Legislature(2021 - 2022)SENATE FINANCE 532
02/07/2022 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Fy22 Supplemental Operating Requests | |
| 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 7, 2022
9:01 a.m.
9:01:17 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 Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Natasha von Imhof
ALSO PRESENT
Neil Steininger, Director, Office of Management and Budget,
Office of the Governor.
PRESENT VIA TELECONFERENCE
April Wilkerson, Director of Administrative Services,
Department of Corrections, Juneau; Doug Wooliver, Deputy
Administrative Director, Alaska Court System.
SUMMARY
^FY22 SUPPLEMENTAL OPERATING REQUESTS
9:02:28 AM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed the "FY 2022 Supplemental
Summary" (copy on file). He stated that the Office of
Management and Budget (OMB) introduced three different
vehicles with supplemental appropriations: the fast track
supplemental bill that was introduced December 15, 2021;
supplemental appropriations within the FY 23 budget; and
the regular supplemental bill introduced on the fifteenth
day of the legislative session. He explained the different
sections within the spreadsheet, which detailed the various
categories of supplementals.
Co-Chair Stedman asked for the definition of some of the
terms such as fast track supplemental.
Mr. Steininger replied that the terms were referred to the
different ways that OMB referred to the specific
supplemental item proposal. He explained that the fast
track supplemental items introduced in December were known
supplemental items that were an urgent need where
operations could not occur without funding appropriated by
the legislature.
9:06:46 AM
Senator Olson wondered whether there were items in the fast
track supplemental that had penalties related to them
without prompt funding.
Mr. Steininger replied that he did not believe so.
Mr. Steininger looked at the spreadsheet titled, "FY
Supplemental Bill Summary - Operating" (copy on file). He
looked at items 2 through 4, which were from the fast track
supplemental bill. He stated that the Permanent Fund
Dividend (PFD) Hold Harmless Program funding was for the
completion of the fifty-fifty dividend to ensure that it
does not cause anyone to be "knocked off" public assistance
rules. He explained that item 3 was $1.8 million for the
Court System to address the trial backlog and restart jury
trials. He stated that item 4 was $2 million for per diem
for legislators. He explained that items 5 through 10 were
all negative supplementals, but were transfers from the
Health and Rehabilitation Services in the Department of
Corrections (DOC). He noted that the other side of the
transfer would be addressed later in the presentation
moving money into the institutions. He stated that there
were lower costs in the Health and Rehabilitation Services,
but higher costs in institution management.
9:09:45 AM
Senator Olson remarked that the per diem for legislators
was included in the fast track supplemental because the
governor vetoed the funding in the budget. He queried the
amount of the line item veto.
Mr. Steininger replied that the amount was equal to the
amount of the veto.
9:10:11 AM
Co-Chair Stedman asked for more clarification related to
that answer.
Mr. Steininger stated that the $1.99 million was vetoed
from the FY 23 operating, so the supplemental request
restored the veto.
Co-Chair Stedman queried the reasoning behind that.
Mr. Steininger replied that the supplemental request was to
ensure that per diem could be paid to legislators.
Co-Chair Stedman queried the reason for the veto.
Mr. Steininger replied that the veto was made because there
was not action taken on critical issues for the state, so
the governor sought to draw attention to those issues
through the veto. He noted, however, that in order to
ensure per diem was paid, the request was included in the
supplemental request.
Co-Chair Stedman asked that the veto reasoning be submitted
in writing to the committee.
Mr. Steininger agreed to provide that information.
Senator Hoffman remarked that, in his tenure in the
legislature, no governor had messed with the legislative
budget, and the legislature had not messed with the
budget of Governors Office. He was dismayed that the veto
action was taken. He hoped that it did not become a
pattern, because it was an important unwritten precedent.
Senator Olson wondered whether there was similar veto
action taken for the Executive Branch of government.
Mr. Steininger replied that there was not.
Senator Wielechowski asked for more information about the
PFD Hold Harmless program.
Mr. Steininger replied that when the PFD was paid out, the
asset was taken into consideration as income according to
the federal government rules when determining eligibility
for certain public assistance programs. He remarked that
the PFD could make some people ineligible for those
programs. He stated that there was a statutory requirement
to hold Alaskans harmless for that action, which had a
cost to the state.
Senator Wielechowski wondered why there was such a large
discrepancy between the original number and the
supplemental number.
Mr. Steininger replied that the supplemental number was
because of the second dividend payment request.
9:15:46 AM
Senator Wilson wondered why the request was not considered
in a different section.
Mr. Steininger replied that the organization of the
spreadsheet was technical and tracked in bill order.
Senator Wilson wondered whether the administration looked
at legislation to end the hold harmless provision.
Mr. Steininger replied that there was no intention to end
the hold harmless provision.
Co-Chair Stedman looked at item 4, and wondered whether the
veto of the per diem was due to inaction by the legislature
on the governors proposed policies.
Mr. Steininger replied in the affirmative.
Co-Chair Stedman wondered whether the governor would repeat
the veto of per diem if the legislature did not agree with
all the governors proposals.
Mr. Steininger replied that there was no proposal of an
overdraw in the FY 23 budget, so that would not occur in
the current proposed budget. He stated that there was still
interest in enacting a constitutional amendment to repair
the issues surrounding the PFD.
Co-Chair Stedman wondered whether the budget would be
vetoed if there was not agreement to a constitutional
amendment to limit the appropriating power of the
legislature.
Mr. Steininger replied that the intention was to draw
attention to the issue that had gone without resolution.
9:20:26 AM
Co-Chair Stedman understood that the message of the veto
was that the legislature must agree to the governors
proposed budget, or there would be retaliation.
Senator Hoffman remarked that in addition to the
constitutional amendment, the governor also wanted to
rewrite the formula with a fifty-fifty plan. He stated that
in special session, the Senate passed the plan in the long-
term.
Mr. Steininger responded that the administration saw that
the feedback from the people of Alaska who want a
constitutional amendment was a key aspect to the proposal.
9:25:23 AM
Co-Chair Stedman remarked that the governor had some
concerning proposals, which would potentially change the
balance of power among the three branches of government. He
asked about the stability of the constitution if the
governor and future governors asked for constitutional
amendments.
Mr. Steininger replied that he could not speculate on the
actions of future administrations, but merely was restating
the objectives of the current administration.
Co-Chair Stedman stressed that there was concern about the
proposed imbalance of the three branches of government.
Co-Chair Bishop remarked that there was a precedent when
enacting budgets, and there was professional courtesy
between the legislature and administration by not playing
politics with the money in the branches of government. He
felt that it was a dangerous road to go down. He felt
that disagreement on topics should not result in cutting of
the legislators per diem.
Senator Olson remarked that it was puzzling when examining
the administrations goals. He queried the next plan of the
administration because it seemed like a more totalitarian
perspective and Trump-onium in style. He wondered whether
th
there should be another January 6, insurrection outcry
from the people that did not win the election.
9:30:29 AM
Co-Chair Stedman remarked that the legislature had worked
to enact the governors amendments in the year prior, while
ensuring that the PFD did not result in an ad hoc draw of
the permanent fund. He queried the amount of money in FY 22
in extra cash, where the funds originated, and whether
there was discussion regarding the intention of the extra
funds.
Mr. Steininger stated that there had been a significant
change in the revenue picture of the state between spring
2021 and December 2021.
Co-Chair Stedman remarked that in 2021, the savings
accounts had been depleted, the budgets closed out, there
was an $1100 PFD, but now there was revenue increased by $1
billion. He asked how the numbers lined up.
Mr. Steininger stated that the increase in projected
revenue was how there was ability to redivert some of the
percent of market value (POMV) draw to the PFD, because the
PFD was based on 50 percent of the POMV. The increase in
traditional revenues allowed for government funding without
any additional savings draw.
9:36:08 AM
Co-Chair Stedman stated that all the money had been spent,
there was suddenly an additional $1 billion, the new
spending plan was roughly $2 billion, so he asked how the
obligation would be met without overdrawing the permanent
fund.
Mr. Steininger replied that the total supplemental request
was $955 million in general funds.
Co-Chair Stedman asked for a cash flow diagram because he
looked at $1.7 billion.
Mr. Steininger looked at the Supplemental Summary which
showed the total of all bills.
Co-Chair Stedman stated that he had his wires crossed,
and remarked that the proposal was slightly under $1
billion. He wondered whether there was a backfill of any
savings.
Mr. Steininger stated that there would be approximately
$200 million deposited into the CBR.
Co-Chair Stedman queried the number that would be withdrawn
from savings in 2022.
Mr. Steininger replied that there was $410 million spent
out of the SBR, which was pulled from surpluses in FY 21.
Co-Chair Stedman surmised that then the state would be
down $300 million.
Mr. Steininger replied in the affirmative.
9:40:21 AM
Co-Chair Stedman stated that it was probably closer to $650
million down in savings.
Mr. Steininger looked at page 2 of the spreadsheet, which
outlined the numbers section of the regular supplemental
bill on February 1.
Senator Wielechowski queried the reason for the shortage of
staffing in DOC.
Mr. Steininger deferred to DOC.
9:44:51 AM
APRIL WILKERSON, DIRECTOR OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF CORRECTIONS, JUNEAU (via teleconference),
stated that DOC had a large amount of staff out associated
with COVID. There were strict COVID screening requirements
to ensure the safety of the institutions, so as individuals
were unable to pass screening there were increased
vacancies and overtime in the institutions.
Senator Hoffman wondered how COVID was managed in the
institutions themselves. He asked whether the inmates were
isolated in the institutions.
Ms. Wilkerson replied in the affirmative, and agreed that
it was a challenge in the institutions.
Senator Wilson wondered whether there were any other items,
other than the items outlined on page 1, that the
administration vetoed and were then asking for
reinstatement.
Mr. Steininger replied that the only item he knew of was
the item on page 1 related to per diem.
Co-Chair Stedman asked that there be an examination of the
other budgets on that issue.
Mr. Steininger looked at page 3 and outlined the
supplemental requests.
9:50:01 AM
Senator Wilson wondered whether some of the monitoring had
previously been contracted out before DOC took over that
practice.
Mr. Steininger deferred to Ms. Wilkerson.
Ms. Wilkerson replied that there was a contract with a
vendor that provided the equipment and monitoring services,
and then the DOC staff oversaw the supervision of the
individuals.
Senator Wilson recalled that SB 91 had instituted the move
to have DOC monitor the individuals.
Ms. Wilkerson agreed.
Senator Wielechowski queried the number of people
incarcerated who had not yet faced conviction.
Ms. Wilkerson replied that the current unsentenced
population was approximately 55 percent.
Senator Wielechowski queried the administrations efforts
to lower that number.
Mr. Steininger replied that it was a concern, so that was
the reason for the $1.8 million supplemental request for
the Court System to reopen trials.
Senator Wielechowski stressed that the additional money
would not have a large impact on the issue.
9:55:37 AM
Mr. Steininger responded that he could not speak to policy.
He felt that root cause issues should be addressed like
prevention services, public safety, and investments
throughout the budget that were impactful to DOC.
Senator Wielechowski asked whether there was a
representative from the courts online.
9:58:10 AM
DOUG WOOLIVER, DEPUTY ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM (via teleconference), said that socially distancing
in existing courtrooms was a challenge and the money would
allow for jury trials to be executed safely. He said that
once jury trials could begin the backlog would disappear
and settlements would be more rapid. He thought that the
vast majority of cases would plea out or be dismissed. He
stated that the percentage of inmates incarcerated without
conviction would decline. He mention SB 91 and that the
legislation had tried to reduce the number of incarcerated
pre-trial. He
Co-Chair Stedman asked why the request had not been in the
original budget.
Mr. Wooliver asked for clarification.
Co-Chair Stedman clarified.
Mr. Wooliver said that the funding had not been requested
because the need had not been anticipated. He shared that
the courts
Senator Wilson understood that covid had delayed pre-trial
and backlog services. He asked whether any lawsuits had
been brought to the system because of delays in the system.
Mr. Steininger agreed to provide that information.
Co-Chair Stedman spoke of a cast in Sitka that involved a
reduced settlement because of the backlog.
Co-Chair Bishop said that SB 91 had not had a chance to
prove its worth. H
10:06:00 AM
Mr. Steininger turned to Page 4 and detailed the line items
by row. He spoke to rows 41 through 45.
Mr. Steininger turned to Page 5 and discussed the line
items 46 through 56.
Co-Chair Stedman asked for a timeframe when the PERS issues
would be negotiated.
Mr. Steininger replied he believed that Department of Fish
and Game (DFG) was on a three-year cycle, and agreed to
provide more information.
Co-Chair Stedman asked when the federal level review would
occur related to the transfers.
Mr. Steiniger said it depended on the federal program
timeline.
10:10:02 AM
Mr. Steininger turned to Page 6 and discussed line items 57
through 65.
Co-Chair Bishop spoke to lines 61 and 62, and wondered
whether the additions would be paid to the recipients per
the formula percentage.
Mr. Steininger replied in the affirmative.
Senator Wilson asked about line 59, and wondered whether
the grants went to every behavioral health agency that used
AKAIMS.
Mr. Steininger replied that the $500,000 was not grants out
to individuals, but rather was for contract and temporary
workers to address the backlog.
Senator Wilson said that the agencies that used AKAIMS
entered the data and wondered where the funds would be
distributed.
Mr. Steininger requested a lifeline. He said he would get
back to the committee.
10:14:07 AM
Mr. Steininger turned to Page 7 and discussed items 66
through 73.
Senator Wielechowski wondered whether general funds were
used for the project.
Mr. Steininger replied that federal funds could be used for
operating costs, and were placed within the budget based on
the guidance. He stated that the costs were not eligible
for the program, but there were GF funds available.
Senator Wielechowski asked for a list of programs that used
that similar method.
Mr. Steininger agreed to provide that information.
Senator Wilson queried the aircraft cost replacement
details.
Mr. Steininger replied that it was seven aircraft, but
agreed to provided detailed information.
Co-Chair Stedman asked about the expansion requests for the
State Troopers.
10:20:04 AM
Senator Olson queried the amount of money related to
aircraft accidents.
Mr. Steininger responded that he did not believe any money
was related to accidents, but was related to an increase in
flight hours.
Co-Chair Stedman requested a five-year history of funding
related to accidents.
Senator Olson wondered about what happened to the pilots
who experienced the accident.
Mr. Steininger replied that he would provide that
information.
Mr. Steininger looked at page 8, items 74 through 80.
Mr. Steininger discussed slide 9, items 81 through 86.
Senator Wilson asked for more information about line 83,
and elections. He wondered whether it was a test pilot.
Mr. Steininger agreed to provide more information, and
noted that there would be a change under Ballot Measure 2.
10:25:43 AM
Co-Chair Stedman remarked that the request was for a 50
percent POMV, and queried the statutory PFD in 2022.
Mr. Steininger replied that it would be around $2 billion,
but agreed to provide more information.
Senator Wielechowski looked at item 83, and queried the
reason for the discrepancy.
Mr. Steininger replied that the item sought to perform new
activities.
Senator Wielechowski asked for more specifics about those
activities.
Mr. Steininger agreed to provide that information.
Senator Hoffman requested details of how much and why there
were election security, and queried the reasons for
election security.
Mr. Steininger agreed to provide that information.
Senator Wielechowski wondered whether the direct mailings
would include the names of the candidates that were running
for office.
Mr. Steininger deferred to the Division of Elections.
Co-Chair Stedman asked for a detail of that answer.
Senator Wielechowski wondered whether the funding went to
the Office of the Governor.
Mr. Steininger replied that the Office of the Governor
included bother the Governor and the Lieutenant Governor,
with the Division of Elections falling under the Lieutenant
Governor.
10:30:18 AM
Mr. Steininger looked at page 10, items 87 through 100.
Co-Chair Stedman wondered why the grant was included in the
supplemental budget.
Mr. Steininger replied that the items were included in the
FY 23 budget.
Co-Chair Stedman remarked that there would be discussions
about effective dates.
Senator Wilson wondered whether any grants awarded to
municipalities had extensions.
Mr. Steininger replied that the federal government had
changed some guidance so there were some adjustments in
grant agreements.
10:35:29 AM
Senator Wilson surmised that there would be an amendment to
the supplemental budget.
Mr. Steininger agreed to provide that information.
Mr. Steininger looked at page 11, items 101 through 103.
Co-Chair Stedman queried the reason for the judgments and
claims.
Mr. Steininger replied that they were in the supplementals
because they were one-off costs.
Co-Chair Stedman asked whether they were the only
settlements for claims against the state.
Mr. Steininger replied that there was one other judgment,
but did not have monetary terms yet, so there would be an
amendment.
Co-Chair Stedman wondered whether the amendment deadline
had passed.
Mr. Steininger replied that the deadline was the following
Tuesday, but explained that judgments and settlements
frequently could occur after the deadline.
Senator Wielechowski requested more detail of subject
matter of the two lawsuits.
Mr. Steininger agreed to provide that information.
Senator Wielechowski wondered whether the lawsuits included
the veto against the Judiciary because there was a ruling
against the governor.
Mr. Steininger deferred to the Department of Law.
10:40:45 AM
Senator Hoffman asked whether the Department of Law was
available for the meeting.
Co-Chair Stedman replied that the Department of Law was not
available for questions in the meeting.
Co-Chair Stedman asked if the reason for the inclusion of
the supplemental requests was because of the interest
accrual date in August 2022.
Mr. Steininger replied in the affirmative.
Co-Chair Bishop discussed the agenda for the afternoon's
meeting.
ADJOURNMENT
10:43:28 AM
The meeting was adjourned at 10:43 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 176 FY22 Supplemental Final_Regular_Supplemental_Backup_2.1.2022 (002).pdf |
SFIN 2/7/2022 9:00:00 AM |
SB 176 |
| SB 176 FY22 Supplemental_Summary_2-1-22.pdf |
SFIN 2/7/2022 9:00:00 AM |
SB 176 |
| SB 176 FY2022 Supplemental Bill Summary Spreadsheet Operating.pdf |
SFIN 2/7/2022 9:00:00 AM |
SB 176 |
| 020722 Responses to Senate Finance Committee Questions re. FY22 Division of Elections Supplemental.pdf |
SFIN 2/7/2022 9:00:00 AM |