She added  that                                                                    
retirees were  due their  money and  the department  said it                                                                    
would be able to handle it better.                                                                                              
                                                                                                                                
9:18:52 AM                                                                                                                    
                                                                                                                                
Representative  Bynum  stated  he  did not  want  to  impugn                                                                    
anyone,  but  he  did  not know  how  many  legislators  had                                                                    
employed people and dealt  with transitioning employees into                                                                    
retirement and  not allowed  them to get  a check  for three                                                                    
months.  He underscored  it was  a very  stressful situation                                                                    
for someone  making a  life change.  He understood  the need                                                                    
for  fiscal restraint  but stressed  that they  were talking                                                                    
about $3,100  in UGF,  while most of  the position  was paid                                                                    
via  other  mechanisms.  He remarked  that  the  legislature                                                                    
talked  about wanting  to  make sure  it  was funding  other                                                                    
things like  the BSA, which  was all  coming out of  UGF. He                                                                    
highlighted that  DOA came to  the committee with  a funding                                                                    
request  for  AI tools  to  create  efficiencies and  create                                                                    
better  communications, but  the  committee  had denied  the                                                                    
request. He stated that people  were needed to help progress                                                                    
retirement processing  for $3,000 UGF and  now the committee                                                                    
was saying there needed to  be fiscal constrained and it was                                                                    
okay for retirees to wait. He  was torn on whether he wanted                                                                    
to support the amendment.                                                                                                       
                                                                                                                                
Representative  Johnson remarked  that she  had started  out                                                                    
saying   she   would   support  the   amendment,   but   the                                                                    
conversation had convinced her  otherwise. She did not think                                                                    
about  it  being attached  to  the  BSA  when she  had  been                                                                    
talking about  it earlier; however,  if the  legislature was                                                                    
going to start  "robbing Peter to pay Paul"  to increase the                                                                    
BSA,  she thought  it was  dangerous.  She had  heard a  lot                                                                    
about people  wanting to make  sure they were  getting their                                                                    
money  because without  SBS, teachers  were struggling  when                                                                    
they  entered the  gray area.  She reasoned  the UGF  amount                                                                    
[used to fund the position] was  so little, it made no sense                                                                    
to her not to fund it.                                                                                                          
                                                                                                                                
Representative  Galvin would  support the  amendment because                                                                    
the department  had not requested  the position.  She stated                                                                    
that generally  when a department  did not ask for  help, it                                                                    
would not  run to hire someone  in time to get  the ultimate                                                                    
goal  met.  She  stated  the department  had  worked  it  in                                                                    
another direction and she was grateful for that.                                                                                
                                                                                                                                
Co-Chair   Schrage  appreciated   the   discussion  on   the                                                                    
amendment. He  relayed that the  amendment was an  effort to                                                                    
restrain  some  of the  action  taken  by subcommittees  and                                                                    
tried to be  consistent in how the budget  was approached in                                                                    
the  full  finance  committee.  He  recognized  the  portion                                                                    
coming from the  general fund was limited, but  he stated it                                                                    
also  impacted  the   Public  Employees'  Retirement  System                                                                    
(PERS) trust and  some of the other  retirement accounts. He                                                                    
believed the  amendment ensured the  state was  not spending                                                                    
more than  it needed  to regardless of  the fund  source. He                                                                    
had concern for  retirees as they made  the transition [from                                                                    
work  to  retirement],  but  the  department  had  told  the                                                                    
committee that wait  times were in line with what  was to be                                                                    
expected   for   retirement  accounts.   Additionally,   the                                                                    
department  did not  request the  position.  He pointed  out                                                                    
that there  was a lag time  of when the department  would be                                                                    
able to  hire a person to  fill the position. He  stated the                                                                    
amendment  was another  opportunity  to  restrain growth  in                                                                    
government  in a  year where  revenues were  constrained. He                                                                    
remarked that  some may tie it  to the BSA, some  may tie it                                                                    
to the  PFD [Permanent Fund  Dividend], and some may  tie it                                                                    
to  any of  the other  appropriations  made as  a state.  He                                                                    
noted the  state had  limited resources  and he  believed it                                                                    
was necessary  to look for  every opportunity  to prioritize                                                                    
what  was most  important. He  thought it  was a  reasonable                                                                    
approach  in the  current year  to  keep the  wait time  for                                                                    
retirement and benefits at an industry norm.                                                                                    
                                                                                                                                
9:23:43 AM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Hannan,    Jimmie,   Galvin,    Foster,   Schrage,                                                                    
Josephson                                                                                                                       
OPPOSED: Johnson, Stapp, Allard, Bynum, Tomaszewski                                                                             
                                                                                                                                
The motion  PASSED (6/5). There being  NO further OBJECTION,                                                                    
Amendment 15 was ADOPTED.                                                                                                       
                                                                                                                                
9:24:41 AM                                                                                                                    
                                                                                                                                
Co-Chair Josephson  reviewed the schedule for  the afternoon                                                                    
meeting.                                                                                                                        
                                                                                                                                
Representative Johnson asked if there  would be a meeting on                                                                    
Friday.                                                                                                                         
                                                                                                                                
Co-Chair Josephson  answered there was no  meeting scheduled                                                                    
for  the   following  morning,  but  there   was  a  meeting                                                                    
scheduled in the afternoon.                                                                                                     
                                                                                                                                
HB  53  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  55  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
9:26:09 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:26 a.m.                                                                                          

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