HOUSE FINANCE COMMITTEE February 2, 2026 1:33 p.m. 1:33:01 PM CALL TO ORDER Co-Chair Josephson called the House Finance Committee meeting to order at 1:33 p.m. MEMBERS PRESENT Representative Neal Foster, Co-Chair Representative Andy Josephson, Co-Chair Representative Calvin Schrage, Co-Chair Representative Jamie Allard Representative Jeremy Bynum Representative Alyse Galvin Representative Sara Hannan Representative Nellie Unangiq Jimmie Representative Elexie Moore Representative Will Stapp Representative Frank Tomaszewski MEMBERS ABSENT None ALSO PRESENT Stefanie Bingham, Director, Division of Administrative Services, Department of Administration; Aimee Devaris, Director, Division of Personnel, Department of Administration. PRESENT VIA TELECONFERENCE Bill Smith, State Chief Information Officer, Department of Administration; Kathleen Wallace, Director, Division of Motor Vehicles; Terrance Haas, Public Defender, Public Defender Agency, Department of Administration,; Bill Smith, State Chief Information Officer, Department of Administration. SUMMARY HB 263 APPROP: OPERATING BUDGET;AMEND;SUPP HB 263 was HEARD and HELD in committee for further consideration. HB 265 APPROP: MENTAL HEALTH BUDGET HB 265 was HEARD and HELD in committee for further consideration. OVERVIEW: STATEWIDE SALARY STUDY UPDATE BY THE DEPARTMENT OF ADMINISTRATION OVERVIEW: GOVERNOR'S FY 2027 BUDGET OVERVIEW BY THE DEPARTMENT OF ADMINISTRATION Co-Chair Josephson reviewed the meeting agenda. HOUSE BILL NO. 263 "An Act making appropriations for the operating and loan program expenses of state government and for certain programs; capitalizing funds; amending appropriations; making supplemental appropriations; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." HOUSE BILL NO. 265 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." ^OVERVIEW: GOVERNOR'S FY 2027 BUDGET OVERVIEW BY THE DEPARTMENT OF ADMINISTRATION 1:34:15 PM STEFANIE BINGHAM, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION, introduced the PowerPoint presentation, "Department of Administration FY2027 Governor's Budget Overview" dated February 2, 2026 (copy on file). She began on page 2 and gave an overview of the mission and organization of the Division of Administrative Services (DAS). She continued to slide 3 and the proposed FY 27 budget // 1:35:52 PM Representative Stapp appreciated the presenters // Ms. Bingham continued on slide 3 // DGF and // other funds were // up from 227.6 // primarily included interagency receipts // Ms. Bingham continued to slide 4 and the FY 27 budget by fund group. She continued to slide 5 and how funds were allocated by results delivery unit (RDU) // the largest share was in legal and advocacy services // central administrative services were at 11.6 million // Representative Hannan asked // hiring freeze // she understood that people at shared services but doing payroll at DOT, her position would move to DOT // she asked if her understanding was correct // Ms. Bingham responded that shared services was under the division of finance, while // those positions // Representative Hannan asked if anyone who had a job would be losing their job. Some vacant positions would need to be reevaluated and reapplied for // // the hiring freeze // Ms. Bingham responded // one position was being eliminated 1:40:31 PM Ms. Bingham continued on slide 6 // represented the FY 26 requests that were not funded // three requests for // Microsoft 365, AI projects, // DMV // prioritizing critical needs // Ms. Bingham advanced to slide 7 // represented the FY 26 items and their status // there were 450k UGF // eligibility // public defender agency, 1.5 million // municipality of anchorage for misdemeanor cases // rising software and contract cost // Co-Chair Josephson asked slide 7 were things that were funded Ms. Bingham responded that he was correct // Representative Stapp asked // asked about the fund source for the office of information technology // Ms. Bingham responded Representative Stapp asked about licensing and software costs // careful service prioritization // he asked what the words meant in regards to 1:44:14 PM Ms. Bingham responded BILL SMITH, STATE CHIEF INFORMATION OFFICER, DEPARTMENT OF ADMINISTRATION (via teleconference), responded that they tried to convey the licensing and software costs were driven by // increased utilization by the departments // as more employees used the services, the costs increased // Representative Hannan asked about slide 6 // denied expansion of IT capabilities // she asked if DMV benefited from the expansions Mr. Smith responded yes and no. DMV benefited // Representative Hannan // the fy 26 requests // were they are the OMB level or did DMV request it // not been put in the OMB budget // did DMV request it Ms. Bingham clarified that it was not for the IT capacity // position request //not re-requested // Co-Chair Josephson had a similar question about OPA and the public defender // he assumed that those would rise high // he hoped that OMB would be responsible // Ms. Bingham deferred the question // 1:49:52 PM Ms. Bingham continued on slide 8 // services were significant with a centralized // information technology / the smallest share was // 89.6k // commodities remained minimal // largest share was // legal and advocacy services for // Representative Galvin asked // the only line item with fewer funds for the following year was for APOC// inflationary costs // what the department had responded // Ms. Bingham would follow up Representative Allard asked how many employees were with APOC and the amount Ms. Bingham would follow up Representative Allard // asked if she could break it all down 1:53:03 PM Ms. Bingham continued on slide 9 // reducing recurring vacancies // Ms. Bingham continued to slide 10 // $2 million implementation // $7.7 million // Ms. Bingham moved to slide 11 // continuation of slide 9 // payroll position moving back to the agencies // Ms. Bingham advanced to slide 12 and a consolidated view // deconsolidation of shared services and movement of print services // Ms. Bingham continued to slide 13 // vacancy trends over multiple years // Co-Chair Josephson asked what a range 10 earned Ms. Bingham responded she would follow up Co-Chair Josephson thought it sounded like they were not happy Ms. Bingham responded that there was high turnover because they were moving up 1:57:39 PM Representative Hannan asked what a range 10 position at DMV be doing Ms. Bingham deferred the question KATHLEEN WALLACE, DIRECTOR, DIVISION OF MOTOR VEHICLES (via teleconference), responded that a range 10 DMV employee was frontline staff that helped customers // processed everything at the DMV // driver's licenses, etc// Representative Hannan was surprised because DMV generated money // she had always had a positive experience at DMV // the aptitude to interact with the public // she hoped that the salaries could increase // there was a lot of legalese // Representative Allard asked how much they made // Co-Chair Josephson asked if Ms. Wallace knew Ms. Wallace cost of 79,820 per year // 40,599 base salary Representative Allard asked if she misunderstood // Ms. Wallace responded that it included benefits and health insurance // Representative Allard asked what the salary was // Ms. Wallace responded 40,599 was the base salary // 2:02:44 PM Representative Tomaszewski asked how many moved up into a higher position Ms. Bingham noted that it would be hard to determine // Ms. Bingham advanced to slide 14 // 17 percent vacancy Co-Chair Josephson thought they were highly skilled Ms. Bingham responded that there were 3 vacant positions // Representative Galvin there was no lift for APOC // Ms. Bingham responded that they were small divisions // 2:06:11 PM Representative Stapp asked about the centralization of payroll // Ms. Bingham would make sure it was documented Ms. Bingham advanced to slid 15 // vacancy rate by component // Co-Chair Josephson asked // TERRANCE HAAS, PUBLIC DEFENDER, PUBLIC DEFENDER AGENCY, DEPARTMENT OF ADMINISTRATION, (via teleconference), // having enough lawyers to do the job// he was hiring lawyers at a quick pace // Co-Chair Josephson asked the same question to 2:09:37 PM BILL SMITH, STATE CHIEF INFORMATION OFFICER, DEPARTMENT OF ADMINISTRATION, (via teleconference), responded that at the end of the day, // he tried to have gratitude for the resources // Representative Allard asked // could he break down the vacancies // Ms. Bingham would get it over Representative Allard // the whole thing Ms. Bingham responded yes as much detail as possible 2:12:01 PM AT EASE 2:14:03 PM RECONVENED ^OVERVIEW: STATEWIDE SALARY STUDY UPDATE BY THE DEPARTMENT OF ADMINISTRATION Co-Chair Josephson introduced the second presentation // AIMEE DEVARIS, DIRECTOR, DIVISION OF PERSONNEL, DEPARTMENT OF ADMINISTRATION, introduced the PowerPoint presentation "Department of Administration Statewide Salary Study" February 2, 2026 (copy on file). Ms. Devaris continued to slide 2// the salary study was launched following an appropriation // increase applicant pools // Ms. Devaris continued to slide 3 // Representative Stapp asked // information from one study to implement Ms. Devaris responded that they learned a lot from the study // looking at the potential for making structural changes // Representative Stapp asked when they expected the implementation study to be completed Ms. Devaris responded that it was not another salary study, but a look at the scope // Representative Stapp // based off the study that was funded that took a long time to // he asked when should they expect finality to the lengthy process // Ms. Devaris responded that she understood the reason for asking the question. It would take a while to establish a plan and anticipated costs. 2:20:47 PM Co-Chair Josephson asked how many iterations of reports were provided by segal. The publishing date spanned 1.5 months // Ms. Devaris did not have the information Co-Chair Josephson asked // Ms. Devaris responded that on her second or third day of employment // Co-Chair Josephson asked if the report included anything about geographic differentials // Ms. Devaris // Co-Chair Josephson asked if the position was that // MS. Devaris did not have the info 2:23:19 PM Representative Galvin understood that there were not to be changes made for FY 27 // Ms. Devaris // in the realm of how an overall might be approached // some refining of data as they pursued changes // she did not believe the info would be useful // Representative Galvin asked what the costs of the updates were // Ms. Devaris responded that it was just a request for info // Representative Galvin three year old salary date would be appropriate enough to use for salary structure change // Ms. Devaris responded that they were two different things // she had a slide on the IT job class study // 2:27:01 PM Representative Bynum asked if she came from outside the division // Ms. Devaris responded that she was new to state service and had come from federal service // Representative Bynum asked if there was a strategy on how it would be employed// Ms. Devaris responded that the easy way to say it was that it was among a set of high priority areas of work // it would be a comprehensive project Representative Bynum noted that for clarity, // Ms. Devaris would be taking the lead in reviewing the results for the RFI // Representative Hannan asked // there was a lot of tension about the salary study // she was looking for a narrow scope // Ms. Devaris// Representative Hannan thought it was shocking that the commissioner was not present // knowing that there would be questions // the calculations would tell that it would cost / she requested that the commissioner bring the information 2:33:16 PM Co-Chair Josephson noted that there was concern that commissioner's Representative Allard appreciated the time// she was concerned // was the commissioner in Juneau or why did she not show up // Ms. Devaris responded that she did not think the commissioner was in town. She was asked to be present because it was anticipated that it was a short update // Representative Allard commented that commissioners were generally present // 2:35:09 PM Ms. Devaris continued to slide 4 // modernizing the hiring practices // competency based standards rather than // 10 agencies participating // Representative Galvin // Ms. Devaris responded that // competency based memo // Co-Chair Josephson asked if there was a way to explain the IT job class study // Ms. Devaris responded // slow recruitment or high turnover // part of the maintenance of the state's classification plan // help the state understand // Co-Chair Josephson the IT study meant that it was urgent // // WORD CRASHED// Representative Hannan asked questioned 2:42:53 PM Ms. Devaris responded // Co-Chair Schrage asked if there was a reason why the salary study could not be implemented without the classification study // Ms. Devaris // Co-Chair Schrage // it was challenging to understand hw to address // 2:46:08 PM Ms. Devaris responded that they were not talking about doing another study // there was a recruitment problem // responsibilities were out of alignment Representative Stapp // wondered what the term byzantine bureaucracy / Ms. Devaris responded that the salary study was brought to her in her job interview // Representative Stapp / made him feel better already // Representative Galvin appreciated // how much the classification study cost to put together Ms. Bingham responded that it was bout $2 million // she noted that it was a portion Representative Galvin noted that her recollection was about 9 // trying to help // what was returned was the need to get a new computer system // she was frustrated because putting money into paying more // it felt like the bureaucracy was creating a death spiral// she thought partnership would be helpful // she encouraged them to think about the timing // not able to get something done 2:53:39 PM Representative Bynum // 7.66 million to do the Ms. Bingham responded that it was the cost // across all agencies // the job classification study was not intended to pick apart the study, but routine maintenance // Work on one specific area at a time// not doing a job class study // separate bodies, one was for teamwork // Representative Bynum appreciated the clarification // he noted that he was also new to the job // impeding the ability to execute work and things Alaskans wanted the legislature to do. He stated he had two jobs, to uphold statute and to appropriate funding. // inability to execute // they heard about it in the media and in finance committees // one of the major problems they were told was the lack of individuals to do the work // 2:57:29 PM Representative Bynum continued //. He asked if they were executing anything in the study or waiting. He was very frustrated because Alaskans in his district were not receiving services they were supposed to receive. Ms. Devaris responded that she was not sure how to address the question. She shared that the department was looking at a plan to develop the results of the salary study and it would be a complex project that would take time. There were other mechanisms for addressing job class // retention and recruitment challenges // there could be many reasons for vacancies in certain areas, sometimes it was due to barriers to recruitment // 2:59:38 PM Representative Bynum understood Ms. Devaris had only been in the position for three months and that she was coming in to solve the problem. He was frustrated departments would come to the committee and tell them they did not have staff // Co-Chair Josephson appreciated the comment Ms. Devaris continued to slide 9. The division of personnel would discuss the results // determined whether the state could take on larger updates // Co-Chair Josephson noted that the second bullet was buzzling. The sentence came to whether they had the will to fund// whether the updates were viable. How was viability determined // Ms. Devaris responded that the state was required to maintain // receiving requests for salary studies because agencies felt something was out of alignment // taking on more occupational studies // Co-Chair Josephson the 9 job classes // there was some type of work that // received increases // the 9 classes used to be published publically but now required // the sensitivity was // incredible staff // the defined benefit route // HB 263 was HEARD and HELD in committee for further consideration. HB 265 was HEARD and HELD in committee for further consideration. Co-Chair Josephson reviewed the meeting agenda for the following day. ADJOURNMENT 3:05:47 PM The meeting was adjourned at 3:05 p.m.