Legislature(1995 - 1996)
04/12/1995 08:35 PM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 12, 1995
8:35 p.m.
TAPES
SFC-95, #29, Side 2 (532-end)
SFC-95, #31, Side 1 (000-052)
CALL TO ORDER
Senator Steve Frank, Co-chairman, convened the meeting at
approximately 8:35 p.m.
PRESENT
All committee members (Co-chairmen Frank and Halford and
Senators Donley, Phillips, Rieger, Sharp, and Zharoff) were
present.
ALSO ATTENDING: Frank Rue, Commissioner, Dept. of Fish and
Game; Annalee McConnell, Director, Office of Management and
Budget; Nancy Slagle, Director of Budget Review, Office of
Management and Budget; Former Senator Pat Pourchot,
Legislative Liaison, Office of the Governor; Mike Greany,
Director, Legislative Finance Division; fiscal analysts,
Legislative Finance Division; budget analysts, Office of
Management and Budget; numerous department representatives;
and aides to committee members and other members of the
legislature.
SUMMARY INFORMATION
HB 100 - APPROP: FY 96 OPERATING & LOAN BUDGET
Subcommittee presentations were made for the
following department budgets:
Office of the Governor
Dept. of Health and Social Services
Court System
Dept. of Transportation and Public Facilities
Dept. of Fish and Game
OFFICE OF THE GOVERNOR
Co-chairman Frank directed attention to a handout (copy
appended to these minutes as Attachment A).
[More detailed subcommittee information on all budgets is on
file in the original Senate Finance bill file for HB 100,
available through the Legislative Finance Division.]
The Co-chairman explained that the subcommittee philosophy
was to return funding to FY 94 actual and spread the dollars
in a manner as accommodating as possible. In light of FY 94
actual funding, the administration expressed concern that
movement of the office of equal opportunity employment into
the Governor's Office would not be taken into consideration.
The subcommittee understood that but did not acknowledge it
in setting a budgetary cap, feeling that funding for the
office could be absorbed within the cap.
Senator Donley voiced concern that the Governor's Office was
sustaining a double cut under the subcommittee proposal, and
he voiced a preference for funding proposed by the House.
Co-chairman Halford MOVED for adoption of the subcommittee
budget for the Office of the Governor for incorporation
within HB 100. Co-chairman Frank called for a show of
hands. The subcommittee recommendation was ADOPTED on a
vote of 5 to 2.
DEPT. OF HEALTH AND SOCIAL SERVICES
Co-chairman Halford directed attention to a handout
(Attachment B) and noted that the budget for the Dept. of
Health and Social Services was particularly driven by
Medicaid increases. The cap represented a reduction of $32
million from the Governor's proposal. The subcommittee
budget "only missed it by $17,446.2" in effecting a net
reduction of $15,515.0. The end result is that "We didn't
go any further down the Medicaid list," but funding
maintains existing levels of service. The subcommittee
budget provides flexibility to do the job within available
dollars. While the Governor's Office would have liked to
pick up Medicaid options that were dropped in the past, the
subcommittee merely avoided going further down the list.
Senator Zharoff inquired regarding reduction of Medicare
services, particularly for the elderly. Co-chairman Halford
explained that Medicare operates on a list of one to thirty-
one items. Positioning on the list is number ten. Items
lower than that in priority have not been included in the
proposed budget nor were they included in the budget for
last year. The Governor proposed an increment to restore
some of the services. That increment was not adopted.
Existing services will continue under the proposed budget,
but previously eliminated services will not be restored.
Co-chairman Halford added that the subcommittee proposal
"represents a substantial increase over last year's budget,
although still maintaining a substantial decrease under what
the Governor proposed." The Senate budget is approximately
$2 million under the House number.
Senator Sharp voiced his understanding that the subcommittee
proposal is not a reduction but an increase of $17 million
over last year and a $30 million increase over two years
ago. The budget for the Dept. of Health and Social Services
has grown more than any other, to meet massive needs. Co-
chairman Halford added that the problem is that the Medicaid
growth rate is approximately 20%. The subcommittee budget
proposes to hold it at less than 11%. The commissioner has
also voiced her intention that "this be a nonsupplemental
budget."
Senator Zharoff asked if all available federal dollars have
been captured. Co-chairman Halford acknowledged that under
the existing Medicaid program, the answer was "probably
not." He said that states can add to Medicaid and AFDC and
receive a one-to-one match. Given the fact that
Congressional cuts are likely to be made, the state probably
could not add.
Co-chairman Halford MOVED for adoption of the subcommittee
budget for the Dept. of Health and Social Services for
incorporation within HB 100. OBJECTION was raised by
Senator Zharoff. Co-chairman Frank called for a show of
hands. The motion CARRIED on a vote of 5 to 2, and the
subcommittee budget was ADOPTED.
ALASKA COURT SYSTEM
Co-chairman Halford distributed a handout (Attachment C) and
advised that the Court System budget met its cap. The
subcommittee attempted to minimize changes to meet the cap,
particularly for trial courts which do not control their own
case load and must respond. Maintaining funding for trial
courts and appellate courts focused cuts in judicial conduct
and the Alaska Judicial Council. While it is was not the
desire to cut those areas, they are a much more optional
function. The trial court budget is still a slight
reduction.
Senator Zharoff asked if the budget reflects the opening of
the new building in Anchorage. Co-chairman Halford
responded negatively. He acknowledged that an increase was
requested for the building, but it would not fit under the
cap. Senator Zharoff noted that when the building is ready
for occupancy, someone will move in. He then asked if the
committee would be faced with a supplemental request next
session. Co-chairman Halford said that was not his
intention.
Co-chairman Halford further noted that trial courts respond
to oil tax cases "that we pursue in order to generate
revenue for the constitutional budget reserve account."
Trial courts "came back with a recommendation, and we
adopted it after I requested an analysis of what they
thought was legitimate." In addition to the general fund,
it takes $400.0 from the constitutional budget reserve for
dealing with those cases. The legislature funds legal fees
for those cases from the CBR.
Senator Randy Phillips voiced his understanding that the
building in Anchorage would not be completed until the fall
of 1996. Co-chairman Halford advised that the Court System
requested a $2 million increase for the facility. It would
not fit under the cap.
Senator Zharoff advised that he would be offering amendments
relating to trial court funding. He further asked if use of
the $400 from the CBR would necessitate a three-quarter
vote. Co-chairman Frank responded affirmatively. Co-
chairman Halford noted that in the subcommittee breakout,
the $400.0 is shown under the new court building. However,
the Court System has control over where it moves funding in
trial courts. There remains a significant reduction in this
area.
Senator Rieger inquired concerning program receipts within
the court system. Co-chairman Halford responded that they
all go to the general fund. Senator Rieger suggested that
users of the court system might be willing to fund some
activities. Co-chairman Halford advised that the
subcommittee proposal represents a 2% reduction from last
year. He voiced his belief that the court system has
"management ability to save a little bit of money." He
acknowledged that because of mandates to deal with criminal
cases, the waiting list in civil court becomes longer and
longer. Questions arise regarding whether "We can push the
number down slightly and maintain an adequate level of
service within the size of that budget?" The subcommittee
felt that could be done. There was not much flexibility
under the cap.
Co-chairman Halford MOVED for adoption of the subcommittee
budget for the Alaska Court System for incorporation within
HB 100. OBJECTION was raised. Co-chairman Frank called for
a show of hands. The motion CARRIED on a vote of 5 to 2,
and the budget was ADOPTED.
DEPT. OF TRANSPORTATION AND PUBLIC FACILITIES
Senator Rieger explained that the budget for the Dept. of
Transportation and Public Facilities consists of two parts.
One part is the recommendation of the subcommittee. At the
time the subcommittee closed out, the chair was
reconsidering the cap. The unallocated reduction number was
thus left open. Senator Rieger said he would first explain
the subcommittee recommendation per his handout (Attachment
D) and then move to amend the budget for the unallocated
reduction.
The basic approach was to deny all general fund increments
and transfer $200.0 in general funds from statewide
engineering to statewide maintenance and operations to
reflect the changing nature of DOTPF activities from less
new construction to more maintenance. Program receipt
increments were not denied, but changes in the proposed
amendment would "take the DOT budget, inclusive of program
receipts as if they were general funds, down to the FY 94
actual level. That number is $128,025.0.
The handout (Attachment D) would be amended with two
components:
1. An unallocated reduction of $1,384.9 to be spread
at the discretion of the commissioner among all
components of the department, except the marine
highway system.
2. An unallocated reduction of $390.6 to the marine
highway stabilization fund.
Those percentage reductions are intended to be "exactly
prorata to the amount of the cut and the size of their
respective budgets."
Senator Rieger next directed attention to two items of
intent:
1. Requiring the allocation to statewide maintenance
and operations, highways, and aviation to lapse into
the general fund on August 31. 1996.
2. Asking that the department continue winter
maintenance for the Klondike Road (Skagway-
Whitehorse) and encouraging the Canadian
government to increase support.
Senator Rieger further attested to provisions in the front
section of the budget relating to the Sitka Airport. He
explained that the department is in negotiations to realize
program receipts for continued operation since the City and
Borough of Sitka has announced that it will terminate its
lease. The provision will appropriate program receipts back
to the department for necessary operations.
Senator Zharoff inquired concerning the impact of the
unallocated reductions and advised that he would be
preparing amendments in an attempt to reinstate them.
Senator Rieger MOVED for adoption of the subcommittee budget
and intent for the Dept. of Transportation and Public
Facilities. No objection having been raised, the
subcommittee budget and intent were ADOPTED. Senator Rieger
then MOVED for adoption of the amendment (See Amendment No.
15 within Attachment D) relating to the unallocated
reductions. No objection having been raised, the AMENDMENT
was ADOPTED. Senator Rieger MOVED for incorporation of the
subcommittee budget, as amended, into HB 100. Senator
Zharoff OBJECTED. Co-chairman Frank called for a show of
hands. The motion CARRIED on a vote of 5 to 2, and the
budget for the Dept. of Transportation and Public Facilities
was incorporated within HB 100.
DEPT. OF FISH AND GAME
Senator Sharp directed attention to a handout (Attachment E)
and explained that the subcommittee recommendation meets the
cap which required a $5,321.4 reduction in general funds.
Changes include:
Commercial Fisheries
Fisheries Projects - Commercial Fisheries was broken
into two separate appropriations and allocations.
Fisheries projects were approved at the full
general fund request of $14,784.2.
Regional and S.W. Admin.- The five regional commercial
fisheries management programs were added together
for proposed funding of $12,233.0. That funding
was reduced by $1,789.5 for an adjusted total of
$10,444.0 for this separate appropriation.
Sport Fisheries - was increased by $200.0 for the Crystal
Lake Hatchery per a recommendation from the
administration. The administration
recommended removal of the $200.0 from
habitat.
Wildlife Conservation - The $667.9 in general funds was
deleted as proposed by the administration.
Commissioner's Office - A miscellaneous unallocated
reduction of $137.7 was taken. The House budget
allocates the reduction to specific
positions. That caused a problem for
the department since one of the
positions was critical to international
treaty work. The Senate approach
provides flexibility.
Administrative Services - Reduced general funds $330.5 and
replaced some of the reduction with interagency
receipts.
Board of Fish and Game - was held at the status quo, FY 95
level.
Advisory Regional Boards - was held harmless at the FY 95
level.
Subsistence - All general funds for subsistence were
deleted. Approximately $900.0 in other funds
remain.
Habitat - was reduced by $711.2, and $200.0 was transferred
to sport fisheries.
Habitat Permitting - was held harmless at $1,511.3, the same
level as FY 95.
The total subcommittee recommendation for general fund
expenditures is $30,366.9, a reduction of $5,321.4.
Senator Sharp next advised that general fund program
receipts for Commercial Fisheries, Sport Fisheries, Wildlife
Conservation, Office of the Commissioner, Division of
Administration, Subsistence, Habitat, and the Commercial
Fisheries Entry Commission were held harmless from
reductions and funded, per the administration's
recommendation, at a total of $6,861.4. That is an increase
of $1,032.2 over FY 95.
Senator Sharp referenced the final page of his spreadsheet
and explained that it presents a breakdown of the component
for Wildlife Conservation, showing various project
allocations. He further advised that he would be submitting
an amendment to increase bison management from the Senate
number of $163.8 to the $332.3 proposed by the
administration.
Total FY 95 funding for the Dept. of Fish and Game, from all
sources, was $91,800.0. The proposed subcommittee budget
for FY 96 totals $87,700.0; a net reduction of $4,100.0,
approximately 4.5%.
Senator Sharp reiterated that the FY 96 budget contains a
different appropriation structure than the budget for FY 95.
He referenced two components in Commercial Fisheries and
four separate appropriations for Wildlife Conservation.
Several areas have been combined into one under
Administrative Support. Last year's budget contained an
appropriation for Office of the Commissioner, Public
Communication and Administrative Services. The subcommittee
budget adds Boards of Fisheries and Game and Regional
Council Advisory Commissions. Combination of these three is
to provide greater flexibility in use of available funds.
Habitat has been split into two appropriations to hold
harmless Habitat Permitting. That was done deliberately to
prevent retaliation for budget cuts.
Co-chairman Halford noted a reduction of $3 million in other
funds and asked what they consist of. Senator Sharp
explained that they are fish and game funds. The total
amount was not spent and remains in the fish and game fund
for further appropriation this year or next year.
Senator Sharp next MOVED for adoption of a proposed
amendment (See Amendment No. 6 within Attachment E) which he
explained would increase the Wildlife Conservation BRU for
species management by $163.8 in fish and game funds to
support a wood bison management and transplant program from
Canada into Alaska. That would raise funding to the $332.3
requested by the administration.
FRANK RUE, Commissioner, Dept. of Fish and Game, came before
committee in response to a question from Senator Donley.
The Commissioner explained that the program would transplant
wood bison from Canada into Alaska where they were
traditionally found. The department believes Alaska can
support 4,000 to 5,000 bison in the Yukon Flats area. The
bison were traditional in that area 400 to 500 years ago.
Co-chairman Frank called for objections to the amendment.
No objection having been raised, Amendment No. 6 was
ADOPTED.
Senator Zharoff noted that while the subcommittee budget
presents an appearance of a 4% reduction, when one reviews
general funds the reduction is approximately 13% in those
areas. He voiced particular concern regarding Subsistence,
Habitat, and Commercial Fisheries. Senator Sharp advised
that while Commercial Fisheries contains 75% of the general
funds in the department budget, the subcommittee effected
only a 1.7% reduction for the BRU.
End: SFC-95, #29, Side 2
Begin: SFC-95, #31, Side 1
Senator Sharp MOVED for adoption of the subcommittee report
for the Dept. of Fish and Game for incorporation within HB
100. OBJECTION was voiced. Co-chairman Frank called for a
show of hands. The motion CARRIED on a vote of 5 to 2, and
the subcommittee budget was incorporated within HB 100.
OPEN AREAS
Co-chairman Frank noted that remaining budget areas open for
committee discussion and action include: Amendments, Dept.
of Labor, Formula Programs (Senior Citizens and Veterans'
Tax Relief), Municipal Assistance, Revenue Sharing, ASMI,
ATMC, AFDC, APA, and the Front Section.
SPENDING PLAN
Senator Zharoff inquired regarding availability of a
spending plan detailing how the committee proposes to meet
the FY 96 budget. Co-chairman Frank advised that it had not
yet been discussed. He acknowledged "some open questions"
regrading the source of some funding.
ADJOURNMENT
The meeting was adjourned at approximately 9:45 p.m.
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