Legislature(2025 - 2026)SENATE FINANCE 532
02/04/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Fy 25 Supplemental Budget: Office of Management and 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
February 4, 2025
9:01 a.m.
9:01:09 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 James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Mike Cronk
ALSO PRESENT
Lacey Sanders, Director, Office of Management and Budget;
Hanna Lager, Administrative Services Director, Department
of Commerce, Community and Economic Development.
PRESENT VIA TELECONFERENCE
Cori Mills, Deputy Attorney General, Department of Law.
SUMMARY
^FY 25 SUPPLEMENTAL BUDGET: OFFICE OF MANAGEMENT and BUDGET
9:02:33 AM
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
discussed the presentation, "Overview of the FY2025
Supplemental Budget" (copy on file). She looked at slide 2,
"FY 2025 Supplemental Budget Overview."
9:05:05 AM
Co-Chair Stedman asked about the oil price average to make
the deficit zero.
Ms. Sanders agreed to provide that information.
Ms. Sanders addressed slide 3, "Operating Supplemental
Requests She detailed the different portions of the slide
Co-Chair Stedman asked that there be questions held for the
slide addressing the specific details related to slide 3.
Ms. Sanders continued to address slide 3.
Ms. Sanders displayed slide 4, "Capital Supplemental
Requests
9:16:42 AM
AT EASE
9:17:58 AM
RECONVENED
9:18:10 AM
Ms. Sanders looked at the spreadsheet titled, "FY 2025
Supplemental Bill Summary" (copy on file).
Ms. Sanders pointed to line 3:
UGF: $3,905.0
Total: $3,905.0
The Alaska Public Employees Association (APEA)
collective bargaining agreement (CBA) (Article 25.5 B)
grants supervisory employees standby pay when those
members are required to be available outside of their
normal working schedule. Supervisors are required to
be available outside of their normal schedule for
emergencies or any other fire, life, safety issues
that may occur in a prison setting or community
supervision setting. The Department of Corrections is
responsible for the care and custody of more than
12,900 persons that are in custody or under
supervision. This includes more than 4,400 persons
that are held within one of the 13 State correctional
facilities, as well as more than 8,500 persons that
are under supervision within an Alaska community.
Community supervision includes electronic monitoring,
community residential center, in-patient treatment
facility placement, pretrial supervision status, or
under probation/parole releases. Superintendents,
Chief Lieutenants, Chief Probation Officers, medical
personnel, Facilities Maintenance Managers, and other
management personnel are responsible for the care and
supervision of those persons under their assigned
custody 24/7, supervised release, as well as
maintaining the facilities and systems which support
security operations. The standby roster is rotated
between the supervisors, ensuring coverage and
responsiveness for unanticipated situations. This
request will assist in meeting the unfunded mandates
associated with the impacts from APEA CBA Article 25.5
B.
Ms. Sanders discussed line 4:
DGF: $195.0
Total: $195.0
The amount in FY2025 budget was incorrectly allocated,
creating a shortfall for the Dillingham jail program.
This supplemental increment will provide full funding
for the Dillingham jail operations
Ms. Sanders pointed to line 5:
DGF: $650.0
Total: $650.0
Additional funding is needed for the Alaska
Performance Scholarship (APS) Awards to cover the
increase in the number of students receiving the APS
due to changes enacted in House Bill (HB) 148 (Chapter
4, SLA 2024). For FY2024, 2,281 students were awarded
the APS for a total of $7,823.0. Due to changes
enacted in HB 148, the APS eligibility increased to
3,200 students. At this time, actual usage is unknown.
However, coupled with the increase in award amounts,
there is a need for an increment to cover increased
APS disbursements for FY2025 beginning with new
enrollments in November 2024 and beyond. The total
appropriation requested does not exceed the maximum
funding amount allowed in statute for the APS and the
Alaska Education Grants (AEG).
Ms. Sanders addressed line 6:
DGF: $325.0
Total: $325.0
The Alaska Education Grants (AEG) will increase as a
result of the projected Alaska Performance Scholarship
(APS) Awards increase. Annually, the Department of
Revenue determines the amount available from the
Higher Education Investment Fund for appropriation for
the APS and AEG. Of that amount, two-thirds is
available for the APS and one-third for the AEG.
Therefore, if the APS amount awarded increases, a
corresponding one-third of that amount needs to be
appropriated for AEG recipients. The total
appropriation requested does not exceed the maximum
funding amount allowed in statute for the APS and the
AEG.
Ms. Sanders looked at line 8:
Fed: $3,100.0
Total: $3,100.0
This federal receipt authority ensures sufficient
capacity within the Division of Behavioral Health
(DBH) for three recently awarded federal grants for
mental health services from the Substance Abuse and
Mental Health Services Administration and Health
Resources and Services Administration. The division
will be able to begin work related to these grants in
fiscal year 2025.Promoting the Integration of Primary
Health Care in Alaska: Addresses mental health and
substance use conditions in primary care settings. The
DBH will award grants and partner with qualified
community health centers focusing on underserved
communities, with a significant focus on serving
populations facing health disparities. The project
period for this $900.0 award is September 20, 2024, to
September 29, 2025.Certified Community Behavioral
Health Clinic (CCBHC) Planning Grants: Supports the
development and implementation of certification
systems for CCBHCs by establishing prospective payment
systems for Medicaid reimbursable services. This award
will also support Alaska's application to participate
in a four-year CCBHC demonstration program. The
project period for this $1,000.0 award is December 31,
2024, to December 30, 2025. Community Project Funding
from the Health Resources and Services Administration:
This award allocates Health Resources and Services
Administration funding to procure an updated
Information Management System for electronic health
records, case management information, and Medicaid
billing. The project period for this $1,200.0 award is
from August 1, 2024, to July 31, 2025.
Ms. Sanders addressed line 9:
Fed: $5,000.0
Total: $5,000.0
Additional federal authority is needed related to the
Energy Assistance Program in the Division of Public
Assistance to align with federal Low Income Home
Energy Assistance Program (LIHEAP) grants allocated to
Alaska. The annual federal award averages $12.6
million for Alaska. The Heating Assistance Program
(HAP) is designed to promote the general welfare and
safeguard the health and well-being of Alaska's
population by offsetting the cost of home heating for
eligible Alaskan residents. The HAP assists households
with income at or below 150 percent of the federal
poverty income guidelines, who have a minimum of $200
in out-of-pocket heating costs per year and meet all
other eligibility criteria. The benefit is a one-time
payment to the household's vendor, sent to the vendor,
and applied to the customer's account as a credit.
This program is available to homeowners and renters.
9:19:47 AM
Senator Kiehl recalled that there was an issue related to
DOC about the federal man days issue.
Ms. Sanders agreed, and stated that there was work on a
projection about whether additional funds were necessary.
Senator Kiehl surmised that there would be an expectation
of an amount proposed in a future amendment.
Ms. Sanders replied in the affirmative.
9:20:58 AM
Co-Chair Stedman thanked OMB for working with the
legislature to ensure that they address the DOC budget.
Co-Chair Stedman looked at line 9, and wondered whether
there was an issue about funds for heating fuel.
Ms. Sanders replied that she was not aware of a specific
backlog, but recalled that there had been conversations
about addressed a possible backlog. She agreed to follow up
with the department about their outstanding applications
for processing.
Co-Chair Stedman recalled that there were constituents that
had contacted the legislature about not receiving their
benefits.
Ms. Sanders agreed to follow up with the committee about
the public assistance backlog.
Ms. Sanders looked at line 10:
UGF: $14,200.0
Fed: $214,399.0
Total: $228,599.0
This funding authority addresses an increase in State
costs for services on behalf of Medicaid eligible
Alaskans. This increase is based on a projection of
current spending data approximately halfway through
FY2025 and consideration of pending items against
current budgeted authority. Contributing factors to
the cost increase include Medicare Part D premium claw
back and annual rate increases such as rates
associated with physician services, facilities, home
and community base waivers, and behavioral health.
Ms. Sanders pointed to line 11:
UGF: $888.6
Total: $888.6
This increment aims to expand the number of licensed
plumbers and electricians in the state. The Plumbing
and Heating program has capacity and the
infrastructure to offer two courses a year, but the
current funding level restricts the offering to one
course. A media campaign will be launched to advertise
the addition of a second course with the goal of
increasing interest among Alaskans to pursue plumbing
and heating education at Alaska Vocational Technical
Center. The Industrial Electrical (IE) program is a
year-long course that is offered starting during the
fall semester. To double the current available class
seats, additional funds are needed in FY2025 to pay
for advertising, instructional materials, and an
adjunct instructor for the Industrial Electrical
program. This instructor will prepare the
instructional facilities for classes starting in Fall
2025.
9:24:51 AM
Ms. Sanders discussed line 19:
DGF: ($300.0)
Other: $300.0
The University of Alaska (UA) will begin reporting
non-federal grant and contract activity as statutory
designated program receipts (SDPR). The UA receives
private grants and contracts from corporations, local
governments, non-profit entities, and foundation
endowment that are restricted or designated. This
activity (approximately $79.1 million in fiscal year
(FY) 2025) has historically been reported using
university receipt authority, but would more
appropriately be considered SDPR. The reclassification
of $28.6 million in university authority to SDPR would
cover a portion of the anticipated activity in FY2025.
Systemwide Services: $300.0; Anchorage Campus:
$21,700.0; Fairbanks Campus: $4,200.0; Juneau Campus:
$2,400.0.
9:25:20 AM
Senator Kiehl pointed to line 17, which was the DOT storm
water tracker, and remarked that it was a new subscription,
and he wondered why it was a current year supplemental and
not a next year request.
Ms. Sanders replied that DOT would like to begin the
subscription as soon as possible.
Co-Chair Stedman looked at line 19, and wondered why the
action was not done earlier.
Ms. Sanders replied that it became apparent that there was
not sufficient authority to address all needs.
Co-Chair Stedman asked for more information about line 14.
Ms. Sanders replied that lines 13 and 14 were both for the
Retirement Management Board through the Department of
Revenue (DOR). She stated that there had been recent
concerns about salary.
Co-Chair Stedman felt that there should be further
exploration of the employment and retention from the salary
increases.
9:30:28 AM
Ms. Sanders replied that there were efforts to examine the
reduced vacancy over a period of time
Co-Chair Stedman hoped to examine the salary studies.
Ms. Sanders stated that lines 22 through 24 were related to
the university.
Ms. Sanders stated that page 4 addressed the University
budget.
Ms. Sanders looked at page 5, and stated that lines 37 and
38 related to the Alaska Oil and Gas Conservation
Commission (AOGCC).
Ms. Sanders pointed to line 30:
The State's allocation of one-time funding from sec.
9901, Subtitle MCoronavirus State and Local Fiscal
Recovery Funds, American Rescue Plan Act (ARPA) of
2021 (P.L. 117-2) for the provision of government
services is fully expended in fiscal year 2024. This
request is to replace one-time funding.
Ms. Sanders addressed the Alaska Marine Highway item.
Senator Kiehl noted the new software system, and wondered
why they were supplemental requests rather than in the
regular budget.
Ms. Sanders looked at line 34, and stated that it was
identified as a reappropriation. She also addressed the
AOGCC request and deferred to Ms. Lager.
9:35:23 AM
HANNA LAGER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, furthered
that the item was related to an in-kind match from a third
party.
Senator Kiehl requested details on the timeframe.
Co-Chair Stedman asked about line 39.
Ms. Sanders replied that the item was related to
congressional spending.
Ms. Sanders discussed line 50:
UGF: $4,000.0
Total: $4,000.0
* Sec. XX. DEPARTMENT OF LAW. (a) The sum of
$4,000,000 is appropriated from the general fund to
the Department of Law, civil division, special
litigation and appeals, for the purpose of ongoing
litigation brought by A Better Childhood, Inc., for
the fiscal years ending June 30, 2025, June 30, 2026,
and June 30, 2027. This request supports ongoing
litigation expenses associated with the A Better
Childhood (ABC)/Jeremiah M. lawsuit. Over 1.1 million
pages of discovery have been produced to date; further
discovery and depositions will take place in the
months leading up to the trial that is set for May
2025. Significant hours will be spent by the assigned
attorneys and paralegals to meet the demand of the
deadlines that are currently set by the court.
Depending on decisions by the court, interlocutory
relief from an appellate court may be required as well
during FY2025. Prior authority appropriated to the
Department of Family and Community Services for this
case has been fully expended.
Co-Chair Stedman asked for a brief synopsis on line 50.
Ms. Sanders deferred to Ms. Mills.
9:38:01 AM
CORI MILLS, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW (via
teleconference), (LAW) explained line 50. She stated that
in 2022, the state was sued as a class action that looked
to change the child welfare system. She stated that
plaintiffs hoped to change the system through the Court
system, instead of through the legislature. She stated that
a number of states had been sued by the same group, and had
settled in order to have the Court run the child welfare
system. She stated that there was an attempt to move
quickly in the case. She explained that the costs were high
compared to other lawsuits. She stated that, in the scheme
of things, there was fairly low spending compared to other
states.
Co-Chair Stedman asked for more dialogue about potential
financial disclosure on the issue.
Ms. Mills agreed to provide further information at any
time.
Senator Merrick wondered whether a bill passed by the
legislature could address the plaintiff's concerns.
Ms. Mills replied that based on the plaintiff's behavior in
other states, which would not negate their concerns.
Ms. Sanders addressed line 51:
UGF: $2,756.2
Total: $2,756.2
Sec. XX. DEPARTMENT OF LAW. (b) The sum of $2,756,227
is appropriated from the general fund to the
Department of Law, civil division, deputy attorney
general's office, for the purpose of paying judgements
and settlements against the state for the fiscal year
ending June 30, 2025.Following are the amounts related
to judgments and settlements of the State: Brett Lane
v. State, Department of Family and Community Services,
Office of Children's Services - $2,622,009Sargent v.
State of Alaska Department of Labor and Workforce
Development et al. - $52,772SEACC v. State of Alaska
Department of Natural Resources - $68,586Daniel K.
Donkel and Samuel H. Cade v. State of Alaska
Department of Natural Resources - $12,860
9:43:11 AM
Senator Kiehl wondered whether there was an issue that
should be addressed in OCS.
Ms. Sanders deferred to Ms. Mills.
Ms. Mills replied that it was not related to the case
regarding the Office of Children's Services (OCS), but was
an employment action.
Co-Chair Stedman requested more detail on that case.
9:46:10 AM
Senator Kiehl looked at the refunding of the bonds, and
noted one line that showed an increase.
Ms. Sanders replied that lines 52 through 55 refunded
specific debt. She noted that line 56 and 57 showed the
issuance of the new series which showed an overall savings
to the state.
Co-Chair Stedman remarked that there may be an examination
of the debt and amortization moving forward, and hoped to
hear more from DOR. He wanted to examine the value of debt
in the state.
Ms. Sanders replied that those departments will take note
on the subject to prepare to present to the committee.
Ms. Sanders restated the explanation of line 57. She stated
that line 58 was a reappropriation from DOT/PF to rebuild
the Disaster Relief Fund.
9:49:23 AM
Ms. Sanders pointed to line 61:
* Sec. XX. OFFICE OF THE GOVERNOR. The unexpended and
unobligated balance on June 30, 2025, of the Alaska
capital income fund (AS 37.05.565) is appropriated to
the Office of the Governor for statewide critical
deferred maintenance, renovation, and repair.
9:50:12 AM
Co-Chair Stedman asked for explanation of the "sweep."
Ms. Sanders replied that the CBR had a requirement that the
end of the fiscal year, owed money were swept of fund
balances into that account.
Co-Chair Stedman asked about that debt and its interest
rate.
9:50:59 AM
Ms. Sanders replied that that she did not know off the top
of her head.
Co-Chair Stedman stated that it was an excess of $10
million, which was a debt that was "basically owed to
ourselves." He wondered whether there were other accounts
that were problematic as related to the sweep for cash
flow. He asked about any issues that could arise in paying
the obligations near the beginning of a fiscal year.
Ms. Sanders replied that she could not recall an account
that faced cash flow issues at the beginning of the fiscal
year. She explained that there were funds available to
reach cash flow needs. She agreed to provide further
information.
Co-Chair Stedman wanted to pay attention to those cash flow
concerns, and how it related to the sweep in the CBR. He
wanted to examine the technical accounting of cash flow at
the beginning of a fiscal year.
Co-Chair Stedman discussed the following day's agenda.
ADJOURNMENT
9:57:42 AM
The meeting was adjourned at 9:57 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020425 FY2025 Supplemental Bill Summary Spreadsheet.pdf |
SFIN 2/4/2025 9:00:00 AM |
SB 57 SB 84 |
| 020425 OMB Senate Finance FY2025 Supplemental Budget Overview.pdf |
SFIN 2/4/2025 9:00:00 AM |
SB 57 SB 84 |
| SB 84 Lane vs OCS Civil Litigation Settlement Agreement (signed).pdf |
SFIN 2/4/2025 9:00:00 AM |
SB 84 |
| SB 84 02.13.25 SFIN OMB Supplemental Budget Follow-up to 02.04.25 Hearing.pdf |
SFIN 2/4/2025 9:00:00 AM |
SB 84 |