DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS The House Finance Subcommittee on the Department of Community and Regional Affairs consists of Chair MacLean with members Representatives Olberg, Williams, B. Davis and Brice. Co-Chair MacLean noted that the Department of Community and Regional Affairs had 42 positions transferred in the FY 93 Operating Budget. The Governor's FY 94 proposed budget for the Department of Community and Regional Affairs is $124,406.3 million dollars. Total funds represents a 15.6 percent decrease below FY 93 Authorized. The General Fund request is 21.1 percent below FY 93 Authorized. Co-Chair MacLean emphasized that the Subcommittee's intent is to increase support for service delivery in remote regions of the State. She noted that the Subcommittee reduced all designated grants. She provided members with the Transaction Summary for the House (Attachment 2). She reviewed the Subcommittee's proposed reductions: * Administrative Services - <$75.0> thousand dollars This reduction will eliminate at least 2 full time equivalent positions in administrative services. Co-Chair MacLean stated that the Subcommittee approved intent language regarding Reimbursable Service Agreement (RSA) (Attachment 3). She stressed that the Subcommittee is adamantly opposed to the transfer of funding from other areas of the Department by use of a RSA, to reinstate reductions made by the Legislature. * Designated Grants - <$160.3> thousand dollars Designated Grants were classified for reductions. 4 Gaming/Training Programs - 30 percent People Count - 15 percent Native Cultural Activities - 10 percent Life, Health and Safety - 10 percent * Training and Development/Travel - $20.0 Twenty thousand dollars was added for travel of local government specialists at the eight regional offices, to improve outreach to communities. It is the intention of the Subcommittee that additional travel money above that which is allocated in the Governor's proposal be equitably distributed among all regional offices. * Rural Utility Business Advisors (RUBA) - <$175.0 thousand dollars> The authorization of interagency receipts was reduced. Authorization was contingent upon a request of $1 million dollars in the Department of Environmental Conservation's capital budget. The capital appropriation has been reduced to $500.0 thousand dollars. * Community Development Assistance - <93.9 thousand dollars> The request for a deputy director position in Anchorage was denied. Three positions were approved. Co-Chair MacLean noted that the Subcommittee adopted intent language for the Day Care Assistance Program, urging the Department to request a supplemental if the program is short in FY 94. Representative Brown asked Co-Chair MacLean to reiterate the classification of reductions to designated grants. She asked why Native Cultural grants were given priority over Gaming and Training. Co-Chair MacLean declined to respond. Representative Brown expressed her concern with reductions to Alaska Legal Services. She asked if the Subcommittee considered restoring Alaska Legal Services to the FY 92 level. Co-Chair MacLean stated that the Subcommittee did consider increasing this component. She added that under the 1 percent reduction plan the Subcommittee did not feel the component could be increased. An office in Unalaska will remain closed. Representative Therriault asked if there is a criteria for 5 designated grants. REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS clarified that designated grants are at the discretion of the Legislature. Some grants have been in the Department's budget for eight years. Co-Chair MacLean provided members with a history of designated grants (Attachment 4). Representative Parnell asked for a clarification of the reductions to designated grants. Co-Chair MacLean clarified that Perseverance Theatre was reduced by 30 percent. Alaska Native Arts was reduced by 10 percent. Alaska Special Olympics and Arctic Winter Games were reduced 30 percent. Co-Chair MacLean MOVED to adopt the Intent Language, Attachment 3. There being NO OBJECTION, it was so ordered. Co-Chair MacLean noted that the Department has submitted budget amendments totaling $325.2 thousand dollars. The budget amendments were adopted but are not reflected in Attachment 2. Representative Brown observed that the Department estimates that the Subcommittee's proposed funding level for Day Care Assistance would result in 340 children or 240 families that would not be served. (Tape Change, HFC 93-43, Side 2) Co-Chair MacLean justified the Subcommittee's reduction to Day Care Assistance. She noted that Day Care Assistance is pure general fund dollars. She gave statistics regarding Child Care Programs: * Daycare Assistance Programs: subsidies to low income; parents has $11,173.9 million dollars left in the current year. * Funding has not been changed for Child Care Subsidy Grants, FSA Entitlement Program, At Risk Assistance Program and Block Grant Programs. Co-Chair MacLean emphasized that the funding level for Day Care Assistance has remained at the Governor's proposed level. Co-Chair MacLean observed that there was excess federal authorization for FY 93 because the State received two years of At-Risk funding in FY 92. In FY 92 $2.5 million dollars in child care was lapsed. All applicants were served. The Department voluntarily reduced $500.0 thousand dollars from 6 Child Care in FY 94. She asserted that the Department can request a supplement if the FY 94 demand exceeds the appropriation. Representative Brown referred to a letter from John Walsh, Deputy Director, Department of Community and Regional Affairs to Representative Bette Davis, dated March 3 1993. She quotes the letter as stating: "Should the FY 94 budget be approved as proposed, using an estimate of $345.00 per month for a child, 340 children would not be served... Based upon an average ratio of children to families, this reduction would impact approximately 240 families... As I stated during the overview, the Department was unaware of the marked increase in enrollment at the time we prepared our FY 94 budget document, nor do we have access to leading economic indicators that correlate to changes in child care demand." Representative Brown alleged that the Day Care Assistance Program will be under-funded. Co-Chair MacLean MOVED to adopt the Subcommittee's proposals as contained in Attachment 2. Co-Chair Larson clarified, for Representative Grussendorf, that the Subcommittee on Formula Programs will make recommendations for formula programs to the full House Finance Committee. Representative Brown noted her OBJECTION to not funding the Home Owners Property Tax Exemption and Renters Rebate Program. Co-Chair MacLean reiterated that formula programs were not considered by the Subcommittee. There being NO OBJECTION, the Subcommittee's proposals for the Department of Community and Regional Affairs non-formula programs were adopted and incorporated into HB 55.