HOUSE FINANCE COMMITTEE May 5, 2000 6:15 P.M. rd TAPE HHC-00 3 SS - 1, Side 1 rd TAPE HFC 00 3 SS - 1, Side 2 CALL TO ORDER Co-Chair Mulder called the House Finance Committee meeting to order at 6:15 p.m. PRESENT CO-CHAIR: Representative Mulder CO-CHAIR: Representative Therriault VICE-CHAIR: Representative Bunde Representative Davis Representative Phillips Representative Austerman Representative Williams Representative Foster Representative Davies Representative Grussendorf Representative Moses ALSO PRESENT Representative Beth Kerttula; Annalee McConnell, Director, Office of Management and Budget, Office of the Governor; Robert Poe, Commissioner, Department of Administration; Alison Elgee, Deputy Commissioner, Department of Administration; Wendy Redman, Vice President, Statewide Programs, University of Alaska. SUMMARY HB 3001 "An Act appropriating amounts to cover the fiscal year 2001 monetary terms of the collective bargaining agreements for employees of the University of Alaska and the fiscal year 2001 salary and benefit adjustments for university employees who are not members of a collective bargaining unit; appropriating amounts to cover the fiscal year 2001 monetary terms of all executive branch collective bargaining agreements and the fiscal year 2001 salary and benefit adjustments for elected officials, officers, and employees of the legislative, judicial, and executive branches who are not members of a collective bargaining unit; and providing for an effective date." CS HB 3001 (FIN) out of Committee with a "do pass" recommendation. HB 3002 "An Act relating to the compensation of certain public officials, officers, and employees not covered by collective bargaining agreements; and providing for an effective date." CS HB 3002 (FIN) out of Committee with a "do pass" recommendation and with a zero fiscal note by the House Finance Committee. HOUSE BILL NO. 3001 "An Act appropriating amounts to cover the fiscal year 2001 monetary terms of the collective bargaining agreements for employees of the University of Alaska and the fiscal year 2001 salary and benefit adjustments for university employees who are not members of a collective bargaining unit; appropriating amounts to cover the fiscal year 2001 monetary terms of all executive branch collective bargaining agreements and the fiscal year 2001 salary and benefit adjustments for elected officials, officers, and employees of the legislative, judicial, and executive branches who are not members of a collective bargaining unit; and providing for an effective date." HOUSE BILL NO. 3002 "An Act relating to the compensation of certain public officials, officers, and employees not covered by collective bargaining agreements; and providing for an effective date." Co-Chair Mulder provided members with a proposed committee substitute for HB 3001, 1-GH2084\D, 5/5/00 (copy on file). He explained that HB 3001 is the appropriation bill. Co-Chair Mulder provided members with a proposed committee substitute for HB 3002, 1-GH2085\K, 5/5/00 (copy on file). He explained that HB 3002 codifies law for employees not covered by a bargaining unit. The pay for non-covered employees is set out in statute and requires statutory changes. All state employees, except legislators are covered by the legislation. Non-covered statutory changes are paid for through HB 3001. The total obligation of funds is $19,051,000 dollars. He observed that the Administration assisted the Committee in locating funding sources. Co-Chair Mulder provided members with a spreadsheet detailing the funding sources (copy on file). He reviewed the spreadsheet. The appropriation includes lapsing balances from the Department of Environmental Conservation, Department of Education and Early Development, fuel adjustments in the Department of Transportation and Public Facilities, Disaster Fund balance in AHFC, Investment Loss Trust Fund, Longevity Bonus overstatement for FY00, school debt reduction, and tobacco receipts. He pointed out that $2 million dollars for school debt retirement were not needed. There was also $2 million dollars in excess tobacco receipts, which were dedicated for school debt reduction. There were $900 thousand dollars in excess commercial fisheries entry receipts. Medicare pro share savings were also used. The amount from the above funding sources amounted to $14,338,800 dollars. The FY01 budget goal was exceeded by $4,712.2 million dollars, which was added. Vice Chair Bunde MOVED to ADOPT proposed committee substitute for HB 3001, 1-GH2084\D, 5/5/00. There being NO OBJECTION, it was so ordered. ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR spoke in support of the legislation. She observed that the numbers are accurate. Representative Grussendorf referred to page 7. Ms. McConnell explained that the additional funding sources are made up of unexpended balances among seven projects. The projects have been completed. The Department of Environmental Conservation submitted the appropriations. Vice Chair Bunde referred to page 3, line 6, which identified $1.586 million dollars in additional funds. Ms. McConnell explained that pieces were gathered from lapses and updates on supplemental allocation to offset the new general funds that would be needed. This is the remaining amount needed to fund the contracts for the executive branch next year. Vice Chair Bunde reviewed page 8. He noted that Fish and Game appropriations were changed to other funds. Ms. McConnell observed that they would be commercial fisheries entry commission receipts (CFEC). A portion of the deferred maintenance in the capital budget was funded with CFEC receipts. The amendment takes the remaining fish and game general funds and replaces them with CFEC funds where appropriate. It is a one-time appropriation. Co-Chair Mulder estimated that CFEC receipts could be redirected to pay increased costs for the personnel costs in the Department of Fish and Game. Co-Chair Therriault expressed concern that use of the longevity bonus surplus would not trigger the need for a supplemental. Ms. McConnell observed that the original estimate was that $1.4 million in general fund dollars would be needed to fund the program. She assured Co-Chair Therriault that the current estimate is accurate and added that there is an excess in Y2K funding. Representative Phillips referred to page 9 and questioned funding for mariculture development. Ms. McConnell explained that the appropriations were made from CFEC receipts. Representative Foster asked if the reappropriation projects were completed. Ms. McConnell clarified that the projects have been completed. The reappropriation amount is generally used to fund the following year's projects. Funding has already been directed to the next year's projects. No project is at a disadvantage. Vice Chair Bunde MOVED to report CSHB 3001 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HB 3001 (FIN) was reported out of Committee with a "do pass" recommendation. Vice Chair Bunde MOVED to ADOPT 1-GH2085\K, 5/5/00. There being NO OBJECTION, it was so ordered. Co-Chair Mulder observed that sections 1 and 2 pertain to the non-covered employees. Section 3 is the salary schedule. He explained that a separate statute pertains to legislator's pay (and is not affected by the legislation). Representative Foster referred to page 4, line 13. He observed that legislators have not received any raises. He pointed out that state workers in Nome get 38% COLA. Representative Grussendorf emphasized that legislators spend long hours and felt that it was a shame that salaries were reduced due to political pressures. Representative Moses agreed that legislative salaries are not high enough. Representative G. Davis observed that commissioner's salaries are low. Representative J. Davies questioned if a fiscal note would be needed to provide compensation for non-covered university personnel. Co-Chair Mulder clarified that they would be covered under HB 3001, page 6, lines 11 -25. There is no fiscal note for HB 3001 since it is an appropriation bill. Co-Chair Mulder continued to reviewed the legislation. Representative Phillips pointed out that legislators do not receive the bonus. Representative G. Davis noted employees would receive $50 dollars for every per pay period that they were in employment. Co-Chair Mulder observed that commissioners would receive the bonus and the adjustments that keeps them on track with the collective bargaining agreements. Co-Chair Therriault questioned if the legislature's action would obligate future legislatures. Co-Chair Mulder clarified that a separate appropriation would not be needed to fund the contracts in the future. A statement in the language section would be needed indicating that the contracts are being accepted or rejected during the second and third years. The allocation would be included in the personal service line. Contracts would be evaluated and revisited each year by each legislature. Co-Chair Mulder clarified that employees would not receive court leave unless they were on jury duty or called to testified. Representative J. Davies asked if the Department was comfortable with the bill. ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF ADMINISTRATION acknowledged that the department is comfortable with HB 3002. WENDY REDMAN, VICE PRESIDENT, STATEWIDE PROGRAMS, UNIVERSITY OF ALASKA spoke in support of the legislation. She stressed the importance of the contracts in the recruitment of new employees. Co-Chair Mulder noted that the titles of the bills are sufficiently tight to only pertain to the issues contained in the bill. Representative J. Davies asked about the effective date change. He referenced page 10, HB 3001. Discussion ensued regarding the retroactive date. Ms. McConnell clarified that the retroactive date assures that the Medicaid pro-share is included. Co-Chair Mulder noted that it clarifies that the legislation would be retroactive immediately. Representative Grussendorf MOVED to report CS HB 3002 (FIN) out of Committee with the attached fiscal note. There being NO OBJECTION, it was so ordered. CS HB 3002 (FIN) out of Committee with a "do pass" recommendation and with a zero fiscal note by the House Finance Committee. ADJOURNMENT The meeting was adjourned at 6:55 p.m.