Legislature(2017 - 2018)SENATE FINANCE 532
02/09/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB144 | |
| SB143 | |
| SB168 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 144 | TELECONFERENCED | |
| *+ | SB 168 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 143 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
February 9, 2018
9:04 a.m.
9:04:41 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:04 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
David Teal, Director, Legislative Finance Division; Pat
Pitney, Director, Office of Management and Budget, Office
of the Governor; Neil Steininger, Chief Budget Analyst,
Office of Management and Budget.
SUMMARY
SB 143 APPROP: MENTAL HEALTH BUDGET
SB 143 was HEARD and HELD in committee for
further consideration.
SB 144 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 144 was HEARD and HELD in committee for
further consideration.
SB 168 APPROP: SUPPLEMENTAL OP.; FUND; AMENDING
SB 168 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 144
"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 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."
9:05:40 AM
Co-Chair Hoffman related that the Operating and Mental
Health budgets were before the committee. He said that the
administration would offer an additional presentation on
the Governor's Supplemental requests. He relayed that the
committee substitutes for the Operating and Mental Health
budgets before the committee were a rearrangement of the
Governor's budget requests, in a form that both the
Division of Legislative Legal and the Division of
Legislative Finance (LFD) believed were appropriate.
9:05:52 AM
Co-Chair MacKinnon MOVED to ADOPT the committee substitute
for SB 144, Work Draft 30-GS2564\D (Wallace, 1/29/18).
Co-Chair Hoffman OBJECTED for discussion.
9:06:32 AM
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained the committee substitute. He stated that version
D, with a few exceptions, used the same fund sources, same
amounts, located in the same areas of the budget, as the
Governor's proposed bill. He noted that the exceptions were
several contingent appropriations; The Constitutional
Budget Reserve (CBR) language pertaining to $425 million
and the $1.1 million appropriation for "hot shot" crews in
the Department of Natural Resources. He stated that the
division treated contingencies as the maximum value, while
the Governor's budget treated them as a minimum. He related
that with those two differences, the transactions were the
same. He offered that the point in creating the current
version, rather than using the Governor's budget, was to
make the conforming technical changes to make the bill
readily amendable. He said that format changes would not be
as issue future iterations of the legislation but for all
practical purposed the bill mirrored the Governor's
proposal.
9:08:27 AM
Senator Micciche spoke to the maximum and minimum value
difference related to the contingency language. He wondered
whether the bottom line changed because of the differing
viewpoints.
Mr. Teal replied in the affirmative. He stated that the
number in the current version was higher, because the
administration counted General Fund spending as zero (in
anticipation of federal dollars for the "hot shot"
program), while the LFD counted it as $1.1 million - the
total that could be spent.
9:09:19 AM
Mr. Teal said that there was a two-page document that
explained some of the larger changes, "Summary of Changes
from the Governor's Operating Bill and CSSB 144(FIN) Work
Draft 30-GS2564\Wallace, 1/29/18"(copy on file) and a Word
document that tracked changes, "SB 144 ver A to D from Leg
Legal 1/30/18 CS Zero".
9:09:54 AM
Co-Chair Hoffman explained that any substantive amendments
would be addressed by each budget subcommittee and brought
before the committee after the public process. He noted
that the committee was awaiting the draft sent by the other
body, as well.
9:10:20 AM
Co-Chair MacKinnon surmised that the budget as proposed by
the Governor did not include community assistance.
Mr. Teal replied that community assistance was in the
budget in the sense that a supplemental appropriation has
been included, bringing the year-end FY 18 balance up to
$90 million, which allowed for a $30 million appropriation
for distribution to communities in FY 19. He pointed out to
the committee that there was no FY 19 funding for community
assistance, which LFD believed should exist by law. He
explained that FY 17 excess earnings should have been
deposited for FY 19, this had not been done; currently,
communities would receive $30 million in FY 19, which will
drop to $20 million in FY 20.
9:11:49 AM
Co-Chair Hoffman argued that the Governor was short funding
the future and was not following the intent of the pervious
legislation pertaining to community revenue sharing, which
was that communities should be able to depend on the fund
source for planning purposes.
9:12:49 AM
Co-Chair MacKinnon noted the second item, pensions, had not
been funded to the requested amount determined by the
previous actuarial numbers.
Mr. Teal replied that the June 2016 valuation, which had
determined the FY 19 rates, reflected that the state
assistance contributions to retirement programs, should
have been approximately $299 million. He said that in 2015
there had been a large deposit made to the retirement
systems, with the intent that the 3-year rate setting lag
should be truncated to 2 years. He said that in an effort
to shorten the lag, the June 2016 valuation had been
updated with new assumptions, which had resulted in an
impact to state assistance by $35 million - mostly due to
exceptional returns experienced in FY 17. He relayed that
the Governor's bill had built in retirement savings under a
group waiver for retirees that would reduce drug costs and
could result in an additional savings. He stated that the
Governor's budget had those savings built in immediately,
even though they were not yet achieved. He suggested
considering whether the committee wanted to build in
potential savings before they had materialized, or whether
traditional actuarial methods should be used. He worried
about taking advantage of savings that had not yet
materialized.
9:16:25 AM
Co-Chair MacKinnon expressed some trepidation about the
administration taking the $3 billion cash infusion in an
attempt to increase the funding ratio for retiree
healthcare. She said that the projected unfunded pension
obligation was growing. She spoke to the tax credits for
industry and when those credits should be paid. She asked
for details, based on current statute, concerning short
funded tax credits in the Governor's budget.
Mr. Teal suggested that in future talks concerning
retirement benefits that the committee should note the
actuarial projections over the next 20 years. He said that
the funding ration had fallen over the last few years, and
would continue to fall, and that future contributions were
expected to increase. He questioned decreasing
contributions now, in the face of falling funding ratios,
and increasing contributions in the future.
Mr. Teal spoke to the tax credits. He explained that the
statutory minimum would be $206 million, and alternative
interpretation was as low as $49 million. He said that the
administration supported the $206 million level of funding.
He stated that the Governor's budget contained $27 million
for oil and gas tax credits, which was what the cost of
debt service would be for issuing bonds to fully buy the
outstanding tax credits and then make the debt service
payments. He reiterated that there was no money deposited
into the oil and gas tax credit purchase fund in the budget
but was instead a $27 million appropriation to pay debt
service on bonds that would be used to buy credits.
9:21:08 AM
Co-Chair Hoffman clarified that the cs did not address any
of the issues under conversation but would be discussed by
the committee during the process of amending the
legislation.
9:22:00 AM
Co-Chair MacKinnon believed that the budget was lower than
it should be to meet the state's responsibility to
industry.
9:22:58 AM
Senator Micciche asked how legislation, and the
consideration of the passage of certain bills, would be
included in the budget.
9:23:34 AM
Co-Chair Hoffman replied that the statutorily required
items under discussion would be the base of the budget.
9:24:23 AM
Senator Micciche understood that if legislation passed
during the budgetary process, it would be reflected in a
final budget document.
9:24:42 AM
Mr. Teal stressed that LFD would have the three fiscal
notes that were built into the budget: oil and gas tax
credits, senior benefits, and school trust fund -
preferably as fiscal notes. He said that, for example, the
division would have preferred a $206 million appropriation
in the bill for tax credits, with a fiscal note that
reduced the amount and changing it to debt service. He
relayed that there were supplemental appropriations in the
Operating Budget, he emphasized that the bill version
before the committee was not an LFD recommendation, but a
rewrite of the Governor's proposal that contained the
fiscal notes and the supplemental appropriations included
by the administration. He said that it would be up to the
amendment process to change the bill.
9:26:26 AM
Co-Chair Hoffman stated that the practice for 20 years had
been to not include supplemental requests in the Operating
Budget.
9:27:04 AM
Senator Micciche wondered whether the supplemental items
included in the bill could be highlighted.
9:27:21 AM
Co-Chair Hoffman hoped to address the supplemental items at
a later date.
9:27:43 AM
Senator Olson remarked that there was a difference between
the philosophical and political implications related to the
budget. He asked whether there was an actual financial
difference between using fiscal notes in the budget and the
way the administration had presented the budget proposal.
Mr. Teal replied that there was no difference as long as
the legislation passed; if money was going to be put in the
budget that was contingent on the passage of a bill, if the
fiscal note matched the amount of money that was currently
in the budget - there was no real difference.
9:28:46 AM
Senator Olson spoke of the dwindling constitutional budget
reserve (CBR), and the possible use of the earnings
reserve. He wondered whether the Governor's approach was
faulty.
Mr. Teal thought that transparency was in the eye of the
beholder. He believed that the administration was trying to
present a budget that they thought was was transparent.
9:29:44 AM
Co-Chair Hoffman WITHDREW the OBJECTION. There being NO
OBJECTION, the proposed committee substitute was adopted.
SB 144 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 143
"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."
9:30:22 AM
Co-Chair MacKinnon MOVED to ADOPT the committee substitute
for SB 143, Work Draft 30-GS2566\D (Wallace, 1/29/18).
Co-Chair Hoffman OBJECTED for discussion.
9:30:42 AM
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION
explained the committee substitute. He relayed that the
bill had been drafted with the same considerations as the
Governor's bill.
9:31:22 AM
Co-Chair Hoffman WITHDREW the OBJECTION. There being NO
OBJECTION, the proposed committee substitute was adopted.
SB 143 was HEARD and HELD in committee for further
consideration.
9:31:58 AM
AT EASE
9:33:31 AM
RECONVENED
SENATE BILL NO. 168
"An Act making supplemental appropriations and other
appropriations; making an appropriation to capitalize
a fund; amending appropriations; and providing for an
effective date."
9:34:12 AM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed the FY 2018 Supplemental
Summary (copy on file). She announced that she would be
discussing the supplemental requests included in the
December 15, 2018 budget, at which time $170 million in
unrestricted general funds (UGF) for supplementals had been
requested. She recalled that the CBR threshold was $200
million additional funds to accommodate supplementals. She
furthered that the January 29, 2018 supplementals requested
$7.9 million in UGF, the supplemental bill before the
committee $5 million below the January 29, 2018
supplemental total.
9:35:43 AM
Co-Chair MacKinnon agreed that the spreadsheet reflected
the $5 million drop in the total, but that the UGF spend
had increased by $8 million.
Ms. Pitney responded that the UGF was $170 million, plus
the $7.9 million, she said the administration would address
each request line by line for clarity.
9:36:38 AM
Co-Chair MacKinnon queried the largest driver of the $7.9
million UGF request.
Ms. Pitney asked whether the committee wished to begin with
the December 15, 2018 supplementals or the January 29, 2018
supplemental requests.
9:37:06 AM
Co-Chair Hoffman directed Ms. Pitney to proceed with her
initial presentation but noted that the additional capital
supplemental, totaling $6 million in UGF, that had not been
mentioned.
9:37:20 AM
NEIL STEININGER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT
AND BUDGET, discussed the FY 2018 Supplemental Items (copy
on file).
Mr. Steininger looked at Lines 2 through 4:
Line 2
UGF: $453.5
Total: $453.5
Administration
Public Defender Agency
Public Defense Support
The Agency experienced a reduction in Criminal Rule 39
fee revenue in FY2017, and this is projected to
continue into FY2018 and FY2019. An increase of $453.5
general funds is necessary to replace the reduced
program receipt revenue and to maintain staffing
levels
Line 3
UGF: $10,447.6
Total: $10,477.6
Corrections
Institution Director's Office
Add Authority to Meet Operational Needs Within
Institutions Based on current projections and the
offender population trend, it is anticipated that DOC
will need a supplemental for FY2018 of $10,447.6 to
meet institutional shortfalls.
Line 4
UGF: $10,341.5
Total: $10, 341.5
Corrections
Physical Health Care
Increased Costs for Nursing Shortages, Medical Fees,
Chronic Disease, and Pharmaceuticals
The Department of Corrections (DOC) is obligated to
deliver essential medical care to incarcerated
offenders under AS 33.30.011(4). This supplemental is
needed to meet the increased inmate health care costs
that include fees-for-service, increased
pharmaceutical costs, increased contractual
obligations and physical health care staff cost
overages due to overtime for medical coverage
Mr. Steininger highlighted Lines 5 through 7:
Line 5
DGF: $400.0
Total: $400.0
Education and Early Development
Mt. Edgecumbe Boarding School
Operating and Maintenance of the Mt. Edgecumbe High
School Aquatic Center (FY18- FY19)
An appropriation to support the operations and
maintenance costs of the Mt. Edgecumbe High School
Aquatic Center from its opening in FY2018 through
FY2019.
Line 6
Total: 0
Education and Early Development
Executive Administration
Extend Every Student Succeeds Act Support Funding
Sec20 Ch2 4SSLA2016 P36 L21 (SB138) (FY17- FY19)
Extend Every Student Succeeds Act Support Funding
(ESSA) Sec20 Ch2 4SSLA2016 P36 L21 (SB138) (FY17-FY18)
into FY19. The Department of Education and Early
Development is still awaiting ESSA revisions from the
Federal government and is still in the implementation
phase. This extension will allow the department to
complete the implementation of ESSA.
Line 7
UGF: $92,986.0
Total: $92,986.0
Health and Social Services
Health Care Medical Services
Medicaid FY18 Projections
While a continued decrease in the percentage of state
general fund spending for the average medical
assistance recipient is reported between FY2016 and
FY2017, the enrollment for non-Medicaid expansion
continues to increase into FY2018. The projected
general fund expenditures for FY2018 is $664,233.9 and
after excluding the request for CHIP, a state general
fund shortfall of $92,986.0 is expected.
9:39:28 AM
Mr. Steininger looked at Line 8. He stated that when the
budget was crafted the Children's Health Insurance Program
(CHIP) had not yet been reauthorized by the federal
government, the item had been included to endure adequate
funding for the program. He revealed that the program had
been reauthorized by the federal government.
9:39:56 AM
Mr. Steininger highlighted Line 9:
Line 9
Total: 0
Health and Social Services
Healthcare Medical Services
Medicaid Federal Receipt Collections
Though the department is confident that the amount of
federal authority in FY2017 adequately reflects
federal revenues, unanticipated changes may provide
for opportunities to leverage additional federal
receipt authority.
9:40:10 AM
Mr. Steininger discussed Line 10:
Line 10
UGF: $18,000.0
Total: $18,000.0
Health and Social Services
HB Treatment and Recovery Grants
Substance Use Disorder Grants (FY18-21)
This four-year grant program is a response to a clear
and urgent need to expand substance use disorder (SUD)
services by addressing gaps in the continuum of care
identified by local communities. Access to treatment
will improve public safety as well as help parents to
unify with their children more effectively.
9:40:33 AM
Co-Chair Hoffman asked Mr. Steininger to speak to the need
for the multi-year appropriation.
Mr. Steininger responded that the multi-year appropriation
ran from FY 18 to FY 21 and would allow for time for the
actual providers to build capacity for services. He stated
that the build up for capacity would take more than one
fiscal year.
9:41:11 AM
Senator von Imhof wondered whether the line item was
related to new regulations pertaining to autism.
Mr. Steininger replied that the funding would not be
associated with autism but would be targeted toward
substance use disorders. He added that the funds would help
to address the opioid epidemic.
9:41:39 AM
Senator von Imhof understood that the $18 million would be
distributed over the course of 4 years.
Mr. Steininger replied in the affirmative.
9:42:03 AM
Senator von Imhof wondered why the funds needed to be
funded up front, rather than requesting $4.5 million each
year, over the next 4 years.
Mr. Steininger responded that having the $18 million up
front, and guaranteeing the funding over 4 years, provided
certainty to providers who would be building up the
capacity for services.
9:42:24 AM
Senator von Imhof surmised that there was flexibility in
the number. She stated that she understood the need for
providers to have assurances of funding.
9:42:51 AM
Senator Micciche felt that the request was unusual because
supplemental requests had typically covered past spending.
He noted that the line item bridged the past, four years
into the future.
Ms. Pitney replied that the choice to add the line item had
been a conscious one, the item had added in an effort to
expedite the grant process. She stressed that the item was
linked to public safety and was meant to help address the
state's lack of substance abuse treatment programs.
9:44:29 AM
Co-Chair Hoffman asked whether the distribution amount per
community had been identified.
Ms. Pitney agreed to provide that information from
Department of Health and Social Services (DHSS).
9:45:16 AM
Mr. Steininger highlighted Lines 11 and 12:
Line 11
UGF: $322.0
Total: $322.0
Special Appropriations
Judgements, Claims & Settlements
DEC Wage and Hour Settlement
Wage and hour settlement as a result of a June 2017
arbitration
Line 12
Total: 0
Special Appropriations
Judgements, Claims & Settlements
Judgements and Settlements
Judgements and settlements against the state for the
fiscal year ending June 30, 2018, but not included in
sec 16(a).
9:45:33 AM
Mr. Steininger addressed Line 13:
Line 13
UGF: $94.1
Total: $94.1
Military and Veterans Affairs
Office of the Commissioner
Add Special Assistant (09-#011) to Preserve and
Protect Department of Defense Investment in Alaska
Add one full-time Special Assistant to the
Commissioner (PCN: 09-#011) in the Office of the
Commissioner. This position is part of a coherent
engagement strategy with Department of Defense (DOD)
and other key stakeholders (federal military senior
officials, Congressional Delegation, local base
retention groups, and members of the public) to
preserve, protect, and potentially grow DOD investment
in the State of Alaska.
9:45:51 AM
Senator von Imhof asked whether this position should have
existed all along to advocate for military investment in
Alaska.
Ms. Pitney replied that the because of budget reductions
the position had been eliminated. She said that the
administration believed that the position was critical and
needed to be reinstated.
9:47:13 AM
Senator von Imhof commented that current employees should
already be working on the issue.
9:47:55 AM
Vice-Chair Bishop requested more detail on the Line 11
item.
9:48:04 AM
Co-Chair MacKinnon addressed Line 11 and noted that Alaska
had suffered from not having arbitration guidelines. She
wondered whether the administration would be introducing
legislation that provided guidelines for arbitration.
Ms. Pitney agreed to provide that information.
9:48:32 AM
Co-Chair MacKinnon felt that the Department of
Administration would need to advance an arbitration policy.
She noted that state finances scrutinized by arbitrators
included the permanent fund earnings reserve account, which
had not been used for funding before, but was continually
used in arbitration against the state. She felt guidelines
that precluded the earnings reserve would result in the
state winning more arbitration cases.
Co-Chair MacKinnon pointed to Line 13, she asked why the
item was supplemental, rather than in the Operating Budget.
Ms. Pitney replied that the administration felt that the
position was important enough to request as a supplemental
item.
9:50:00 AM
Co-Chair MacKinnon questioned the level of risk of lack
military investment during a time when the federal
government was increasing military presence in the state.
She wondered whether the request was necessary now, given
the economic crisis facing the state.
9:50:51 AM
Senator Micciche spoke of the process and his role as chair
of the budget subcommittee for the Department of Military
and Veteran's Affairs. He was disappointed with the
addition of the position in the supplemental budget.
Co-Chair Hoffman wondered whether the position was
currently filled.
Ms. Pitney believed that it was but wanted to double check.
9:52:17 AM
Co-Chair Hoffman strongly suggested that the administration
should not fill positions that were requested in as
supplemental until the supplemental was approved. He felt
that filling the positions ahead of procuring funding
usurped the voice of the legislature in the matter.
9:53:03 AM
Vice-Chair Bishop commented that military spending on the
federal level had been increased by approximately $500
million very recently.
9:53:41 AM
Co-Chair MacKinnon expressed frustration that supplemental
requests from the administration were "out of control" and
that the desires of the legislature were being ignored.
9:55:03 AM
Mr. Steininger addressed Line 14:
Line 14
UGF: $221.0
Federal Receipts: $663.0
Total: $884.0
Military and Veteran's Affairs
Air Guard Facilities Maintenance
Increase Federal Authority and GF Match Associated
with C-17 Acquisition
Increased federal receipt authority and General Fund
matching funds for facilities operations/maintenance
for three buildings supporting C-17 operations. Five
full-time positions were created in Air Guard
Facilities Maintenance to operate and maintain
facilities gained to support the C-17 aircraft.
9:55:34 AM
Mr. Steininger highlighted Line 15:
Line 15
UGF: $350.0
Total: $350.0
Special Appropriations
Klutina Lake Road Survey
Klutina Lake Road Survey (FY18-FY20)
In an effort to ensure that the State is able to
provide for the public's ability to continue using the
road to access outdoor activities while respecting
Ahtna's concerns surrounding potential impacts to
private property rights, and land and resource
management, survey activities will be performed by the
Department.
9:55:50 AM
Co-Chair MacKinnon recalled that the state attorney general
had negotiated a settlement surrounding the road access
that had been rejected by the corporation. She wondered if
the funds were related to the settlement.
Ms. Pitney responded that the funds were related to the
overall area, and were not directly related to the
settlement, but would be helpful for eventual resolution of
the settlement.
9:56:52 AM
Co-Chair MacKinnon asked whether the survey benefitted the
state or the corporation.
Ms. Pitney replied that the survey would clarify the legal
descriptions surrounding land use in the area.
9:57:42 AM
Co-Chair Hoffman wondered whether there was an existing
dispute between the corporation and the state about the
width of the right-of-way on the property. He believed that
the dispute was not about access - but the size of the
access.
Ms. Pitney answered that she would need to get specifics
from the Department of Law.
9:58:35 AM
Mr. Steininger looked at Line 16:
Line 16
DGF: $30,000.0
Total: $30,000.0
Fund Capitalization
Community Assistance Fund
FY2018 Deposit from the Power Cost Equalization Fund
In FY2017, the Power Cost Equalization Fund earned
$112,330,514. After following the formula in AS
42.45.085(d), $55,464,300 is available for
appropriation to the Community Assistance Fund and
rural energy programs. $30,000,000 will be deposited
in the community assistance fund per AS
42.45.085(d)(2)(A).
9:58:50 AM
Mr. Steininger addressed Line 17:
Line 17
Total: 0
Fund Capitalization
AK LNG Fund
Deposit Investments into Alaska Liquefied Natural Gas
Fund AGDC expects to receive investments from outside
parties as it continues to develop the Alaska LNG
project. Investment funding will support the project
as it contracts with engineering, procurement, and
construction (EPC) firms to conduct frontend
engineering and design and lump-sum turn-key estimates
prior to a final investment decision in calendar year
2019.
9:59:06 AM
Senator von Imhof looked at Line 17 and noted that there
was not a current fiscal note associated with the request.
She wondered whether granting the request was "blanket
permission" to allow Alaska Gasline Development Corporation
(AGDC) to accept any investment money that arrived during
the next fiscal year. She asked whether the legislature
would be able to review the money coming in and probed the
need for the particular line item.
Ms. Pitney responded that SB 138, which established AGDC's
rules of operation and corporate status, established a
board to oversee corporation, and established the powers of
both. She shared that the budget authority would allow AGDC
to accept investments from third parties for the
development of the gasline. She reiterated that the
boundaries of the corporation's powers were written in
statue and that approval of investment was through the AGDC
board. She said that if every third party who invested in
the gasline had to be vetted through the legislative
process it would be difficult for investors to feel secure
about moving a project forward.
10:01:54 AM
Senator von Imhof worried that passage of the line item
would remove a layer of legislative oversight.
10:02:53 AM
Mr. Steininger highlighted Lines 18 and 19:
Line 18
Other Amount: $12,000.0
Total: $12,000.0
Fund Capitalization
AK LNG Fund
Transfer from In-State Natural Gas Pipeline Fund
At the conclusion of FY2018 it will no longer be
necessary to have two separate funds: 1229 Alaska
Gasline Development Corporation Instate Pipeline
(AGDC-ISP) and 1235 Alaska Gasline Development
Corporation Liquefied Natural Gas (AGDC-LNG). Moving
the balance of fund 1229 AGDC-ISP into fund 1235 AGDC-
LNG will streamline AGDC's administrative and budget
processes and match the Governor's direction.
Line 19
Other Funds: ($12,000.0)
Total: ($12,000.0)
Fund Capitalization
In-State Pipeline Fund
Transfer to Liquefied Natural Gas Project Fund
At the conclusion of FY2018 it will no longer be
necessary to have two separate funds: 1229 Alaska
Gasline Development Corporation Instate Pipeline
(AGDC-ISP) and 1235 Alaska Gasline Development
Corporation Liquefied Natural Gas (AGDC-LNG). Moving
the balance of fund 1229 AGDC-ISP into fund 1235 AGDC-
LNG will streamline AGDC's administrative and budget
processes and match the Governor's direction.
10:03:15 AM
Mr. Steininger discussed Line 20:
Line 20
DGF: $14,000.0
Total: $14,000.0
Fund Transfers
Renewable Energy Grant Fund
FY2018 Deposit from the Power Cost Equalization Fund
In FY2017, the Power Cost Equalization Fund earned
$112,330,514. After following the formula in AS
42.45.085(d), $55,464,300 is available for
appropriation to the Community Assistance Fund and
rural energy programs. $14,000,000 will be deposited
in the Renewable energy Grant Fund per AS
42.45.085(d)(2)(B). Additional funding will be
allocated to projects in the Capital Budget.
10:03:26 AM
Mr. Steininger addressed Line 21:
Line 21
UGF: $23,918.2
Total: $23,918.2
Fund Transfers
Marine Highway System Fundighway
FY2018 Deposit from the General Fund
Of the $30 million appropriated from the general fund
to the Alaska Marine Highway System fund for FY2018,
only $6,081,800 was available to transfer due to the
associated contingent language. This appropriation
back-fills the short fall.
10:03:38 AM
Co-Chair MacKinnon remarked that she had worked on Alaska's
Renewable Energy Advisory Team. She looked to the
relationship between Line 16 and Line 20. She noted that
the administration was spending $44 million of the $55
million available, she wondered whether the addition $11
million had been used elsewhere in the budget.
Mr. Steininger replied in the affirmative. He relayed that
the funds had been used in the Capital Budget.
10:04:50 AM
Mr. Steininger readdressed Line 21.
10:04:58 AM
Mr. Steininger highlighted Line 24:
Line 24
Other Amount: $8,125.0
Total: $8,125.0
Commerce
Capital
Alaska Energy Authority - Volkswagen Settlement
The Environmental Mitigation Trust established as part
of the Volkswagen (VW) Settlement is explicitly
intended for funding Eligible Mitigation Actions
(Appendix D-2 of Environmental Mitigation Trust
Agreement) to fully mitigate the total, lifetime
excess NOx emissions from the 2.0L and 3.0L subject
vehicles. Alaska has been allocated $8.125 million to
fund eligible actions over the next ten years. The
consent decree requires the development of a
Beneficiary Mitigation Plan (Plan) that summarizes how
the funds will be used to provide the public with
insight into the State's high-level vision for use of
the mitigation funds and information about the
specific uses for funding.
10:05:17 AM
Mr. Steininger discussed Line 25:
Line 25
UGF: $6,000.0
Total: $6,000.0
Transportation
Capital
Alaska Marine Highway System Vessel Overhaul, Annual
Certification and Shoreside Facilities Rehabilitation
The Alaska Marine Highway System (AMHS) requires
annual maintenance and overhaul on vessels and at
terminals, particularly components or systems whose
failures impact service in the short term. Annual
overhaul of vessels is necessary to pass United States
Coast Guard (USGS) inspections and obtain a
Certificate of Inspection (COI) necessary to operate
in revenue service. Expenses for annual maintenance
exceeded annual budgeted amounts in FY2017 and
projected for FY2018. This supplemental allows the
AMHS to accomplished required maintenance without
impacting route service.
10:05:35 AM
Co-Chair Hoffman understood that Line 25 contained the only
Capital Budget appropriation request.
Ms. Pitney clarified that it was the UGF Capital Budget
request.
10:05:54 AM
Mr. Steininger discussed Line 28:
Line 28
Total: 0
Environmental Conservation
Capital
Reapprop for Municipal Matching Grants Project
Administration - NTE $200,000
The Department of Environmental Conservation
anticipates completed Municipal Matching Grants
projects to lapse roughly $440,000 at the end of
FY2018. Department costs to administer these projects
is unpredictable and can exceed the amount available
in the appropriations for administrative costs. When
that happens, these costs must shift to the operating
budget which has been significantly reduced in recent
years. This reappropriation ensures sufficient funds
are available to administer the remaining Municipal
Matching Grant appropriations.
10:06:20 AM
Mr. Steininger highlighted Line 29:
Line 29
Total: 0
Transportation
Capital
Reapprop for Adak Airport Maintenance and Operations -
Est $742,604
In 2003, the Department of the Navy transferred
ownership of the Adak airport to the State. The state
was given a $10.0 million for operating the airport
with the understanding that no additional funds would
be provided. The original $10.0 million is now
exhausted and must be replaced by another funding
source. This project, along with a corresponding
FY2019 capital appropriation, will provide gap funding
while the department engages with stakeholders to
develop a strategic action plan for funding the
airport in the future.
10:06:49 AM
Mr. Steininger addressed Line 30:
Line 30
Total: 0
Transportation
Capital
Reapprop for the Commuter Rail Concept - Est
$4,541,537
The unexpended and unobligated balances of the
appropriations made in sec. 10, ch. 29, SLA 2008, page
76, lines 25 - 26, as amended by sec. 16(b), ch. 38,
SLA 2015 (Department of Transportation and Public
Facilities, Glenn Highway rut repairs - $11,500,000)
and sec. 1, ch. 18, SLA 2014, page 63, line 4, and
allocated on page 63, lines 12 - 13, as amended by
secs. 14(d) and 27(g) and (h), ch. 1, TSSLA 2017
(Department of Transportation and Public Facilities,
economic development, Knik Arm Bridge project
development), estimated to be a total of $4,541,537,
are reappropriated to the Department of Transportation
and Public Facilities for the commuter rail concept.
10:07:04 AM
Senator von Imhof asked whether there had been previous
studies on the commuter rail concept.
Ms. Pitney responded that there were multiple studies, and
the governor had established a task force to review the
reports.
10:08:04 AM
Senator von Imhof surmised that much of the engineering
groundwork had been completed if previous studies had been
done. She wondered what the funds would be spent on.
Ms. Pitney replied that the plan was to have the funds
support the rail extension and operations.
10:08:55 AM
Senator von Imhof understood that the item could
potentially be in the Capital Budget to support the
building of rails and spurs and train operation.
Ms. Pitney replied in the affirmative.
10:09:25 AM
Co-Chair MacKinnon looked at Line 30, she asked how many at
grade crossings needed to be changed.
Ms. Pitney responded that the intent was to use the primary
existing rail between Anchorage and Wasilla. She reiterated
that the project was a Capital Budget project.
10:10:16 AM
Co-Chair MacKinnon asked whether the administration had
reviewed the past studies on the rail link.
Ms. Pitney said that she had not. She clarified that
employees of the Department of Transportation and Public
Works had reviewed the studies and would be working with
the task force
10:10:39 AM
Co-Chair MacKinnon knew that the idea was popular. She
revealed that the rider fee of $10 each direction had not
been favored by the public. She opined that the proposal
would put a commuter rail on a track that carried gravel.
She wondered whether an analysis had been done on the
displacement of payloads with passengers. She recognized
that the idea was popular but worried that the cost to the
commuter would be high, while other freight that would be
more beneficial to the railroad be profitable would be
displaced.
10:13:03 AM
Senator von Imhof wondered whether it would make sense to
present the committee with the project after the
feasibility was updated to address Co-Chair MacKinnon's
concerns.
Ms. Pitney stated that the task force and the DOT staff
would be happy to have the discussion with the legislature
soon.
10:14:38 AM
Mr. Steininger highlighted Line 34:
Line 34
DGF: $103.4
Total: $103.4
Commerce, Community, and Economic Development
Banking Securities
Financial Examiner I/II for Alaska Native Claims
Settlement Act Filings and Support
The division must timely process ANCSA corporate
filings and respond to complaints within 10 business
days. Without this position, the division would be
forced to reduce resources tasked with examinations
and enforcement activities for other programs.
10:15:12 AM
Co-Chair Hoffman asked whether the programs and the program
receipts had been vetted by the ANCSA corporations.
Mr. Steininger responded that the corporations had seen an
increase in collections because of an increase in filings
and in complaints.
Co-Chair Hoffman thought that the issue warranted further
discussion off of the record.
10:16:00 AM
Co-Chair MacKinnon asked whether it was typical to see so
many positions being added in a supplemental budget.
Co-Chair Hoffman replied that, to his knowledge, no.
10:16:15 AM
Mr. Steininger discussed Lines 35 through 37:
Line 35
DGF: $35.0
Total: $35.0
Environmental Conservation
Solid Waste Management
Increase Program Receipt Authority
The Solid Waste Management program conducted a fee
study in FY2017. Revised fee regulations have gone
through public notice, review, and comment, and were
enacted effective October 27, 2017. The Department
anticipates revenue from the new fees will exceed
general fund program receipt authority in FY2018.
Line 36
DGF: ($35.0)
Total: ($35.0)
Environmental Conservation
Air Quality
Decrease Program Receipt Authority
The Division of Air Quality expects to under collect
general fund program receipt authority in FY2018 due
to fluctuations in the amount of Title I permit work
from year to year.
Line 37
Federal Amount: $6,500.0
Total: $6,500.0
Health and Social Services
Front Line Social Workers
Public Assistance Cost Allocation Plan Amendment
A recent amendment to the section of the Public
Assistance Cost Allocation Plan (PACAP) covering the
Office of Children's Services changes the allocation
methodology for the Front Line Social Workers
component, the largest personal services component
within the Office of Children's Services budget. The
estimated increase is associated primarily with the
claiming for the Title IV-E foster care, adoption, and
guardianship programs.
10:17:14 AM
Co-Chair Hoffman noted that time was running short and
requested that members submit further questions to the
administration in writing.
10:17:37 AM
Mr. Steininger highlighted Line 38:
Line 38
UGF: $1,000.0
Total: $1,000.0
Health and Social Services
Foster Care Base Rate
Decline in Child Support Payment Collections
The Office of Children's Services expects significant
reductions in collections of child support and social
security payments.
10:18:05 AM
Mr. Steininger addressed Line 39:
Line 39
UGF: $2,895.7
Total: $2,895.7
Health and Social Services
Foster Care Special Need
FY2017 Special Need Payments Made in FY2018
At the close of FY2017 the Office of Children's
Services pushed payments for FY2017 obligations into
FY2018 in the amount of $2,895.7.
Mr. Steininger looked at Line 40:
Line 40
UGF: $2,000.0
Total: $2,000.0
Health and Social Services
Alaska Temporary Assistance Program
Temporary Assistance for Needy Families Maintenance of
Effort
The maintenance of effort (MOE) for the Temporary
Assistance for Needy Families (TANF) program, mandated
by the Federal Government, is primarily met by the
expenditures within ATAP. The state received
notification of penalty for failure to meet the MOE
obligation for federal fiscal year 2017.
10:19:13 AM
Mr. Steininger highlighted Line 41:
Line 41
Other Amount: $5,000.0
Total: $5,000.0
Revenue
APFC Investment Management Fees
Investment and Custody Fees
Unanticipated market performance or manager changes
could cause the actual amount of fees paid to exceed
projections. As a prudent course of action, $5,000.0
supplemental authority for the Investment Management
Fee allocation will ensure that APFC has sufficient
funds to meet our contractual obligations.
10:19:32 AM
Mr. Steininger discussed Line 44:
Line 44
DGF: ($25,000.0)
Total: ($25,000.0)
Special Appropriation
Comprehensive Insurance Program
Payment from Premera to the Reinsurance Program
Adjustment to the state contribution to the calendar
year 2017 reinsurance program to reflect reimbursement
from Premera Blue Cross Blue Shield.
10:19:53 AM
Mr. Steininger looked at Line 45:
Line 45
UGF: $2,000.0
Total: $2,000.0
Fund Capitalization
Disaster Relief Fund
Disaster Relief Funding
This increase is needed due to the low balance of the
disaster relief fund and the estimated amount needed
for spring 2018 disasters. Sufficient general fund
authority of $2,000,000 currently exists in the FY2019
budget.
10:20:13 AM
Mr. Steininger addressed Line 46:
Line 46
Total: 0
Salary and Benefit Adjustments
University of Alaska Bargaining Unit Agreements
The Fairbanks Firefighters Union, IAFF Local 1324 and
the United Academics - American Association of
University Professors, American Federation of Teachers
both negotiated contracts effective in FY2018. These
contracts did not have monetary terms requiring
supplemental appropriation.
Lines 47 through 49 listed the Funding Summary Jan 29
Operating Language Section, Total of Jan 29 Supplemental
requests, and Grand Total of Supplemental Requests
($217,835.0).
10:21:17 AM
Mr. Steininger addressed Line 51 through 57, which listed
January 29, 2018 ratifications in whole dollars:
Line 51
UGF: $467,693.27
Total: $467,693.27
Health and Social Services
Pioneer Homes
FY2016, AR H001 Alaska Pioneer Homes
Line 52
UGF: $1,350,310.26
Total: $1,350,310.26
Health and Social Services
Public Health
FY2016, AR H007 Public Health
Line 53
UGF: $8,715,670.72
Total: $8,715,670.72
Health and Social Services
Medicaid Services
FY2016, AR H012 Medicaid Services
Line 54
UGF: $8,824.49
Total: $8,824.49
Health and Social Services
Capital
FY2010, AR H264 Mental Health Housing
Line 55
UGF: $7,355.06
Total: $7,355.06
Health and Social Services
Capital
FY2011, AR H260 Mental Health Home Modification and
Upgrades to Retain Housing
10:22:02 AM
Mr. Steininger discussed Line 56:
Line 56
UGF: $300,310.83
Total: $300,310.83
Health and Social Services
Capital
FY2016, AR HUBC Unbudgeted Capital RSA's
10:22:14 AM
Mr. Steininger looked at Line 57:
Line 57
UGF: $4,304,930.00
Total: $4,304,930.00
Public Safety
Bureau of Highway Patrol
AR 47863-13 Bureau of Highway Patrol Special Project
10:22:37 AM
Co-Chair Hoffman queried the meaning of the ratifications,
and the legislative process for approving the
ratifications.
Mr. Steininger replied that ratifications were shortfalls
in the restrictions of the budget. The figures reflected
reimbursements that departments had expected from the
federal government in FY 16, which were either disallowed
or reimbursed at a lower rate than expected.
10:24:24 AM
Ms. Pitney furthered that, from an audit perspective, the
ratification was the process used to clean up audit
findings. She noted that the Bureau of Highway Patrol
ratification was an issue that stemmed from 2011. She said
that there had been attempts by the legislature to address
the issue in 2013, but it remained an audit finding and now
required the ratification.
10:25:22 AM
Co-Chair Hoffman queried additional detail to Line 44.
Mr. Steininger replied that at the end of calendar year
2017, Premera Blue Cross Blue Shield had provided $25
million to the Alaska Comprehensive Health Insurance
Association for paying claims on the reinsurance program.
He said that the $25 million reduced the obligation of
state funds needed to cover the program for calendar year
2017, which resulted in the $25 million reduction reflected
on Line 44.
10:26:39 AM
Co-Chair Hoffman discussed housekeeping.
SB 168 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:27:12 AM
The meeting was adjourned at 10:27 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020918 FY2018 Supplemental Summary and Detail.pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 168 |
| SB 168 FY2018 Supplemental Summary.pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 168 |
| SB 168 FY2018 Supplemental Backup.pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 168 |
| SB 144 D operating budget.pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 144 |
| SB 144 Summary of Changes from the Gov to CSSB 144(FIN).pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 144 |
| SB 144 ver A to D from Leg Legal 1 30 18 CS Zero.pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 144 |
| SB 143 work draft version D.pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 143 |
| SB 143 Summary of Changes from the Gov to CSSB143(FIN).pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 143 |
| SB 143 ver A to D from Leg Legal 1 30 18 CS Zero.pdf |
SFIN 2/9/2018 9:00:00 AM |
SB 143 |