Legislature(2015 - 2016)SENATE FINANCE 532
02/20/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB27 | |
| Presentation: Fy 16 Budget Amendments | |
| SB40 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
February 20, 2015
9:08 a.m.
9:08:40 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:08 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Pat Pitney, Director, Office of Management and Budget,
Office of the Governor.
SUMMARY
SB 27 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 27 was HEARD and HELD in committee for further
consideration.
SB 40 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS
SB 40 was HEARD and HELD in committee for further
consideration.
PRESENTATION: FY 16 BUDGET AMENDMENTS
SENATE BILL NO. 27
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, making
reappropriations, and 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."
9:10:07 AM
^PRESENTATION: FY 16 BUDGET AMENDMENTS
9:10:10 AM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, looked at the spreadsheet of the FY
2016 Operating Budget Amendments (copy on file). She shared
that keeping with the governor's overall targets was the
guiding principle behind drafting the operating budget. She
remarked that there were additions and reductions that were
represented as a combination. She shared that lines 1
through 3 restored funding for the Alaska Native Arts
Marketing, which was the only program that was eliminated
from the particular component. She noted an additional
reduction to tourism marketing, and the Alaska Seafood
Marketing Institute (ASMI). She shared that $300,000 was
the total request for the Alaska Native Arts Marketing. She
furthered that there was a $150,000 reduction to each of
the other programs.
Vice-Chair Micciche queried the page number. Co-Chair Kelly
replied that it was page 104.
9:12:04 AM
AT EASE
9:12:33 AM
RECONVENED
9:12:35 AM
Vice-Chair Micciche wondered how much of the $300,000
appropriation was allocated for the direct purchase of art.
Ms. Pitney replied that she did not know the exact
proportion. The appropriation was both helping rural artist
market their art from their community and moving the art
into Anchorage to sell out of a retail area. The plan for
the function was to eventually move to privatization. There
was a mistaken impression that it could happen in the
current year, so it was restored with the expectation that
it would move away from state subsidy in the future.
Vice-Chair Micciche shared that he was a supporter of
native arts, but wondered if the appropriation was a
priority. He felt that there were private options for this
category and other budget categories.
Ms. Pitney looked at line 4:
Partially Restore Regional and Community Jails Program
and Cover Prisoner Transportation Costs The Department
of Corrections (DOC) will renegotiate contracts with
communities to provide short-term confinement of
unsentenced persons detained under state law for the
actual cost per bed per day. This funding will also be
used to cover any additional costs for prisoner
transportation. 7,000.0
Senator Hoffman remarked that many of the programs,
including the Regional Jails, were lined with the State
Troopers and Judicial System. He urged the examination of
eliminating one of those programs. He wondered if there was
a better economical effort to enhance the system. He
believed that the original proposal was a cost shift to a
different department.
Senator Olson applauded the efforts of the administration
in examining the law enforcement issue. He remarked that it
was important for a community to have a holding facility
for law enforcement. He wondered if there was a
distribution of the communities that were reinstated to
partial payment. Ms. Pitney replied that there was a list,
and she had engaged in conversations with the Department of
Corrections (DOC). She shared that the options would be
presented in the subcommittee process.
9:18:02 AM
Senator Olson surmised that the final decisions were not
yet made regarding the specific communities that would face
partial or full funding. Ms. Pitney agreed. She shared that
the administration had requested an analysis of the current
jail usage. She stated that there should be an
understanding that the funding would not be completely
eliminated, because the funding was set up like a revenue
sharing program.
Senator Olson felt that it was not a revenue sharing
program. He felt that communities, like Kotzebue, would
bear all costs if the states eliminated the funding.
Ms. Pitney looked at lines 5 and 6. The items were for
accounting to help the Post-Secondary Education Commission
to provide a clear view of their receipts. They were intra-
agency receipts to create a full picture of one component.
Ms. Pitney addressed line 7.
Medicaid Cost Containment Initiatives. The Department
of Health and Social Services has identified ways to
control growth in the current Medicaid program that
will achieve an approximate $20,000.0 general fund
savings in the current Medicaid program. The majority
of the initiatives will require new regulations and
fee schedules and include changes to shift costs to
100% federal match for tribal services, changes to the
Personal Care Assistance services eligibility
requirements, to medical equipment, vision, dental,
behavioral health, hearing services, transportation
costs, and a contract for management of care.
Co-Chair Kelly queried the mechanism that caused the
individuals to shift to tribal health. Ms. Pitney replied
that there were some waiver requirements. She agreed to
provide further information.
Co-Chair Kelly asked if the efforts were in anticipation of
the Alaska Native Medical Center patient housing. Ms.
Pitney asked for more information.
Co-Chair Kelly clarified that he would like more
information about tribal housing at the Alaska Native
Medical Center related to SB 88 from a former legislature.
He shared that there was anticipated shift of medical
expenses to pay for the lease. Ms. Pitney agreed to provide
that information.
9:23:12 AM
Senator Dunleavy wondered if the governor was formulating a
Medicaid expansion bill, so the legislature can hold
hearings. Ms. Pitney responded that the governor was
considering a Medicaid expansion bill.
Senator Dunleavy felt that Medicaid expansion must have a
number of hearings in order to understand the governor's
point of view.
Co-Chair MacKinnon shared that Alaska had issued $35,000 on
a bond that was on payment in a hospital facility at Alaska
Native Health Consortium. The state would then see
repayment over time in the proposed cost savings. She
wondered whether the funds were for housing or the neonatal
center that was addressed in the current budget.
Co-Chair Kelly shared that the neo-natal health was part of
the funding, but it was anticipated Medicaid money for more
than just the neo-natal portions of the budget.
Co-Chair MacKinnon pointed out that there was an
anticipated debt service payment on the current investment,
with a portion represented as cost savings.
Co-Chair Kelly agreed. He wanted to clarify the intention
of the funding.
Ms. Pitney looked at lines 8 and 9, which were related to
the aerospace move to more self-reliance. The GF funding of
$4 million was reduced. The department asked that the
funding be replaced with receipt authority for aerospace
receipts.
Co-Chair Kelly recalled that the board and executive
director had a different point of view. The executive
director would welcome only federal receipts, and the board
felt that they still may need $2 million. Ms. Pitney shared
that the administration had received information stating
that they only wanted receipts.
Ms. Pitney noted that items 10 through 14 were combined.
The ferry schedules were released in October, and people
had purchased ferry tickets in the meantime, so there was a
desire for a temporary ferry service restoration. There was
a one-time reduction in the highway funds from the
different regions.
9:30:01 AM
Vice-Chair Micciche felt that delaying the ferry reduction
would make the legislature look bad. He shared that this
was an example of a difficult decision for his
subcommittee. He shared that he may not approve this
request.
Senator Dunleavy wondered what services would be reduced
from the road system by moving the money to the ferry
system. He asked if the cost of fuel had been examined in
the ferry system. He wondered if the potential savings in
fuel could be transferred to the schedule issue. Ms. Pitney
replied that there was $27 million in the fuel trigger
mechanism in FY 15. That fuel trigger mechanism was removed
from the approved budget, so the Department of
Transportation and Public Facilities (DOT/PF) lost that
funding. In addition DOT/PF had faced additional cuts, like
other departments.
Co-Chair MacKinnon wondered how many ferry tickets had been
purchased, and the cost of submitting a new fee schedule.
Ms. Pitney highlighted lines 15 and 16. The contract was
with the University of Alaska Federation of Teachers (UAFT)
was finalized in the time between the endorsed budget
deadline and the current meeting. The salary adjustment
required under the contract would be $1.5 million, of which
50 was GF. She remarked that line 16 was tied directly to
that contract. She stated that OMB had a target for each
operating budget for each department. She stated that line
16 should read, "Reduce the general fund amount to meet the
administration's target for the University of Alaska not
tied to this contract." She announced that a net increase
of DGF of $754,000 was required between the two line items.
Senator Dunleavy explained that school districts paid for
their contracts out of their operating budgets that were
outlined by the state. She wondered why that did not occur
for the University. Ms. Pitney responded that the
University's contracts were treated more like a state
agency. The contracts were brought to the legislature for
approval and funding. She shared that the legislature must
approve the contract and appropriate the funding.
Senator Dunleavy restated his question. He wondered why the
Universities did not function like school districts. Ms.
Pitney explained that the school districts were not
required to run their contracts through the legislature.
The University and other state agencies were required to
run their contracts through the legislature. She did not
know what it would require to get the University to act
like school districts, but felt that there may need to be a
statute adjustment. There was a provision in the operating
budget which said, "The amount appropriated in this bill
covers the provisions of these negotiated contracts."
Therefore, any contract provisions must be funded.
9:38:51 AM
AT EASE
9:40:00 AM
RECONVENED
9:41:09 AM
Co-Chair Kelly felt it was unusual to receive this
authority. He anticipated pushback on the University item.
Ms. Pitney understood that it was an unusual request. She
shared that it was not common practice, but several states
had a provision to allow for distributions within
departments and across departments. She stressed that it
was an unusual fiscal season, the request provided a degree
of flexibility and prioritization within the legislature.
Co-Chair Kelly felt that attaching flexibility to a
specific amount resulted in a "slush fund." He felt there
may be constitutional and statute problems. He was not sure
he was comfortable with the proposed mechanism.
Ms. Pitney looked at line 18. It was contingency language
for the Spill Prevention and Response (SPAR) fund. She
stated that during the formulation of a long-term solution,
the request covered the SPAR fund through 2016. She shared
that there was an anticipated settlement that would make
the fund solvent.
Co-Chair Kelly wondered if the request was for Aniak. Ms.
Pitney replied in the affirmative.
Vice-Chair Micciche remarked that he was working on a
solution to the SPAR fund issue. He shared that Alaska was
in a difficult fiscal time. He remarked that state
departments seemed to want to continue with the status quo,
rather than examining creative ways to solve problems
within the law.
Ms. Pitney looked at lines 19 and 20. They were the latest
projections of the adjustments from Permanent Fund into the
earnings reserve.
SB 27 was HEARD and HELD in committee for further
consideration.
9:48:01 AM
AT EASE
9:51:09 AM
RECONVENED
SENATE BILL NO. 40
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; making
reappropriations; amending appropriations; repealing
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
9:51:33 AM
Senator Dunleavy wondered how the budget approach reduced
the budget by 25 percent.
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR replied that the budget reduced the
agency operating budgets by approximately 6 percent. She
stated that, over a four-year timeframe, it was the first
step in a 25 percent reduction. She stressed that this was
a first step, and remarked that the solutions would be more
dramatic as the pressure was building.
Ms. Pitney looked at line 4 of the FY 15 Supplemental
Budget Amendment Spreadsheet (copy on file). She stated
that it was a request for emergency repairs for the State
Forest Road System in the Tanana Valley State Forest. She
shared that it was a request that had been presented on
multiple occasions. The need became more apparent recently,
which was why it did not appear in the previous versions of
the supplemental budget. The request was an $896,000 road
repair, which was needed because of the rain. The revenue
from the forest was approximately $250,000 per year, so the
repair was required to maintain the revenue.
Ms. Pitney looked at line 9, which was a reappropriation of
two projects. The Harbor Program would not be complete
because of an alternative funding source. The Glenn Highway
ruts would be complete, plus additional federal funds. The
reappropriations allowed DOT/PF to install injection wells.
Ms. Pitney addressed lines 10 and 11, which were airport
repairs fund source changes. They were originally in the
construction fund and were moved to the airport fund. These
were net zero changes, but changing the fund source for
project completions.
Ms. Pitney looked at line 12 was a repeal of $2.7 million
for Alaska Gasline Inducement Act (AGIA).
Ms. Pitney explained lines 13 and 14. The items were
intended to note that there were appropriations in the
previous year that exceeded the fund balance of the funds
that they were originated.
Vice-Chair Micciche felt that the final operating budget
would result in a great amount of discomfort.
SB 40 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
9:59:06 AM
The meeting was adjourned at 9:59 a.m.
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