Legislature(1993 - 1994)

04/03/1993 10:15 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                          April 3, 1993                                        
                           10:15 a.m.                                          
                                                                               
  TAPES                                                                        
                                                                               
  SFC-93, #46, Side 1 (000-end)                                                
  SFC-93, #46, Side 2 (end-255)                                                
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator Steve  Frank,  Co-chair,  convened  the  meeting  at                 
  approximately 10:15 a.m.                                                     
                                                                               
  PRESENT                                                                      
                                                                               
  In addition to  Co-chairs Frank and Pearce,  Senators Jacko,                 
  Kelly, Kerttula, Rieger, and Sharp were present.                             
                                                                               
  ALSO ATTENDING:   Senator Jim Duncan, Senator  Rick Halford,                 
  Senator Randy Phillips, Senator  Suzanne Little, Senator  Al                 
  Adams, Attorney General Charlie Cole, Commissioner Darrel J.                 
  Rexwinkel,  Department   of  Revenue;  Brian   Rogers,  Vice                 
  President for  Finance, University of  Alaska; Mike  Greany,                 
  Director, and Nancy Slagle, Jeff  Hoover, Joan Kasson, Karen                 
  Rehfeld, Fiscal Analysts,  Legislative Finance Division; and                 
  aides to committee members.                                                  
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  SB 175 -  An Act making appropriations for the operating and                 
            loan program  expenses of state government  and to                 
            capitalize funds; and  providing for an  effective                 
            date.                                                              
                                                                               
            Subcommittee  budgets  were   presented  for   the                 
            following departments:                                             
                                                                               
                 Department of Education                                       
                 Department of Revenue                                         
                 Department of Administration                                  
                 University of Alaska                                          
                 Department of Public Safety                                   
                 Department of Transportation                                  
                                                                               
            The committee returned to add letters of intent to                 
            the   subcommittee   budget   for  the   following                 
            department:                                                        
                                                                               
                 Department of Health & Social Services                        
                                                                               
                                                                               
  SENATE BILL NO. 175:                                                         
                                                                               
       An Act making appropriations for the operating and loan                 
       program expenses of state government and to  capitalize                 
       funds; and providing for an effective date.                             
                                                                               
  (Note: The beginning of the  meeting was not taped due to  a                 
  malfunction.)                                                                
                                                                               
  Department of Education                                                      
                                                                               
  SENATOR TIM  KELLY outlined  subcommittee decrements  to the                 
  corrections of the FY94 operating  budget for the Department                 
  of Education  (copy of handout on file titled "Department of                 
  Education-Senate Reductions).                                                
                                                                               
  SENATOR  JAY KERTTULA  MOVED  for ADOPTION  of  a letter  of                 
  intent  that  said funds  allocated  in the  client services                 
  component  be  used  for project  "walkback,"  and  that the                 
  Division of  Vocational Rehabilitation disburse  and monitor                 
  the funds for this purpose.   No objections being raised, it                 
  was ADOPTED.                                                                 
                                                                               
  Senator  Kelly MOVED  for ADOPTION  of letter  of intent  #1                 
  which  spoke  to the  Museum  Operations reduction  (copy on                 
  file).  No objections being raised, it was ADOPTED.                          
                                                                               
  Begin SFC-93 #46, Side 1                                                     
                                                                               
  SENATOR GEORGE  JACKO  MOVED for  ADOPTION  of  subcommittee                 
  recommendations for the Department  of Education budget into                 
  SB 175.   Senator Kerttula  OBJECTED.  Co-chair  Frank asked                 
  for a show of  hands.  The motion CARRIED on a  vote of 6 to                 
  1.  (Senators Frank, Jacko, Kelly, Pearce, Rieger, and Sharp                 
  were in support.  Senator Kerttula was opposed.)                             
                                                                               
  Later in the  meeting, Senator Kelly MOVED amendment #2 that                 
  would add $34.0 in general funds and reduce $34.0 in program                 
  receipts  to  the  Teacher  Certification  Program  for  the                 
  Department of Education (copy on file).  No objections being                 
  raised, it was ADOPTED.                                                      
                                                                               
  Senator Kelly MOVED an amendment in the form of a memo dated                 
  April 3, 1993, subject: Amendment/Museum Operations be added                 
  to the Department of Education budget  (copy on file).  This                 
  memo amends  letter  of  intent #1.    No  objections  being                 
  raised, it was ADOPTED.                                                      
                                                                               
  Senator Kerttula MOVED letter of intent #5 by Senator  Kelly                 
  and co-sponsored by Senators Jacko and Kerttula, that speaks                 
  to educational  program appropriation  (copy on  file).   No                 
  objections being raised, it was ADOPTED.                                     
                                                                               
  Department of Revenue                                                        
                                                                               
                                                                               
  Senator  Jacko  outlined  subcommittee  decrements  to   the                 
  corrections of the FY94 operating  budget for the Department                 
  of Revenue (copy  of handout on  file titled "Department  of                 
  Revenue-Senate Reductions").   Co-chair  Frank asked  if the                 
  two positions in the Child Support Enforcement field offices                 
  would be eliminated  rather than  transferred to  Fairbanks.                 
  COMMISSIONER  DARREL J.  REXWINKEL,  Department of  Revenue,                 
  answered,  because  the  funding  would  be eliminated,  the                 
  offices in  Juneau and  Fairbanks would  be closed, and  the                 
  positions would be eliminated.                                               
                                                                               
  In answer to  Senator Kerttula, Senator Jacko  affirmed that                 
  oil and  gas auditors  were included  in  the Department  of                 
  Revenue  budget.     Senator  Kerttula  asked  if   all  the                 
  investigators were eliminated, would the state rely on state                 
  police to  investigate internal  infractions of  regulations                 
  over DEC.  Senator  Kerttula also asked if the  Director had                 
  been retained.   Commissioner Rexwinkel stated that  the two                 
  remaining investigator positions would be eliminated leaving                 
  an  executive director and  a few clerical  staff that would                 
  report to the Alcohol Beverage Control Board, leaving only a                 
  licensing function.    He said  the  investigation  function                 
  could be contracted out.                                                     
                                                                               
  Senator Kerttula said that he would have an amendment on the                 
  Child Support Enforcement component at a later time.                         
                                                                               
  Senator   Kelly   MOVED   for   ADOPTION   of   subcommittee                 
  recommendations for the Department of Revenue budget into SB
  175.  No objections being raised, it was ADOPTED.                            
                                                                               
  Department of Administration                                                 
                                                                               
  CO-CHAIR STEVE  FRANK outlined  subcommittee increments  and                 
  decrements to the  corrections of the FY94  operating budget                 
  for the  Department of  Administration (copy  of handout  on                 
  file titled "Department of Administration - FY 94").                         
                                                                               
                         At Ease 10:47am                                       
                        Reconvene 10:50am                                      
                                                                               
  Senator  Kerttula  MOVED  for adoption  of  amendment  #1 in                 
  regard to the Pioneers Homes (copy  on file).  Senator Jacko                 
  OBJECTED.  Co-chair  Frank asked for a  show of hands.   The                 
  motion FAILED on a vote of 6  to 1.  (Senators Frank, Jacko,                 
  Kelly,  Pearce,  Rieger, and  Sharp  were opposed.   Senator                 
  Kerttula was in support.)                                                    
                                                                               
  Senator  Kerttula  MOVED  for adoption  of  amendment  #2 in                 
  regard  to nutrition and  transportation services grants for                 
  the  Older  Alaskans Commission  (copy  on file).   Co-chair                 
  Frank OBJECTED.  Co-chair  Frank asked for a show  of hands.                 
  The  motion FAILED on  a vote of  6 to 1.   (Senators Frank,                 
                                                                               
                                                                               
  Jacko,  Kelly,  Pearce,  Rieger,  and  Sharp  were  opposed.                 
  Senator Kerttula was in support.)                                            
                                                                               
  CO-CHAIR  DRUE PEARCE  MOVED  for ADOPTION  of  subcommittee                 
  recommendations for the Department of Administration  budget                 
  into SB  175.   Senator Kerttula  OBJECTED.   Co-chair Frank                 
  asked for a show of hands.   The motion CARRIED on a vote of                 
  6 to 1.  (Senators Frank,  Jacko, Kelly, Pearce, Rieger, and                 
  Sharp were in support.  Senator Kerttula was opposed.)                       
                                                                               
                         At Ease 11:05am                                       
                        Reconvene 10:10am                                      
                                                                               
  University of Alaska                                                         
                                                                               
  SENATOR STEVE  RIEGER outlined  subcommittee increments  and                 
  decrements to the  corrections of the FY94  operating budget                 
  for the University of Alaska (copy of handout on file titled                 
  "FY94   Senate   Finance   University   of   Alaska   Budget                 
  Subcommittee Recommendations" and "Summary Sheet").                          
                                                                               
  Senator Rieger  stated that the subcommittee submitted three                 
  letters  of intent.    He explained  that  the first  letter                 
  titled  "University  of  Alaska,  Anchorage"  spoke  to  the                 
  instructional  funds  added in  this  budget and  that these                 
  funds  should  be  used  for  the  best  mix  in  delivering                 
  instruction  (copy  on  file).   Senator  Kerttula  asked if                 
  "instructional funding" is  understood to be regional  wide.                 
  Senator Rieger confirmed  that UAA was meant  to include all                 
  the campuses in the UAA system.                                              
                                                                               
  Senator Rieger spoke to  the second letter of intent  titled                 
  "Statewide Programs and  Services" (copy on file).   He said                 
  the  intent  of the  legislature  is that  workloads  of the                 
  faculty reflect teaching as the  primary responsibility.  It                 
  also requests  that all  faculty on all  campuses provide  a                 
  report of their 1993 workloads.                                              
                                                                               
  The third  letter of  intent titled  "University of  Alaska,                 
  Anchorage", asks that each  main campus pursue opportunities                 
  to  receive  grants  and  other   sources  to  help  support                 
  University operations (copy on file).  Senator Kerttula said                 
  he was in support of out-reach  to receive other funding for                 
  the  University.   However,  he  warned that  often research                 
  grants  require  peer  research and  little  instruction  is                 
  associated with them.                                                        
                                                                               
  Senator Rieger  argued that  research grants  could allow  a                 
  portion  of   the  grant   to  be   allocated  against   the                 
  administration.    He said  it was  a  way to  relieve other                 
  dollars from the administration, and  those funds could then                 
  go toward teaching.  He also said they could help  provide a                 
  stipend  for graduate students which would  be useful in the                 
  university system.   He said his  concerns were the same  as                 
                                                                               
                                                                               
  Senator Kerttula's, and reiterated that  the primary role of                 
  teachers is to teach.                                                        
                                                                               
  Senator Jacko asked  how many new  employees would be  added                 
  because of  the addition  of instructional  funds.   Senator                 
  Rieger said that he did not know, however, because of the 36                 
  percent  reduction  in fixed  costs  that would  have  to be                 
  absorbed, administrative positions would be eliminated.                      
                                                                               
                         Recess 11:15am                                        
                        Reconvene 11:17am                                      
                                                                               
  Senator Rieger MOVED  for ADOPTION of  the three letters  of                 
  intent for  the University of  Alaska.  No  objections being                 
  raised, it was ADOPTED.                                                      
                                                                               
  Senator  Rieger   MOVED   for   ADOPTION   of   subcommittee                 
  recommendations for the University of  Alaska budget into SB
  175 and asked  the committee  to consider a  request by  the                 
  University to change the  format of the number of  sheets of                 
  detail from 113 to 39.  Senator Kerttula asked if that would                 
  mean less  detail would  be available  for the  legislature.                 
  BRIAN ROGERS,  Vice  President for  Finance,  University  of                 
  Alaska, said the  change proposed  that instead of  separate                 
  allocations for each campus, one allocation per campus would                 
  be shown with project budget forms for each  function within                 
  the  campus.  This format was used  from 1982 until 1992 and                 
  was changed to a long form last year.                                        
                                                                               
  NANCY SLAGLE, Fiscal  Analyst, Legislative Finance Division,                 
  supported this proposal,  and even  though it would  contain                 
  less pages, she felt it would  provide adequate detail.  She                 
  said that if the legislature agreed with the new proposal, a                 
  decision  made  today   would  enable  Legislative   Finance                 
  Division to take the steps to automate the process.  Senator                 
  Jacko asked if this proposal would  change the way the money                 
  was expended, and give the University more flexibility.  Mr.                 
  Rogers said that  it would not.  In the event of a transfer,                 
  less paperwork  would be  needed, but  the University  would                 
  still have  to report  the transfer.   Mr.  Rogers said  the                 
  major difference  was the preparation of the detail for next                 
  year's budget cycle.                                                         
                                                                               
  Co-chair  Frank said  he  would like  to hold  this proposal                 
  until later in  the meeting.   (See April 3, 1993  afternoon                 
  minutes.)    Senator  Rieger  again  MOVED for  ADOPTION  of                 
  subcommittee recommendations  for the  University of  Alaska                 
  budget into  SB 175.   No  objections being  raised, it  was                 
  ADOPTED.                                                                     
                                                                               
  Department of Public Safety                                                  
                                                                               
  Senator   Rieger   outlined   subcommittee  increments   and                 
  decrements to the  corrections of the FY94  operating budget                 
                                                                               
                                                                               
  for the Department of Public Safety (copy of handout on file                 
  titled   "FY94   Senate   Finance   Public   Safety   Budget                 
  Subcommittee Recommendations").                                              
                                                                               
  Senator Rieger presented  three letters  of intent from  the                 
  subcommittee.    The  first  spoke  to  the  Highway  Safety                 
  Planning Agency  to provide  a grant  to the  EMS system  in                 
  DH&SS (copy on file).  This would not supplant general funds                 
  but be an  increase.  The  next two letters provided  intent                 
  language for Fish and Wildlife,  and Detachments to increase                 
  sources from  other than  general fund  receipts, and  bring                 
  revised  program  receipt  requests  to  LB&A  for  enhanced                 
  protection (copies  on file).   Senator  Kerttula asked  how                 
  both would get program receipts.  Senator Rieger said he was                 
  not  clear  if   that  was  possible  but   that  fines  and                 
  forfeitures could be  an avenue.   Senator Rieger  explained                 
  that  the subcommittee felt in a  time of declining revenue,                 
  an increase in the budget was not feasible but did allow for                 
  personal service funding  to avoid a decrease  in personnel.                 
  Senator Kerttula  voiced his  concern  about the  department                 
  taking such action as speed traps in order to provide funds.                 
                                                                               
  Co-chair Frank asked for confirmation that the intent of the                 
  subcommittee was that the department  would come before LB&A                 
  to  explain  the potential  sources  and have  them approved                 
  before  any  money  is expended.    Senator  Rieger answered                 
  affirmatively,  and explained  that the original  plan would                 
  have put program receipts into the budget.  Senator Kerttula                 
  cautioned that this process should be monitored closely.                     
                                                                               
  Senator Rieger MOVED  for ADOPTION of  the three letters  of                 
  intent for the Department  of Public Safety.  No  objections                 
  being raised, they were ADOPTED.                                             
                                                                               
  Senator  Kerttula  MOVED  for ADOPTION  of  amendment  #1 in                 
  regard  to  the Department  of  Public Safety  restoring the                 
  Governor's  increment  for  the  Troopers  (copy  on  file).                 
  Senator Frank OBJECTED.  Co-chair Frank  asked for a show of                 
  hands.   The motion FAILED on  a vote of 6  to 1.  (Senators                 
  Frank, Jacko, Kelly, Pearce, Rieger, and Sharp were opposed.                 
  Senator Kerttula was in support.)                                            
                                                                               
  Senator   Rieger   MOVED   for   ADOPTION  of   subcommittee                 
  recommendations  for the Department  of Public Safety budget                 
  into SB 175.  No objections being raised, it was ADOPTED.                    
                                                                               
  Department of Health & Social Services                                       
                                                                               
  Senator  Rieger  presented  two letters  of  intent  for the                 
  Department of  Health & Social  Services.  The  first letter                 
  said that  it was  the intent  of the  legislature that  the                 
  statewide  EMS  system  apply to  the  Department  of Public                 
  Safety for a  $50.0 Highway  Safety Planning Agency  federal                 
  grant (copy on  file).  The second  letter said that  it was                 
                                                                               
                                                                               
  the intent of  the legislature that DH&SS  aggressively work                 
  toward  increasing  self  sufficiency  efforts  in order  to                 
  transition as many  clients as  possible into the  workforce                 
  (copy  on  file).    Discussion  followed  between  Senators                 
  Kerttula and Rieger regarding  department staff working with                 
  welfare applicants.                                                          
                                                                               
  Senator  Rieger MOVED  for  ADOPTION of  the two  letters of                 
  intent for the Department  of Health & Social Services.   No                 
  objections being raised, it was ADOPTED.                                     
                                                                               
  Department of Transportation & Public Facilities                             
                                                                               
  SENATOR BERT  SHARP  outlined  subcommittee  increments  and                 
  decrements to the  corrections of the FY94  operating budget                 
  for the  Department  of Transportation  & Public  Facilities                 
  (copy   of   handout   on   file   titled   "Department   of                 
  Transportation and  Public Facilities, FY  94 Budget  Senate                 
  Finance Subcommittee Work Draft, 4/2/93 Revised #4").                        
                                                                               
  End SFC-93 #46, Side 1                                                       
  Begin SFC-93 #46, Side 2                                                     
                                                                               
  Senator Sharp said the recommended budget was a reduction of                 
  2.6 percent from  the Governor's budget, and  a reallocation                 
  of $1.2M.  He presented letters of intent #3, #4, and #5 for                 
  DOT/PF (copies on  file).  Co-chair Frank asked  the letters                 
  of intent be held until later in the meeting.                                
                                                                               
  Senator Kerttula submitted  amendment #1  for DOT/PF to  add                 
  $180.0  for  maintenance of  the  Anchorage station,  to add                 
  $539.0 for  maintenance for the  central region, and  to add                 
  $40.0  to  restore   the  cut  to  the   contract  with  the                 
  Municipality of Anchorage (copy on file).  He said that last                 
  year DOT/PF  had been reduced  by $2.5M  and that  reduction                 
  came out of  maintenance.  He  voiced his concern that  lack                 
  highway maintenance funds would eventually cause  a disaster                 
  especially on the  main highways.  Co-chair  Frank OBJECTED.                 
  Co-chair Frank asked for a show of hands.  The motion FAILED                 
  on a  vote  of 5  to  1.   (Senators Frank,  Jacko,  Pearce,                 
  Rieger,  and Sharp  were opposed.   Senator Kerttula  was in                 
  support.  Senator Kelly was absent from the meeting when the                 
  vote was taken.)                                                             
                                                                               
  Co-chair  Sharp  said  that each  region  received  the same                 
  percentage  reduction  as any  other  region.   He  said the                 
  northern region  chose to  be more  specific when  targeting                 
  their reductions, and  southeast and central  region elected                 
  to take more  reductions in unallocated highway  maintenance                 
  and operations.   Senator Kerttula  reiterated that a  large                 
  cut of $700-800.0 was being made to an area that has most of                 
  the population of  the state  and tremendous road  problems.                 
  He cited the Brad-Phillips law case and felt the state could                 
  end up in court due to disasters on the road.                                
                                                                               
                                                                               
  Senator  Kerttula  submitted  amendment  #2  for DOT/PF  for                 
  maintenance and facilities  (copy on file).   Co-chair Frank                 
  OBJECTED.   Co-chair Frank asked for  a show of  hands.  The                 
  motion FAILED on  a vote of 6 to 1.  (Senators Frank, Jacko,                 
  Kelly,  Pearce,  Rieger, and  Sharp  were opposed.   Senator                 
  Kerttula was in support.)                                                    
                                                                               
  Senator Sharp  MOVED for  ADOPTION of the  three letters  of                 
  intent  for  the  Department   of  Transportation  &  Public                 
  Facilities.  No objections being raised, they were ADOPTED.                  
                                                                               
  Senator   Sharp   MOVED   for   ADOPTION   of   subcommittee                 
  recommendations  for  the  Department  of  Transportation  &                 
  Public  Facilities  budget into  SB  175.   Senator Kerttula                 
  OBJECTED.  Co-chair Frank  asked for a show  of hands.   The                 
  motion CARRIED on a vote of 6 to 1.  (Senators Frank, Jacko,                 
  Kelly, Pearce, Rieger,  and Sharp were in support.   Senator                 
  Kerttula was opposed.)                                                       
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The morning meeting was recessed at approximately 12:00 p.m.                 
                                                                               

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