Legislature(2025 - 2026)SENATE FINANCE 532
01/27/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Governor's Proposed by 26 Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
January 27, 2025
9:00 a.m.
9:00:34 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:00 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Mike Cronk
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
Senator Donny Olson, Co-Chair
ALSO PRESENT
Lacey Sanders, Director, Office of Management and Budget;
April Wilkerson, Deputy Commissioner, Department of
Corrections.
PRESENT VIA TELECONFERENCE
Diana Thornton, Administrative Services Director,
Department of Public Safety.
SUMMARY
^GOVERNOR'S PROPOSED BY 26 BUDGET
9:01:28 AM
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
(OMB) discussed the presentation, "Overview of the FY2026
Governor's Budget; Senate Finance Committee; January 27,
2025" (copy on file). She pointed to slide 2, "FY 2026
Fiscal Summary."
9:08:34 AM
Co-Chair Hoffman requested information about the largest
one-time funding that was eliminated from the FY 26 budget.
Ms. Sanders replied that the largest one-time funding
removal was the addition of $175 million to the Base
Student Allocation (BSA), which was not included in the FY
26 budget. She remarked that the governor had a bill in the
current session that would address education funding.
Co-Chair Stedman wondered whether there were other
expenditures that were not reflected that were considered
funding obligations.
9:09:53 AM
Ms. Sanders replied that the budget should be considered a
starting point, and there were amendments that would be
added later.
Co-Chair Stedman wondered whether the state would be in
extreme debt.
Ms. Sanders replied that adding additional funds will
increase the deficit.
Co-Chair Hoffman noted that there was a requirement to have
a balanced budget according to the constitution.
Ms. Sanders replied that the fiscal picture was "not the
greatest picture."
Senator Kiehl wondered whether the budget included all
statutory requirements.
Ms. Sanders replied that there were some things in the past
that were considered "unfunded mandates."
Senator Kiehl surmised that there were specific favored
programs.
9:14:53 AM
Ms. Sanders finished discussing slide 2.
Co-Chair Hoffman remarked that the target level of the CBR
was around $5 billion. He queried the CBR level that the
administration felt was appropriate.
Ms. Sanders replied that there was a variety of numbers,
but she did not have a fixed number.
Co-Chair Hoffman wondered whether the administration had
any interest in creating new revenue measures.
Ms. Sanders responded that the governor did not introduce
any legislative proposals related to revenue, but was open
to having conversations about new revenue options.
Co-Chair Stedman felt that the direction did not have a
balanced budget.
9:21:10 AM
Co-Chair Hoffman wondered whether Ms. Sanders had any
comment.
Ms. Sanders stated that she did not have a response to Co-
Chair Stedman.
Ms. Sanders pointed to slide 3, "Budget Lookback."
Co-Chair Stedman explained that the issues that were not
included in the budget resulted in concern on the capital
side.
Ms. Sanders addressed slide 4, "FY2026 Operating Budget
Breakdown (UGF)
Co-Chair Stedman queried the dollar amount of state
retirement payments.
9:25:40 AM
Ms. Sanders replied that the state retirement payments are
the formula payments to continue to deposit into the
retirement accounts.
Co-Chair Stedman wondered whether it was for the unfunded
liability or the ongoing payments.
Ms. Sanders replied that it was for the ongoing payments.
Co-Chair Stedman asked whether there was a plan to pay into
the unfunded liability.
Ms. Sanders responded that she did not know what percentage
went toward the unfunded liability.
Ms. Sanders highlighted slide 5, "Operating Budget
Significant Highlights":
Department of Administration
• Office of Public Advocacy
$513.6 UGF for three administrative and legal
support positions to assist with increased
workload
$450.0 UGF for guardian ad litem positions, which
advocate for Children in Need of Aid (CINA)
Cases, becoming overtime eligible Department of
Commerce, Community, and Economic Development
• $50 million UGF (Supplemental Multi-year) to provide
a backstop for Front End Engineering work toward a
Final Investment Decision (FID) over FY2025-FY2027
• $2,487.5 UGF to restore the Alaska Gasline
Development Corporation's operating funding to provide
continued efforts on the Alaska Liquefied Natural Gas
(AK LNG) development
9:30:48 AM
Co-Chair Hoffman remarked that backfilling the project set
a bad precedent by the legislature.
Co-Chair Stedman requested the cost of the top five
employees that are in the Alaska Gasline Development
Corporation (AGDC)
Ms. Sanders agreed to provide that information.
Ms. Sanders continued to discuss slide 5:
• $10,000.0 UGF (Supplemental Multi-year) for the
Alaska Seafood Marketing Institute to implement a
comprehensive marketing plan for Wild Alaska Seafood
over FY2025-FY2027
Department of Corrections
• $3,900.0 UGF for correction of standby pay
calculation for supervisory positions department-wide
• $500.0 UGF to establish a Peer Support and Wellness
program
• $850.0 UGF to expand vocational programming and
training opportunities for 2,500 inmates, including
programs such as construction technologies and
electrical and plumbing classes
9:37:06 AM
Co-Chair Stedman asked for a brief synopsis of the growth
of the department.
Ms. Sanders replied that there was continued examination of
the structural needs of the department.
Co-Chair Hoffman recalled that he had a bill that included
provisions to address the issue that Alaska Natives had
about their population rate representation.
Ms. Sanders deferred to Ms. Wilkerson.
9:40:36 AM
APRIL WILKERSON, DEPUTY COMMISSIONER, DEPARTMENT OF
CORRECTIONS, (DOC) replied that there were some delays in
contracting.
Ms. Sanders spoke to slide 6, "Operating Budget Significant
Highlights (cont.):
Department of Education and Early Development
• Foundation Program and Pupil Transportation full
statutory formula funding for school districts
• $1,500.0 UGF for continued Teacher Recruitment,
Retention, Certification, and Apprenticeship
Development
• $1,250.0 UGF for continued investment in Career and
Technical Education initiatives
• $300.0 UGF to establish curriculum and student
pathways to expand the electrician and plumbing
workforce Department of Family and Community Services
$4,368.7 UGF to ensure continued operations of the
Alaska Psychiatric Institute
Department of Fish and Game
• Commercial Fisheries
.notdef $716.5 UGF to restore fisheries survey and
assessment projects located throughout the state
.notdef $450.0 UGF base funding for maintenance of
vessels, aircraft maintenance, repair, and
upgrades
9:45:45 AM
Senator Cronk queried the actual investment in subsistence.
Ms. Sanders explained that the subsistence budget was in
its own section, and agreed to follow up on the question.
Ms. Sanders displayed slide 7, "Operating Budget
Significant Highlights (cont.)":
Department of Health
$6,092.2 total ($5,867.1 UGF; $225.1 Federal
Receipts) for increased child care assistance based on
expanded eligibility (Ch. 15, SLA 2024 - SB 189)
Full statutory funding for the Senior Benefit
Payment Program
$1,500.0 ($750.0 UGF; $750.0 Other Receipts) for
Mental Health Trust Crisis Call Center
Senator Kiehl wondered how the integration would work with
the 988 number.
Ms. Sanders replied that it was the 988 number.
9:50:04 AM
Ms. Sanders continued to discuss slide 7:
Department of Labor and Workforce Development
• $182.3 UGF to increase available class seats from 15
to 30 students in the Industrial Electrical Program in
support of an initiative to expand Alaska's electrical
and plumbing workforce
Department of Law
• $1,194.1 UGF for five new positions to provide
support to reduce caseloads to a manageable level
• $500.0 UGF to support continued statehood defense
efforts across multiple agencies. Law will partner
with other State agencies to plan, review, and
continue efforts supporting Alaska's statehood
sovereignty
Co-Chair Stedman asked about the CDL requirement, and
operating engineers.
Ms. Sanders agreed to provide that information.
Ms. Sanders addressed slide 8, "Operating Budget
Significant Highlights (cont.)":
Department of Military and Veterans Affairs
• $175.0 UGF to expand operations of the Alaska State
Defense Force, Naval Militia, and Civil Air Patrol
• Deposits into the Disaster Relief Fund to provide
immediate response to disasters
.notdef $15 million UGF FY2025 (Supplemental)
.notdef $13 million UGF FY2026
Co-Chair Stedman wondered whether the $15 million for the
disaster relief fund was already funded in the previous
year.
Ms. Sanders replied in the affirmative.
9:56:06 AM
Ms. Sanders continued to discuss slide 8:
Department of Natural Resources
• $858.0 UGF and three new positions for Forestry
Management and Development for increased access to
land and resources
• $648.4 UGF for Natural Disaster Emergency Response
and Prevention
Co-Chair Hoffman wondered whether the positions were local
or brought in from other parts of the state.
Ms. Sanders replied that the positions were contracted with
communities, so it was up to the contractor to make that
determination.
Co-Chair Hoffman wondered whether all the positions were
filled.
Ms. Sanders replied in the affirmative.
Co-Chair Hoffman queried the turnover rate.
Ms. Sanders agreed to provide that information.
Ms. Sanders continued to discuss slide 8:
Department of Public Safety
• $1,215.2 UGF to provide five additional Village
Public Safety Officers positions, increasing the
program from 85 to 90 positions
• $3,750.1 UGF and nine new positions for the Alaska
State Troopers
.notdef $2,404.6 UGF to reestablish the Talkeetna Post,
Trapper Creek, and North Parks Highway Corridor
.notdef $1,345.5 UGF for three State Troopers in
Kotzebue for Child Crime Investigations in
Western Alaska
Senator Kiehl wondered whether the service area was in an
organized borough.
Ms. Sanders agreed to provide that information.
10:01:08 AM
Ms. Sanders looked at slide 9, "Operating Budget
Significant Highlights (cont.)
• Dalton Highway:
.notdef $250.0 UGF to provide employees with
specialized training to respond to accidents
along the Dalton Highway
.notdef $692.5 UGF for maintenance camp contracting
• Highways, Aviation and Facilities:
.notdef $1,000.0 UGF for Northern Region roadside
hardware repairs
.notdef $500.0 UGF for Right-of-Way clearing of vacated
homeless encampments
Senator Cronk requested a salary study for the employees in
Department of Transportation and Public Facilities
(DOT/PF).
10:05:00 AM
Co-Chair Stedman wondered what was happening with the
dilapidated structures at Mt. Edgecumbe in Sitka.
Ms. Sanders agreed to provide that information.
Ms. Sanders continued to discuss slide 9:
University of Alaska
• $20,930.0 total ($3,900.0 UGF; $17,030.0 University
Receipts) for fixed operating cost increases such as
cyber security and information technology, facilities
maintenance, and utilities
Statewide Items
• $2.5 billion UGF to provide a full statutory
Permanent Fund Dividend of approximately $3,900 per
eligible individual
Ms. Sanders discussed slide 10, "FY2026 Capital Budget
Breakdown (UGF)
Co-Chair Hoffman handed the gavel to Co-Chair Stedman.
Ms. Sanders pointed to slide 11, "Capital Budget
Significant Highlights":
Department of Administration
• $7,000.0 UGF for Statewide Time and Attendance
Management System
Department of Commerce, Community, and Economic
Development
• $6,315.5 Renewable Energy Funds for Round 17
Renewable Energy Project Grants
• $4,400.0 Ocean Ranger Receipts to Alaska Energy
Authority for Whittier Cruise Ship Terminal Port
Electrification
• $4,200.0 UGF to Alaska Gasline Development
Corporation (AGDC) - Phase 1 Gasline Project
Development
• $6,500.0 UGF to Alaska Energy Authority for Dixon
Diversion Project
• $2,500.0 UGF to Alaska Industrial Development and
Export Authority for West Susitna Road Access
Department of Corrections
• $3,080.0 UGF for continued development of the Point
Mackenzie Correctional Farm Produce Processing Plant
• $4,000.0 UGF for construction of the Hiland Mountain
Booking and Intake Area
10:12:45 AM
Co-Chair Stedman asked about the cost of shutting down
AGDC.
Ms. Sanders agreed to provide that information.
Ms. Sanders looked at slide 12, "Capital Budget Significant
Highlights (cont.)
Department of Environmental Conservation
• $450.0 DGF Home Heating Oil Tank Oversight program
Department of Fish and Game
• $5,625.0 UGF for Gulf of Alaska Chinook Salmon
Program
• $800.0 UGF for continued funding for the Alaska
Marine Salmon Program
• $6,800.0 Federal Receipts for Pacific Coastal Salmon
Recovery Fund activities
Department of Health
• $14,069.8 total ($1,407.0 UGF; $12,662.8 Federal
Receipts) for Provider Services Module for Alaska
Medicaid Program
Department of Law
• $8,000.0 UGF to replacement of the Case Management
System
Department of Military and Veterans' Affairs
• $2,200.0 total ($1,100.0 UGF; $1,100.0 Federal
Receipts) for Statewide Armory Barracks Conversion
projects
• $1,586.0 total ($396.5 UGF; $1,189.5 Federal
Receipts) for Camp Carroll modernization
• $1,950.0 total ($700.0 UGF; $1,250.0 Federal
Receipts for the Alcantra modernization
Co-Chair Stedman handed the gavel to Co-Chair Hoffman.
10:19:00 AM
Co-Chair Stedman looked at the Department of Law, and asked
about the Court System request.
Ms. Sanders explained that there was a Court System project
included in the budget.
Co-Chair Stedman wondered whether there were requests that
were not included in the budget.
Ms. Sanders replied in the affirmative.
10:20:58 AM
Ms. Sanders spoke to slide 13, "Capital Budget Significant
Highlights (cont.)
Department of Natural Resources
• $2,500.0 UGF for acquisition of a Firefighting
Aircraft to replace a Turbo Commander that is at end
of operational life
Department of Public Safety
• $6,500.0 UGF for acquisition of a single engine
turbine-powered, all-weather Pilatus PC-12NG Aircraft
for emergency rural response capabilities across 96%
of Alaska's maintained airports
• $1,400.0 UGF for Annual Aircraft Maintenance and
Repair
• $2,775.0 UGF for Alaska Wildlife Troopers Marine
Vessel Maintenance and Repair
• $750.0 UGF for Rifle-Rated Armor and Less Lethal
40mm Program
Senator Cronk wondered whether the state did annual
maintenance for the aircrafts, or whether it was a
contract.
Ms. Sanders deferred to the Department of Public Safety
(DPS).
10:24:09 AM
DIANA THORNTON, ADMINISTRATIVE SERVICES DIRECTOR,
DEPARTMENT OF PUBLIC SAFETY (via teleconference), replied
that maintenance for aircraft was conducted by both the
department and contractors.
Senator Kiehl queried the percentage of maintained airports
the former aircraft was able to land.
Ms. Sanders replied that the acquisition would not replace,
but it was a new aircraft.
Ms. Sanders continued to discuss slide 13:
Department of Revenue
• $4,475.0 UGF for the Dividend Application
Information System Replacement - Phase 2
• $65,635.0 total ($34,600.0 UGF; $1,785.0 MHTAAR
Receipts; $29,250.0 Federal Receipts) for Alaska
Housing Finance Corporation Annual Housing Programs
Senator Kiehl asked about the structure to manage the
ongoing costs of the technology projects.
Ms. Sanders deferred to the Office of Information
Technology (OIT).
10:29:03 AM
Ms. Sanders highlighted slide 14, "Capital Budget
Significant Highlights (cont.)
Department of Transportation and Public Facilities
• Dalton Highway:
.notdef $325.0 UGF for Silvertip Camp Bunkhouse
.notdef $2,500.0 UGF for Heavy Maintenance from
Milepost 76 to 89
.notdef $4,500.0 Capital Improvement Receipts for
Aggregate Stockpiles
• $4,250.0 UGF for development of Wood River Canyon
Bridges and Trails
• $2,666.6 UGF for continuation of the Williamsport
Intermodal Connector - Phase 2
• $6,250.0 total ($1,250.0 UGF; $5,000.0 Federal
Receipts) for Deploying Alaska Marine Highway System-
wide Wi-Fi
• $10,000.0 International Airport Receipts for the Ted
Stevens Anchorage International 10MW Solar Array
Installation
University of Alaska
• $6,000.0 UGF for University of Alaska Fairbanks'
Alaska Center of Unmanned Aerial Systems Integration
(ACUASI) Drones Program Year Four
• $5,000.0 UGF for the University of Alaska Fairbanks
to continue to Achieve Research 1 Status
• $3,000.0 UGF for the University of Alaska Fairbanks
to invest in research on Agriculture and Food Systems
for Alaska's Economic Sustainability
• $2,000.0 UGF for the University of Alaska
Southeast's Mariculture Program Expansion
10:34:50 AM
Co-Chair Stedman asked for an update of the University's
deferred maintenance.
Ms. Sanders stated that it was not in the governor's
budget.
Co-Chair Stedman felt that OMB should provide a perspective
on the University deferred maintenance.
Ms. Sanders displayed slide 15, "Full-Time Positions
Budgeted versus Filled She pointed to slide 16, "Vacancy
Rates
10:40:14 AM
Co-Chair Hoffman queried the current status of the report
on employment vacancies.
Ms. Sanders replied that the study should be finalized
around the end of March 2025.
Co-Chair Stedman wondered whether the reporting on the
study was wrong.
Ms. Sanders replied in the affirmative.
Co-Chair Stedman stressed that the administration and
legislature work together to ensure a sustainable outcome.
Senator Kiehl asked about the study on the IT positions.
Ms. Sanders replied that she would provide that
information.
10:45:02 AM
Senator Kaufman wondered whether the errors and omissions
were departmentally focused within the study.
Ms. Sanders explained that it was comprehensive data across
the whole state.
Co-Chair Stedman appreciated the effort to ensure that
there was correct data.
Senator Cronk asked about why Department of Fish and Game
(DFG) had so many budgeted positions.
Ms. Sanders explained that part-time positions were
included in that department, and agreed to follow up on the
issue.
Co-Chair Hoffman discussed the following day's agenda.
ADJOURNMENT
10:49:40 AM
The meeting was adjourned at 10:49 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 012725 OMB 10-Year_Plan_FY2026_12.12.24.pdf |
SFIN 1/27/2025 9:00:00 AM |
OMB FY26 Budget Overview |
| 012725 OMB Senate Finance FY2026 Budget Overview.pdf |
SFIN 1/27/2025 9:00:00 AM |
OMB FY26 Budget Overview |
| 020725 Enclosure A - Subsistence Budget Breakdown - final.pdf |
SFIN 1/27/2025 9:00:00 AM |
|
| 02.07.25 SFIN OMB Follow-Up to 01.27.25 Hearing Final.pdf |
SFIN 1/27/2025 9:00:00 AM |