Legislature(2021 - 2022)SENATE FINANCE 532
02/10/2021 09:00 AM Senate FINANCE
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| Audio | Topic |
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| Start | |
| Cares Act Funding Update (continued) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 10, 2021
9:01 a.m.
9:01:28 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Donny Olson
Senator Natasha von Imhof
Senator Bill Wielechowski
MEMBERS ABSENT
Senator David Wilson
ALSO PRESENT
Neil Steininger, Director, Office of Management and Budget,
Office of the Governor; Paloma Harbour, Fiscal Management
Practices Analyst, Office of Management and Budget, Office
of the Governor.
PRESENT VIA TELECONFERENCE
Lacey Sanders, Administrative Services Director, Department
of Education and Early Development, Office of Management
and Budget, Office of the Governor; Rob Carpenter, Deputy
Commissioner, Department of Transportation and Public
Facilities, Juneau; John Binder, Deputy Commissioner,
Department of Transportation and Public Facilities, Juneau.
Co-Chair Stedman reviewed the agenda for the meeting. The
committee would continue the presentation from the previous
day regarding Coronavirus Aid, Relief, and Economic
Security (CARES) Act funding. He invited the Office of
Management and Budget (OMB) director to the table.
^CARES ACT FUNDING UPDATE (CONTINUED)
9:02:46 AM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, continued to address the
presentation "Senate Finance COVID-19 funding Overview"
from the previous day (copy on file). He corrected some
items on slide 8 which related to the Unemployment
Insurance (UI) Trust. The projected balance listed at the
bottom of $441.7 million was inclusive of federal funds
that passed through the trust for federal benefits. After
the prior days presentation had a conversation with the
economist at the Department of Labor and Workforce
Development (DOL) who explained that a more accurate and
pertinent number to use was $294 million. He indicated that
Director DeBartolo and Lennon Weller, economist, from DOL
were online and available for questions regarding the
balances.
Senator von Imhof asked whether the new number was
sufficient. She wondered if the number was too low and
needed to be recapitalized. She asked for the liquidity of
the number.
Mr. Steininger replied that the number was still within the
range of sufficiency. The number was considered healthy
even though it was not at the high end of the range.
Mr. Steininger recalled a question from Senator Olson about
the amount of money available through the CARES Act for
tribal entities. He received clarification that the money
had not been reallocated to other entities. The funds were
still held by the federal government.
Senator Olson wondered whether there was an amount that had
not been distributed. He asked what portion had not been
distributed. He recalled a figure of $525,000.
9:05:12 AM
PALOMA HARBOUR, FISCAL MANAGEMENT PRACTICES ANALYST, OFFICE
OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, replied
that $533 million was set aside pending litigation.
Mr. Steininger reported that slides 9 and 10 went through
funding available for education through the CARES Act and
Coronavirus Response and Relief Supplemental Appropriations
Act (CRRSAA). Slide 9 reflected funding through the CARES
Act, most of which was received in the prior summer:
Higher Education Emergency Relief Funds
? University of Alaska (UA) $7.9 million
Students $3.9 million
? Alaska Vocational Technical Center (AVTEC)
$71.4 thousand Students $35.6 thousand
? Minority Serving Institution Funds to UA $2.6
million
? Elementary and Secondary School Emergency Relief
(ESSER) $38.4 million
? Local Education Agencies $34.6 million
? State Education Agency $3.8 million max for
administration $192 thousand
? Governor's Emergency Education Relief (GEER) $6.5
million? Grants to School Districts (35) $3.7 million
? University of Alaska $1.5 million
? Competitive Grant Awards to Education-related
Entities $1.03 million
? Alaska Native Science and Engineering Program
200 thousand
Mr. Steininger reported that most of the funding had been
distributed. He noted that half of the $7.9 million for the
University of Alaska was reserved for students. The Alaska
Vocational and Education Center received $71,400 of which
half went to students as well. The University of Alaska
also received an additional $2.6 million for the Minority
Serving Institution Funds. He continued that the Department
of Education and Early Development (DEED) received several
different grants directed to a variety of entities but
flowed through DEED. The largest of the grants was the
Elementary and Secondary School Emergency Relief (ESSER)
fund in the amount of $38.4 million of which $34.6 million
was specifically directed to local education agencies
(primarily school districts). He indicated that $3.8
million was to be used by the state education agency which
would be DEED. The maximum amount allowable to be used for
administrative purposes was $192,000. The money was
primarily used to assist in the delivery of education.
Mr. Steininger explained that the Governor's Emergency
Education Relief (GEER) fund was more open-ended in the way
it could be used for educational relief. However, there was
more discretion in how the funds were distributed. He
conveyed that $3.7 million of the $6.5 million were sent
out as grants to school districts. The University of Alaska
received $1.5 million. The state issued some competitive
grants for education-related entities in the approximate
amount of $1 million, and the Alaska Native Science and
Engineering Program received $200,000.
Senator von Imhof wondered if any money would be given for
broadband or other data communication. She asked if it was
a big need, in Mr. Steininger's opinion.
Mr. Steininger replied that there was broadband-related
relief in CRRSAA funding. He could not speak to whether the
funds were dispersed as pass-through funding via the state
or if grants were awarded directly to broadband providers.
He deferred to Ms. Sanders with DEED who could respond with
detail and was available online.
Co-Chair Stedman asked Ms. Sanders to comment.
9:09:30 AM
LACEY SANDERS, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, OFFICE OF MANAGEMENT
AND BUDGET, OFFICE OF THE GOVERNOR (via teleconference),
wanted to address Senator von Imhof's question about
broadband. The money Mr. Steininger was speaking to in the
CRRSAA bill was funding that would go directly to
providers. It did not flow through DEED. However, the money
that school districts were receiving through both the CARES
Act and CRRSAA was available to be used for things like
broadband infrastructure or devices - technology that
provided connectivity.
Senator von Imhof asked how much money went directly to
providers for broadband.
Ms. Sanders did not know the information. She could
research the issue. She noted that because the funding did
not come to DEED, she did not have specific information.
There was an earlier comment made about broadband. There
was broadband through a bill that was passed in the prior
year expanding broadband access. It was referred to as the
BAG (Broadband Access Grants) Program through the Library,
Archives, and Museums. They had done extensive work over
the previous year to ensure school districts had available
grant funding to also address the issue of connectivity.
The department could follow-up with additional information
provided in CRRSAA.
Co-Chair Stedman would appreciate the information. It would
be helpful for the committee when it looked at funding and
capital projects. It was a significant issue.
Ms. Sanders continued that the second part of Senator
von Imhof's question related to the $3.7 million awarded to
school districts from the GEER funding.
Co-Chair Stedman agreed.
Ms. Sanders explained that there were several school
districts that were ineligible for the Title 1(a)
distribution in the original allocation under the CARES
Act. Additionally, the governor was reviewing the amount of
money that would be necessary to provide school districts
with the minimum of their allocation under the $30 million
of additional funding that was removed from the budget. The
governor chose to allocate $3.7 million to school districts
to ensure that they received funding to address Covid
needs.
Co-Chair Bishop wondered when each of the listed funding
was received by the state. Dates would make things easier
to track. It would also be helpful to know which funds were
approved by the Legislative Budget and Audit Committee.
Co-Chair Stedman asked for the department to help provide
clarity on the issue.
Mr. Steininger replied that the ESSER and GEER funds were
approved through the Legislative Budget and Audit Committee
in the prior summer. Everything listed on the slide came in
through the original CARES Act in early spring of the prior
year. The distribution of funds to districts took time to
understand the rules and further approve them following the
approval of the Legislative Budget and Audit Committee.
Co-Chair Bishop wanted to relay the timeline.
9:14:48 AM
Senator Wielechowski asked if the funding going to the
school districts was predicated on the base student
allocation (BSA) formula.
Mr. Steininger replied that the $34.6 million for local
education entities was distributed per federal title
formulas. Director Sanders could provide additional
details. He noted that $3.7 million was distributed to fill
the gaps of districts ineligible for the $34.6 million to
ensure that they received sufficient relief.
Senator Wielechowski asked for a list of the education
related entities that received $1.03 million.
Mr. Steininger deferred to Ms. Sanders.
Ms. Sanders replied that the GEER funding was awarded
through a federal grant process. The department had a list
of entities that she could provide to the committee. She
could read the list or provide a written response to the
committee.
Senator Wielechowski asked how many entities were on the
list. If the list was short, he was interested in Ms.
Sanders reading it.
Ms. Sanders responded that there were approximately 15
entities. The list included the Igiugig Tribal Library,
Little Angel Childcare Academy, Star, Juneau Alaska Music
Matters, Sea Alaska Heritage Foundation, Rural Cap, Big
Brothers - Big Sisters of Alaska, Sea Stories, Anchorage
Public Library, Discovery Southeast, Childcare Connection,
SEARHC.
Co-Chair Stedman interrupted Ms. Sanders and asked her to
include the list and corresponding dollar amounts on a
slide for the following day's presentation addressing K-12
education.
Ms. Sanders responded in the affirmative.
Co-Chair Stedman also requested the inclusion of
information regarding the grants to school districts for
the following day's presentation.
Ms. Sanders responded positively.
Senator Wielechowski had inquiries from constituents about
the entities and dollar amounts. He wondered if the
information could be found online.
Ms. Sanders replied that DEED had an area on its website
that specifically focused on the funding the state received
in ESSER and GEER funding. All the details were available
on the department's website. She reiterated she could
provide documentation at the next meeting.
Senator Wielechowski asked if all the information could be
found in the state's checkbook posted online.
Mr. Steininger relayed that the information regarding
expenditures was reported monthly to the legislature. Not
all the information was posted on the state's website. As
individual departments made grants, they posted reports
about grant distributions.
9:19:32 AM
Senator Hoffman asked about the ESSER funds of $38.4
million. He wondered how the dollars had been distributed
to school districts and how they were being spent. He
wondered if most of the funds had already been expended. He
also asked Ms. Sanders to provide a report to the committee
regarding AVTEC funds for students and how the money was
spent.
Ms. Sanders responded that she would provide reports to the
committee. She noted that while the funding was awarded and
available to school districts, districts had an extended
period to spend the funds. For example, under the CARES
Act, they had until September 30, 2022. She indicated that
with CRRSAA, the funding was available until September 30,
2023. The money was available to school districts who had
an extended period to spend the monies.
Ms. Sanders continued that the CRRSAA money that was
recently appropriated by the federal government and
approved by the Legislative Budget and Audit Committee had
not yet been dispensed to school districts. The application
was being prepared. The department had to do some work in
the grants management system to have the application ready.
It should be ready shortly. The focus had been getting the
CARES Act money to school districts, as they requested the
funds to be reimbursed.
Mr. Steininger reviewed slide 10, "Education Relief Details
(CRRSAA)":
? Higher Education Emergency Relief II Funds
? University of Alaska (UA) $17.4 million
Students $3.9 million
? Alaska Vocational Technical Center (AVTEC) $252
thousand Students $35.7 thousand
? Minority Serving Institution Funds to UA to be
determined
? Elementary and Secondary School Emergency Relief
(ESSER) II $159.7 million
? Local Education Agencies $143.7 million
? State Education Agency $15.2 million max for
administration $789.6 thousand
? Governor's Emergency Education Relief (GEER) II
? Governor's Supplemental allocation $2.8 million
? Emergency Assistance for Non-Public Schools
allocation $5.4 million max for administration
$200 thousand
Mr. Steininger indicated the slide was similar to the
previous slide but showed the funding levels for programs
through the most recent federal relief bill, CRRSAA, from
late December. He reported that the Higher Education
Emergency Relief Funds were increased. The University of
Alaska received $17.4 million. One difference between
CRRSAA and CARES funding was that half of the money in the
CARES Act funding was shared directly to students through
the mandate of the CARES Act. He relayed that with CRRSAA
funding, most of it went to the institutions with
$3.9 million to be distributed to students. He reported
that AVTEC received $252,000 of which $35,700 was directed
to students. He brought up that in a previous presentation
he reported AVTEC had a supplemental need to replace lost
revenues. The request followed accounting for the pots of
funding. The Alaska Technical and Vocational Education
Center's loss of tuition was significantly in excess of
federal relief dollars.
Mr. Steininger continued that the University of Alaska
would also receive funding through the Minority Serving
Institution Funds. The amount was yet to be determined. He
reported that ESSER funding also increased by $159.7
million. School districts would receive an allocation of
$143.7 million. He relayed that DEED would receive about
$15.2 million. The funds were granted via a Legislative
Budget and Audit Committee meeting that occurred shortly
before the start of session to allow the department to
begin working with districts on the grants.
Mr. Steininger reported that state received additional
GEER II from the federal government in the amount of $2.8
million. There was also funding for emergency assistance
for non-public schools in the amount of $5.4 million of
which $200,000 could be used for the grant distribution
administrative costs.
9:25:10 AM
Senator Wielechowski requested a list of spending for the
$5.4 million allocation.
Co-Chair Stedman asked Ms. Sanders to provide a breakdown
of the slide being discussed [slide 10] in her presentation
for the following day. He thought it would be useful when
looking at the BSA. He thought the committee would discuss
student achievement as well.
Ms. Sanders commented that the $5.4 million was a new
allocation referred to as emergency assistance for
non-public schools. Non-public schools would have to apply
for the funding. She reported that because DEED did not
require non-public schools to submit their information, the
department would be positing an application and reaching
out to the non-public schools DEED was aware of based on
the department doing a diligent search through websites and
statewide databases. She offered to provide a list of
schools the department had already identified. She did not
know if they would apply. Therefore, she could not provide
the committee with an allocation of the $5.4 million. She
could only provide a list of schools.
Co-Chair Stedman asked Ms. Sanders to lay out the slide so
that it could be updated easily. He would like to be able
to look back to see how the funds were spent.
Senator Hoffman asked what was included in the category of
local education agencies. He wondered where school
districts fit in.
Ms. Sanders responded that local education agencies were
what the State of Alaska referred to as school districts.
The State Education Agency was the State Department of
Education.
Senator Hoffman suggested there were no other entities
under the agency category that received funds except for
the school districts.
Ms. Sanders concurred.
9:28:28 AM
Mr. Steininger spoke to slide 11, "Transportation Relief
Details":
? CARES Act
? Federal Aviation Administration $82.5 million
? Alaska International Airport System $33.1
million personal services and debt
? Rural Airport System $49.4 million
operating and maintenance, revenue
shortfalls?
? Federal Transit Administration $28.8 million
? Alaska Marine Highway System $10 million
operating assistance, COVID-19 mitigation
? Non-urbanized Areas - Transit $18.8
million rural and intercity operating
assistance
CRRSAA
? Federal Transit Administration $55.8 million
? Community Grants $77 thousand to
Fairbanks
? Rural Area Transit $55.7 million
operating and maintenance, revenue
shortfalls?
? Federal Highway Administration Surface
Transportation Funds $124.4 million
? Re-opening of Silvertip, Chitina and Birch
Lake Maintenance Stations $2.1 million
? Not allocated for a specific purpose
$122.3 million Urbanized Areas $11.3
million
Mr. Steininger indicated slide 11 addressed relief funds
received directly by the Department of Transportation and
Public Facilities (DOT) or other transportation-related
entities around the state. In the CARES Act there was
funding through the Federal Aviation Administration. He
reported that the State of Alaska received $82.5 million in
funding. The Alaska International Airport System received
$33.1 million which could be applied to several different
areas within the airport system. It was being utilized
primarily between the international airports in Anchorage
and Fairbanks.
Mr. Steininger continued that Alaska managed and owned
several airports throughout the state. The State of Alaska
received $49.4 million that could be spent on operations
and maintenance of the airports and could also cover
revenue shortfalls. However, the CARES Act had some
explicit restrictions about using the monies for revenue
replacement. There were some CARES Act monies that could be
used to replace revenue shortfalls in certain areas
creating some confusion. The Rural Airport System was one
of the areas. He highlighted that in the FY 22 budget the
Rural Airport System funding had a longer time horizon in
which it could be used. The state was using some of the
funds to cover ongoing maintenance costs at the rural
airports to lessen general fund needs but was a short-term
fix in offsetting costs in the system.
Mr. Steininger continued that there was also Federal
Transit Administration funding of $28 million. He reported
that $10 million went to the Alaska Marine Highway System
(AMHS) for operating assistance and Covid-19 mitigation.
There was also Non-urbanized Transit Funding in the amount
of $18.8 million for rural and inter-city operating
assistance.
Mr. Steininger moved to the CRRSAA funding. The state
received $55.8 million in Federal Transit Administration
grants. Fairbanks received $77,000 for community grants and
$55.7 went to rural area transit for operating and
maintenance costs and to supplement revenue shortfalls. The
Federal Highway Administration provided $124.4 million for
surface transportation funds. The administration introduced
a revised program legislative (RPL) before session to
utilize some of the funds to re-open a handful of
maintenance stations including Silvertip, Chitina, and
Birch Lake Maintenance Stations in the amount of
$2.1 million. The remainder of the funds, $122.3 million,
had not been specifically allocated but had to be used in
transportation areas.
Senator von Imhof suggested that some of the community
grants could technically go to a private company doing work
on roads or at airports.
Mr. Steininger reported that if there was a private company
contracted with DOT to do maintenance work, some of the
money might be used to pay contractors.
Senator von Imhof wanted to highlight that $5.8 billion of
CARES Act funding had come to the state and was distributed
in several areas. Much of it went to public entities as
well as private entities including individuals, private
businesses, and non-profits. There had been questions about
which agencies had received funding.
9:34:01 AM
Senator Hoffman pointed to the last bullet point on the
slide and the unallocated amount of $122.3 million. He
asked about the process for allocating those dollars from
the administration's viewpoint. He wondered what
involvement the legislature would have in the allocation
process.
Mr. Steininger replied that the allocation of the money
would come through appropriations of federal receipts to
DOT whether through the operating or capital budgets. The
governor would propose how the funds would be used through
budget amendments for consideration by the legislature.
Co-Chair Stedman asked if Mr. Steininger was referring to
the Statewide Transportation Improvement Program (STIP).
Mr. Steininger relayed that the Federal Highway
Administration funds could be used for capital projects
that would otherwise be in the STIP. However, it could also
be used for operations. If the committee wanted more
detailed information regarding the various categories in
which the funding could be used, he could contact DOT and
provide the committee with some more information on its
potential uses.
Co-Chair Stedman thought it would be advisable.
Senator Hoffman noted that Mr. Steininger had stated that
the guidelines for the utilization of the $122 million was
slightly more flexible. He wondered if any of the funding
could be used for capital projects.
Mr. Steininger replied that the funding could be used for
capital projects as well as for operating and maintenance
costs. The funding did not have to be directly tied to
COVID-19 mitigation which provided additional flexibility.
Co-Chair Bishop returned to the $18 million from the
Federal Transit Administration for rural and intercity
operating assistance. He requested a list specifying where
the funds were distributed in rural Alaska.
Co-Chair Stedman would have DOT provide a breakdown as part
of the subcommittee process. He would make sure the full
committee received the lists.
Senator Olson noted $49 million for the rural airport
system and wondered whether some of the funds could be used
for purchasing certain needed equipment. He had tried to
get a snow blower to one of the airports outside of Nome
for several years without success. He asked if the funds
could be used for capital investments.
Mr. Steininger deferred to DOT to respond to Senator
Olson's question.
Co-Chair Stedman invited Mr. Carpenter to respond to
Senator Olson's question.
9:38:12 AM
ROB CARPENTER, DEPUTY COMMISSIONER, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, JUNEAU (via
teleconference), deferred to Mr. Binder.
JOHN BINDER, DEPUTY COMMISSIONER, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, JUNEAU (via
teleconference), stated that the way the funds were
distributed did not include capital improvements. The
monies were specifically for maintenance and operations for
the airport.
Senator Olson asked if there was any available funding
through the CARES Act for the snow blower for one of the
Nome airports.
Mr. Binder replied that presently, the restrictions on the
funds had been limited and did not include capital
improvements to airports. The funds were to be used for
relief including revenue backfill for day-to-day items.
Senator Olson wanted to know if there were any other
funding that could satisfy the need for a snow blower in
the area of Nome. He noted the challenges that accompanied
the airports having to be shut down for extended periods in
the winter months. He had been working on the issue for
several years. He asked if there was any available funding
to purchase the equipment.
Mr. Binder replied that he had been working on the issue
and realized the challenge of not having a snow blower.
Presently, there were no available funds to purchase an
additional snow blower for the Nome area. He would continue
to assess the issue and make sure the department was
allocating the equipment it had across the state. He
certainly understood the desire to have a snow blower at
the Nome location.
Co-Chair Stedman was aware of Senator Olson's concerns
about rural airports and that he sat on the DOT
subcommittee. He would assign the senator to the airport
section of the DOT subcommittee so that he could address
the issue.
Senator Olson remarked that his preference would be
responsible for the AMHS section while Senator Stedman
worked on the airport section. He would make sure that if
Senator Stedman did not make it happen, he would take it
from the AMHS budget.
Senator von Imhof thought Senator Olson had highlighted
some of the challenges the state faced with COVID-19 monies
coming in. It was her understanding that CARES Act funding
could be used for COVID-19 related operating expenses
incurred in the current year that was not already funded in
the budget. In most cases the funding could not be used to
replace revenue either. There were several challenges to
spending the money in the correct way and avoiding
violating any federal provisions. She suggested that when
CARES Act money could be used for operating expenses, some
operating funds could be used for capital projects. She was
not necessarily suggesting it was what entities should do
but wanted to make the comment.
Senator Olson thought CARES Act funding could be used in
the case of an airport being shut down and individuals with
COVID-19 not being able to leave their communities or have
vaccines flown in because of the lack of proper equipment
or the maintenance of equipment.
9:43:04 AM
Co-Chair Stedman indicated Senator Bishop would be working
on the subcommittee.
Co-Chair Bishop relayed that he had been working on the
issue for 3 years for Senator Olson and thought the issue
was close to being resolved. The legislature increased the
budget which was later vetoed leaving the snow blower
unfunded. He commented that there was significant money
floating around. He suggested that if the legislature could
get funding to replace an engine on a King Air, it could
get a snow blower for Golovin, Alaska. It would facilitate
the King Air being able to land to transport people and
vaccines.
Senator Olson was not only looking for equipment for
Golovin, but he was also looking to satisfy other rural
airport needs.
Co-Chair Stedman indicated there had been a substantial
depletion in the AMHS fund. He noted there was $10 million
for operating assistance. He wondered whether consideration
had been given to backfilling AMHS.
Mr. Steininger replied that within CRRSAA there was the
ability to use some of the money for AMHS. The
administration had not allocated all the dollars yet.
Co-Chair Stedman would address the issue through the
budgetary process. The Senate would be having subcommittee
hearings specific to AMHS as well as other items. The
legislature would work with the administration to keep
expenditures down in the operating budget while addressing
the state's priorities.
Mr. Steininger relayed that Ms. Harbour would discuss some
of the community relief sent to Department of Commerce,
Community and Economic Development (DCCED).
Ms. Harbour turned to slide 12: "Community Relief Grants."
She reported that of the state's $1.25 billion in
Coronavirus relief funds, 45 percent was distributed to
communities through community relief grants for a total of
$568.6 million. The grants were to assist local governments
in being able to meet unique needs in their communities for
their residents and businesses. As of January 29, 2021,
only 27 communities had not yet entered into an agreement
with the state for $2.5 million. There were 51 payments
still pending for a total of $33 million. She reported that
44 communities had spent all their funding. Twenty-one
communities originally rejected funding because of the
limited timeframe, the unknown restrictions on the funding,
and uncertainty. A majority of the 21 communities were
reconsidering accepting the funding with the extended
timeline through December 31, 2021.
Co-Chair Stedman asked if the committee could have a
breakdown of the communities and the corresponding data on
the slide for backup purposes.
Ms. Harbour responded affirmatively.
9:47:18 AM
Ms. Harbour turned to slide 13: "Community Spending by
Category." She relayed that as of their January reports,
which included spending through December, communities
reported spending $464.6 million, 35 percent of which had
been used on payroll for public health and safety. She
continued that 22 percent of the funding had been used for
small business assistance; 16 percent had been used for
other economic support; 9 percent was used to provide
housing support; and 7.5 percent had been used for public
health expenses. Several communities had used their funding
to help offset costs to individuals including for utility
expenses, heating expenses, or stove oil expenses. Most of
the funds went into housing or economic support.
Co-Chair Stedman understood that the monies were not for
the purpose of replacing other budget items under the
normal course of business. He asked Ms. Harbour to provide
an overview of the concerns by communities regarding
misinterpreting or not following federal guidelines. He
also asked her to discuss any potential implications.
Ms. Harbour replied that there was one key exception to the
budgeted expenditures rule. Public health and safety
employee payroll could be entirely offset with Coronavirus
relief funds even if payroll funds were originally in the
budget. Many public health and safety employees were being
used for a substantively different use in the mitigation
and response to COVID-19. There were a couple of similar
exceptions including in the area of education. She
indicated that education expenses were being shifted to
distance learning and were being paid for with Coronavirus
relief funds even though they might have been covered in
the operating budget. She added that, for the most part,
Coronavirus relief dollars could not be used to cover
general administrative expenses or anything else that was
not being substantially diverted.
Co-Chair Stedman spoke generally that if the state was in
receipt of federal funds, it fell within the compliance of
definitions.
Ms. Harbour remarked that it was especially difficult for
communities as the federal guidance continued to change and
were delayed.
Ms. Harbour looked at slide 14: "State Agency COVID-19
Expenditures by Type," which provided information on the
state's response to COVID-19 expenditures. Most of the
expenditures had been supported with federal funds many of
which had been distributed as grants, approximately $1.1
billion.
Ms. Harbour mentioned that there were state expenditures
related to COVID-19. A federal act required COVID leave and
expanded the Family Medical Leave Act to include COVID-19
leave. The state had incurred about $6.8 million in
expenses related to COVID-19 leave, another $71 million in
other COVID payroll costs, and $753,000 in travel expenses.
It also incurred $47.8 million in services and $21.5
million in laboratory supplies. She reported that costs of
$32.3 million for other supplies included funding for
laptops for telework and other telework equipment and $3.1
million in capital and outlay equipment primarily
supporting telework and a secure telework environment.
Co-Chair Bishop asked if Ms. Harbour had reported $32
million for other supplies including laptops. He wondered
if the money went towards the purchase of 4,300 laptops by
the Department of Administration.
Ms. Harbour replied in the affirmative. She noted there
were other equipment purchases to support teleworking.
9:52:11 AM
Ms. Harbour turned to slide 15 and reported that the
information on the slide had been reported to the
legislature monthly along with the state's COVID
expenditures. There was a significant impact to revenues to
the state as a result of COVID-19. She reminded members
that lost revenues could not be offset with Coronavirus
relief funds. In FY 20, the state lost about $582 million
in projected revenues based on a comparison of the state's
full forecast for FY 20 compared to actual October revenue
estimates. Lost revenues in FY 21 totaled $785 million and
$687 million in FY 22.
Ms. Harbour continued that the impact by program varied
significantly. The University estimated losses of
$36.5 million as a result of COVID-19. The Alaska Marine
Highway System estimated a revenue loss of $22 million. The
Fish and Game Fund projected losses of $15.1 million in
Sportfish and $3 million in Wildlife Conservation. She
explained that because there was not a cruise ship season
there was a loss of $7.6 million in commercial passenger
vessel fees. The Department of Natural Resources had a
variety of programs that lost $2.6 million. The Technical
Vocational Education Program lost $1.9 million in revenues,
and the State Training and Employment Program lost
$1.2 million. The Alaska Vocational and Technical Center
also lost revenues of approximately $1.2 million, the most
of which resulted in a supplemental request for AVTEC.
Co-Chair Stedman asked Mr. Harbour to provide a breakdown
based on fiscal years. The committee had been working on
extracting the COVID impact around the state and was trying
to get to the underlying structural deficit number. The
information would be helpful.
Ms. Harbour mentioned that for the program revenue loss
estimates, they were just for FY 20 and FY 21. The
administration had not projected losses for FY 22. The
Department of Revenue did a statewide estimate.
Co-Chair Stedman hoped she would provide FY 22 estimates He
understood guesstimated for FY 22 could change. He noted
that cruise ships were unpredictable.
9:56:10 AM
Co-Chair Bishop would be diving deeper into the estimated
revenue losses at the subcommittee level. He noted that for
leases within DNR there was the option of a year of
deferment. Therefore, a loss might show in the current
year, but would show up as revenue in the following year.
He also noted hearing that the use of the next round of
federal funding would be more flexible.
Mr. Steininger commented that all the numbers were fluid in
terms of funding from the federal government. The numbers
OMB had presented over the previous couple of days,
particularly the revenue numbers, were subject to change as
more information came in. Future changes could greatly
impact the numbers. Also, he noted there had been
significant complexity and change at the federal level in
terms of guidance and rules surrounding the use of the
funds. He noted the value of the assistance the
administration had received over the prior year from
entities such as the Legislative Finance Division (LFD) and
the Division of Legislative Budget and Audit. Everyone had
worked together to ensure that the most current information
was available. There had been a substantial team effort
made to understand the best deployment of federal funds to
provide the best response to and recovery from the
pandemic.
Co-Chair Stedman stressed that it was a team effort to try
to unwind the COVID money placing it in multiple tranches
and integrating it into the legislative budget process. The
Office of Management and Budget had been very helpful in
clarifying the different pots of money and working with
LFD.
Co-Chair Stedman discussed the following day's agenda.
ADJOURNMENT
10:00:56 AM
The meeting was adjourned at 10:00 a.m.
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