Legislature(2011 - 2012)SENATE FINANCE 532
02/03/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 76 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
February 3, 2011
9:02 a.m.
9:02:30 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget,
Office of the Governor
PRESENT VIA TELECONFERENCE
None
SUMMARY
SB 76 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS
SENATE BILL NO. 76
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; amending
appropriations; repealing appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
SB 76 was HEARD and HELD in committee for further
consideration.
9:03:51 AM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, presented a spreadsheet outlining
the FY2011 Supplemental Budget Requests (copy on file). She
stated that the spreadsheet was organized by order of each
section of SB 76, and included the page and line of each
item.
Ms. Rehfeld stated that the total supplemental budget bill
was $160.5 million; which included $105 million in federal
funds, $19 million in other funds, and $43 million in
unrestricted general funds. She highlighted key pieces of
the federal fund budget: Medicaid ($46.8 million), Alaska
Temporary Assistance Program ($4.5 million), University of
Alaska ($4.5 million for Pell grants), and the Department
of Transportation and Public Facilities ($18.3 million in
federal aviation projects, and $32.9 million in federal
surface transportation projects).
Ms. Rehfeld stated that in the other funds category, the
Alaska Permanent Fund Investment Management Fees had $18.5
million of the $19 million request. She stated that the
investment management fees were based on the current value
of the permanent fund. She furthered that within the FY12
budget was a language section that would address the amount
necessary for the investment management fees.
9:07:20 AM
Ms. Rehfeld summarized the formula program portion of the
bill. She stated that Medicaid required the most money,
with a request of $46.7 million; the temporary assistance
programs requested $4.5 million; home and community based
services requested $3.5 million; and senior benefits
requested $1.3 million in additional funds for FY11. She
stated that the base budget of FY12 included the original
estimate of approximately $20 million for senior benefits.
She remarked that there was current legislation to
reauthorize the senior benefit program. She also stated
that there were some smaller programs in the formula
program section, which included general relief and
children's services stimulus funds.
Ms. Rehfeld discussed Medicaid. She stated that the FY 11
budget contained contingency language to accommodate a
potentially higher reimbursement rate. She stated that
congress had enacted a new piece of legislation that would
change the reimbursement rates for the last half of the
fiscal year. She remarked that section 10 of the
supplemental bill included amendments to the contingency
language, in order to reflect the new federal provisions.
She stated that once the contingency language was
authorized, she expected the change to result in $15
million in general funds.
Ms. Rehfeld pointed out that there was $9.9 million in
general funds requested for fire suppression activities.
Ms. Rehfeld highlighted some key pieces of the non-formula
portion of the budget. She pointed out lines 4 through 6 of
the spreadsheet. She stated that there was a request in the
Office of Public Advocacy for $900,000; and a Public
Defender Agency request for $300,000. She explained that
both of the programs were case-load driven. She furthered
that there had been an increase in cases and a rise in
contracted costs for services. She stated that needs were
gauged based on the previous years' supplemental budget
requests; and remarked that the Department of
Administration was determining negotiations for contracted
attorney fees.
9:10:53 AM
Ms. Rehfeld discussed Commerce, Community, and Economic
Development (DCCED) requests. She stated that there was a
request for a one-time adjustment for the Alaska Seafood
Marketing Institute (ASMI), which would address a cash-flow
issue due to an accounting change. She mentioned that
auditors had suggested that the ASMI funds be in a
segregated fund to meet government accounting standards.
She remarked that if $6.4 million of state general funds
was put into a designated fund for ASMI, it would allow the
entire amount of their industry receipts be put into that
account. She remarked that this adjustment would simplify
ASMI's budget planning, and announced that this request was
also included in the FY 12 capital budget.
Ms. Rehfeld addressed the requests for the Department of
Corrections (DOC). She stated that there were requests of
approximately $8.5 million relating to DOC. She highlighted
the institutions requests of approximately $3.5 million, and
inmate health care requests of $4 million. She stated that
several factors contributed to the costs, and remarked that
OMB had struggled to determine priorities in budget
development. She remarked that there had been an FY 10
supplemental request for corrections institutions and inmate
health care, and the FY 11 budget had been adjusted to
accommodate the request. She pointed out that DOC was
determining the most cost effective health care for inmates.
She stressed that amendments related to institutions and
inmate health care would be proposed for the FY 12 budget.
Co-Chair Hoffman wondered if the change in alcohol laws in
Kotzebue and Bethel had a significant impact on inmate
populations. Ms. Rehfeld agreed to provide that information.
9:16:03 AM
Senator Ellis remarked that other states had gone through
innovative health care reforms, namely Texas. He wondered if
OMB had instructed DOC to look at other states' attempts at
managing the costs of inmate health care and rising
institution populations. Ms. Rehfeld responded that DOC had
looked very closely at what other states were attempting to
address regarding inmate health care and rising inmate
populations.
Senator Ellis stated that rising costs were a greater burden
on poorer and more conservative states.
Senator Thomas wondered if the prison population increase
was commensurate with the population increase of the state.
Ms. Rehfeld replied that DOC could provide more information.
9:20:02 AM
Ms. Rehfeld addressed the Department of Health and Social
Services (DHSS) supplemental budget requests. She pointed
out lines 21 and 22 of the spreadsheet, regarding the
McLaughlin Youth Center. She stressed that these requests
were unusual for juvenile justice centers. The request of
$500,000 for personnel services and staffing was because of
the steady turnover rate from years prior had halted. She
furthered that $450,000 was for unanticipated medical costs.
She felt that the request to cover medical costs was a one-
time occurrence, so there would not be a need for additional
funds in the FY 12 budget.
Ms. Rehfeld stated that there were federal funds that were
budgeted for public health nursing positions, but the
federal funds were uncollectible. The division was able to
stay within budget during recent years due to difficulty
recruiting nurses, which resulted in a high vacancy rate. If
the request was not approved, the division would need to
maintain a 17 percent vacancy rate, which would require
layoffs, closing of health centers, and reduced nurse visits
to villages.
Ms. Rehfeld discussed General Relief/Temporary Assisted
Living, and stated that the supplemental request was for
$825,000. She stressed that there was an increase in cost
per recipient, and in some cases longer lengths of stay. She
stated that this issue was a potential budget amendment. She
addressed Senior and Disabilities Services, and stated that
the request was for $1.4 million. She announced that DHSS
was addressing a backlog of applicants for the Corrective
Action Plan.
9:23:54 AM
Ms. Rehfeld discussed the Department of Law (DOL) requests,
and specifically mentioned $3.9 million for legal and timing
issues regarding oil, gas, and mining legal issues. She
stressed that it was difficult to predict when cases would
be moved, and when outside experts or consultants would be
needed for litigation. She stated that continued funding was
included in the FY 12 $5 million capital request.
In a response to a question by Co-Chair Hoffman, Ms. Rehfeld
stated that it was difficult to predict exactly when and how
the $5 million would be spent. She furthered that DOL could
provide detailed projections for the budget.
Co-Chair Hoffman stated that he and Co-Chair Stedman would
be reviewing those findings from DOL, so they could
determine the operating budget. He pointed out that while
the money gives DOL more flexibility, it restricts the
legislature's oversight. Ms. Rehfeld understood his
concerns.
9:26:43 AM
Ms. Rehfeld discussed the $431,000 request from the
Department of Transportation and Public Facilities (DOT/PF).
This request was for a Fairbanks area ice storm to cover
additional operating and overtime costs, and was considered
a one-time cost.
9:27:14 AM
Ms. Rehfeld addressed the structure of HB 76, and
highlighted each section. She stated that section 1
contained the operating, supplemental requests in formula
and non-formula programs.
Ms. Rehfeld stated that section 3 contained the capital
budget supplemental requests, and stated that many of the
requests were straight forward. She announced that there was
a $1.6 million request for DOT/PF repairs.
Ms. Rehfeld stated that there was a $1.356 million request
for the Alaska Public Safety Information Network. She
remarked that DOT/PF hoped to secure federal funds, and
furthered that DOT/PF hoped to complete the project by the
end of September 2011.
Ms. Rehfeld summarized that the requests in section 6 were
corrections to the calculations of the personal service
adjustments for bargaining units. She stated that,
initially, OMB overstated the health insurance costs under
supervisory units, and OMB understated the general
government unit. She announced that the net-effect of the
corrections was an overall decrease of approximately $2.5
million.
9:30:25 AM
Ms. Rehfeld stated that sections 9 though 24 were language
sections of the bill. She pointed out that the Medicaid
back-stop language in the amendments was because the federal
government extension into FY 11. She also stated that there
were some requests for settlements and claims.
9:31:21 AM
Ms. Rehfeld pointed out three items that would reflect
reductions in available balances for specific capital
projects: Department of Environmental Conservation (DEC) for
the oil and gas risk assessment; DOT/PF for the purchase of
land for a driving range; and the Department of Public
Safety for construction of the crime lab.
9:33:15 AM
Ms. Rehfeld pointed out two ratifications: fire suppression
of $23 million and public safety related to a reimbursable
services agreement of $18,000.
Co-Chair Hoffman remarked that he appreciated the
ratifications.
9:34:08 AM
Ms. Rehfeld discussed section 20, which stated that any
excess balance at the end of FY 11 be put into the statutory
budget reserve fund.
9:34:43 AM
Co-Chair Hoffman requested further explanation of DOL
requests, specifically related to Joe Miller and Lisa
Murkowski's 2010 United States Senate election costs. Ms.
Rehfeld replied that DOL's requested unanticipated legal
action costs totaled $705,000. She specified that the
election matters were $268,000; and public records requests
were $122,300.
Co-Chair Hoffman specifically pointed out that the law would
require Joe Miller to pay the state 20 percent of the court
fees, and wondered how much of that 20 percent the state had
collected. Ms. Rehfeld agreed to provide that information.
9:37:26 AM
Senator Ellis queried the administration's request for
increased management fees. Ms. Rehfeld replied that DOC and
DOR could give more detailed justification of budget
requests.
Senator Ellis requested an official discussion regarding
administration funds. Co-Chair Hoffman agreed.
SB 76 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 9:41 AM.
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