Legislature(2025 - 2026)SENATE FINANCE 532
02/03/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Agency Responses to Fy 25 Legislative Intent Language: Lfd | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
February 3, 2025
9:01 a.m.
9:01:00 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Bert Stedman, Co-Chair
Senator Mike Cronk
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
ALSO PRESENT
Alexei Painter, Director, Legislative Finance Division
SUMMARY
AGENCY RESPONSES TO FY 25 LEGISLATIVE INTENT LANGUAGE: LFD
9:01:57 AM
Co-Chair Stedman presented Margeaux Ljungberg with her
five-year pin and certificate.
^AGENCY RESPONSES TO FY 25 LEGISLATIVE INTENT LANGUAGE: LFD
9:03:40 AM
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
(LFD) discussed the presentation, "Agency Responses to FY25
Legislative Intent Language" (copy on file). He discussed
slide 2, "Outline":
• Background on legislative intent language and memo
• Significant FY25 intent responses
AGDC
Criminal case backlog
DOH and DNR projections
Department of Corrections
Statewide salary study
Maintenance and operations of buildings and
vehicles
APFC Anchorage office
Items outside the agency's control
Mr. Painter addressed slide 3, "Background: About
Legislative Intent":
• The legislature frequently includes legislative
intent in appropriation bills to give guidance to
agencies.
The confinement clause of the Constitution limits
intent or qualifying language. In Alaska Legislative
Council v. Knowles, the Supreme Court set the
following limits:
"[T]he qualifying language must be the minimum
necessary to explain the Legislature's intent
regarding how the money appropriated is to be
spent. It must not enact law or amend existing
law. It must not extend beyond the life of the
appropriation. Finally, the language must be
germane, that is appropriate, to an appropriation
bill."
• Legislative intent does not have the force of law
and may be unconstitutional if it fails the test set
out by the Supreme Court in the above paragraph.
Mr. Painter pointed to slide 4, "Legislative Intent Memo":
• Legislative intent language typically requests a
follow-up from the agency with further information.
• The Office of Management and Budget compiles
agencies responses to each intent item. The
Legislative Finance Division then reviews the
responses and determines whether they comply with the
intent language.
• A combined memo with all legislative intent
responses and LFD analysis is sent to the Finance co-
chairs early in the legislative session.
• The FY25 intent memo included 50 items of FY25
intent, plus five items from previous years for which
compliance could not be determined when the FY24 memo
was prepared (due to report timing or other factors).
9:08:03 AM
Mr. Painter addressed slide 5, "LFD Determinations of
Compliance in FY25 Intent Memo
Mr. Painter highlighted slide 6, "Non-Compliant Items Due
to Veto
DOA
$1.2 million UGF for rural public radio stations (pop.
< 20k)
DCCED
$1.5 million UGF for ASMI, with intent to work with
ATIA
DOH
Intent to increase general relief/temporary assisted
living rates (partially vetoed, so rate only partially
increased)
DOH
Intent regarding $80.0 UGF reimbursement to pharmacies
for dispensing certain medication in locking vials
DOT/PF
Intent regarding $1,273.8 UGF for hiring incentives
for mechanics and operators in the Central Region
DOT/PF
Intent regarding collecting fees from ManhCho mining
project for highway maintenance and other costs
Mr. Painter looked at slide 7, "AGDC Intent Language
Response (Item 5)":
• FY25 budget included language directing the Alaska
Gasline Development Corporation (AGDC) to complete an
independent third-party review of a project proposal
and present that to the legislature.
• AGDC contracted with Wood Mackenzie and submitted
the report to the legislature on November 12, 2024.
AGDC and Wood Mackenzie presented to the House
Resources Committee on November 19, 2024.
• The analysis developed four demand scenarios,
ranging from current state demand to a full LNG
facility. It also estimated the impact of variables
such as a federal loan guarantee and property tax
rates.
Mr. Painter displayed slide 8, "Intent Regarding Criminal
Case Backlogs (Items 3, 38, and 50)":
• Identical intent language was included in three
places in the budget (DOA's Legal and Advocacy
Services, Department of Law's Criminal Division, and
the Judiciary's Trial Courts) that reads:
"It is the intent of the legislature that defense
attorneys take every reasonable action to work through
the criminal case backlog with expediency."
• Public Defender Agency responded that they have
implemented several initiatives to reduce backlog,
including training and mentoring emphasizing the need
for speedy resolution of cases and prioritizing
recruitment efforts.
• Judiciary responded with a list of several changes
they have adopted, such as using "trailing calendars"
to condense trial starting dates, minimizing
repetitive hearings, and issuing directives and orders
about limiting the length and number of continuances
that can be granted.
• Department of Law responded that they have ongoing
efforts to work through the backlog but did not
describe those efforts.
9:14:13 AM
Mr. Painter discussed slide 9, "Medicaid and Fire
Suppression Projections (Items 34 and 40)":
• FY25 is the second year using a Medicaid projection
system developed during the 2023 session in
cooperation between DOH, OMB, and LFD. The projection
builds from actual claims and adjusts for policy
changes and other expected cost changes. The latest
projection was received on December 15, 2024, and is
expected to be incorporated into the Governor's
amended budget.
• A similar projection was developed for fire
suppression in cooperation between DNR and OMB last
session. The latest projection was received on January
19, 2025. However, it does not fully account for
spring fire costs and may still be a work in progress.
9:20:17 AM
Mr. Painter highlighted slide 10, "Department of
Corrections (Items 9-16)":
The legislature included eight intent items for the
Department of Corrections:
9. Working with OMB and LFD to develop a
budgetary projection model
10. Preparing a report to examine the cost
savings associated with closing institutions
11. Preparing a plan to increase the efficiency
of institutions
12. Monthly reporting on spending on overtime and
other premium pay
13. Not use transfers to maintain a greater than
10 percent vacancy rate in institutions
14. Negotiating with the U.S. Marshals over
manday billings
15. Notifying the Court System about lengthy
periods on electronic monitoring
16. Expand alternative step-down strategies to
reduce the reliance on Community Residential
Centers (CRCs)
Mr. Painter addressed slide 11, "Department of Corrections
(Cont.)
• DOC has provided monthly reporting of overtime and
premium pay. However, this is not matched up with
their projection model, which is based on Management
Plan rather than actuals (like the Medicaid and Fire
Suppression projections)
• Response on institutional closure and cost
efficiencies did not provide detailed analysis on the
fiscal impacts of consolidation or estimates of
transition costs to closing institutions.
• DOC has met with the U.S. Marshals over manday
billings but has not made progress in coming to an
agreement
• DOC appears to be complying with intent regarding
electronic monitoring, prisoner transport, and CRCs.
They are a "piloting a furlough program for
residential substance use disorder treatment in the
Mat-Su Valley at two separate locations and exploring
new transitional housing opportunities in Juneau"
9:26:48 AM
Senator Kaufman looked at slide 9, and remarked on the
rates being out of control and the changes within that
response. He wondered whether there was financial risk
"buried in this", and whether there was an examination of
whether there was a trend related to that finding.
Mr. Painter replied that the agencies had stated that the
timing was unpredictable. He noted that, until recently,
the impact was primarily on the federal funds, because the
rates were for the tribal health system.
Senator Kiehl wondered whether the endeavor was worth
continuation to give the department a useful model and live
within their budget.
Mr. Painter replied that it was a policy choice by the
legislature. He stressed that there was a recent turnover
to the department's budget team.
9:31:32 AM
Co-Chair Stedman recalled that there had been a concern
about employees calling in sick on their regular shift, but
then volunteering for the overtime shift in the same time
frame. He wondered whether that was still an issue.
Mr. Painter replied that the Alaska Correctional Officers
Association's bargaining contract expired the previous
summer, and there was no agreement made, so there was
current arbitration.
Co-Chair Stedman felt that it was appalling that an
employee would not show up to their regular shift, and then
volunteer for the overtime shift. He stressed that there
was a significant incremental increase year after year.
Mr. Painter agreed.
9:36:42 AM
Senator Kaufman referred to the spreadsheet titled, "UGF
Budget Changes, FY 16 to FY 26 Gov" (copy on file), and
asked about the Department of Public Safety (DPS) and
wondered if the nominal and inflation adjustment numbers
were correct.
Co-Chair Stedman stated that LFD would provide that
information.
Mr. Painter pointed to slide 12, "Statewide Salary Study
(Item 24)":
• In FY24, the legislature funded a $1 million UGF
capital project for a salary study of all executive
branch job classes to identify and correct
discrepancies in pay as compared to similar positions
in private sector within the state. The last salary
study was performed in 2009 and it was not
implemented.
• FY24 intent to align to the 65thpercentile and
include benefits, and FY25 intent to implement results
and report on the status of these efforts by December
20, 2024.
• Report was expected in June 2024 but has been
withheld to modify comparison of FY24 data to FY25 pay
increases for certain State employees and expand State
government comparisons.
Co-Chair Stedman requested that the study be provided as
soon as possible.
9:39:23 AM
Mr. Painter looked at slide 13, "Maintenance and Operations
of Buildings and Vehicles (Items 25 and 26)":
• FY25 budget structure included legislative addition
of allocations to track maintenance and operations
costs, as per AS 37.07.020(e).
• Legislative intent requested that the Governor's
FY26 budget request adhere to and improve upon this
structure.
Separate intent requested a report detailing, by
allocation, all operating and maintenance costs
related to State-owned assets including vehicles,
vessels, aircraft, and heavy equipment that are not
included in the State Equipment Fleet.
• The Governor's FY26 budget request included
additional allocations for cost tracking, but the
intent response stated that new Object Codes would be
implemented by January 1, 2025 to track costs, and
that comprehensive information on current expenditures
is not available at present.
Co-Chair Stedman stated that the DOT subcommittee would
examine those issues.
Senator Kaufman remarked that organizations had very
comprehensive equipment and maintenance databases that
tracked completions and anticipation. He felt that it was
easy to procure databases that would track maintenance
activities.
Co-Chair Stedman felt that the concern could be brought up
with DOT.
9:44:58 AM
Mr. Painter discussed slide 14, "Alaska Permanent Fund
Corporation Anchorage Office (Item 43)":
• Legislature restricted APFC office expenditures to
the Juneau Office, with a $100 IncOTIto decommission
the Anchorage office. Governor vetoed Anchorage office
funding.
• Intent stated that APFC should not establish or
maintain new office allocations without corresponding
budget increments for that purpose, and report on any
expenditures related to the Anchorage office.
• APFC reported increased FY25 expenditures for the
Anchorage office and cited travel to the Juneau
office, and FY25 equipment purchases of standing desks
and meeting room furniture for six staff in Anchorage.
Senator Kiehl remarked that he examined the report and
language from the Permanent Fund Corporation, and felt that
it did not address many of the questions related to
personnel.
Co-Chair Stedman wondered whether there could be a
subcommittee of a subcommittee to deal with the permanent
fund.
Senator Kiehl remarked that the chairman of the operating
budget could address the issue, but stressed that there
needed to be efforts to examine the issue in the current
year.
Mr. Painter looked at slide 15, "Items Outside an Agency's
Control":
• DFCS Item 20:FY24 and FY25 intent for agency to
submit a plan and timeline for renovation or
replacement of the Fairbanks Pioneer Home.
• DFCS Item 21: Plan to update or replace the Online
Resources for the Children of Alaska (ORCA) system.
• DPS Item 41: Plan to fund Child Advocacy Centers in
FY26 budget.
9:51:30 AM
Senator Cronk remarked that there needed to be an
examination of the funding of programs that had lost
federal funding.
Co-Chair Stedman agreed, and stated that the examination of
the significant increases in the four largest departments.
He stressed that not dealing with the issues in the
agencies only puts burdens on future budgets.
Mr. Painter remarked that there were more items that were
not covered, and was willing to answer questions.
Co-Chair Stedman encouraged the committee to examine the
report to determine whether there was a need to address
more issues.
ADJOURNMENT
9:55:38 AM
The meeting was adjourned at 9:55 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020325 Copy of FY16-26 Cross Gov Term Budget Compares 1-27-25.pdf |
SFIN 2/3/2025 9:00:00 AM |
|
| 020325 FY25 Intent Memo and Attached Reports.pdf |
SFIN 2/3/2025 9:00:00 AM |
|
| 020325 FY25 Legislative Intent Responses 2-3-25.pdf |
SFIN 2/3/2025 9:00:00 AM |