GENERAL SUBJECT(S): Overview of the Governor's FY 2000 Proposed Budget Time Meeting Convened: 9:00 Tape(s): SFC-99 # 7 Counter: Beginning: 000 - 502 End: PRESENT: x Senator Parnell Senator P. Kelly 9:05 x Senator Torgerson x Senator Leman x Senator Phillips x Senator Green Senator Donley x Senator Adams x Senator Wilken ALSO PRESENT: DAVID TEAL, DIRECTOR, DIVISION OF LEGISLATIVE FINANCE GINGER PATTON BLAISDALE, FISCAL ANALYST, LEGISLATIVE FINANCE TAPE LOG SPEAKER DISCUSSION 7(A) 000 8:59 Senator Parnell convened meeting. David Teal, Director, Leg. Finance He explained that Leg. Finance obtains information from Governor appropriation bills. Governor's Budget based on contingency. There are a number of technical changes as compared to what was reflected in last year's budget. Governor should not be creating new fund sources. His budget does include new fund sources. Motor fuel tax, pioneer home receipts and tobacco settlement. The federal government may require under the tobacco settlement that funds be used for medical purposes. Under the Governor's Budget funds should be held until the Legislature decides how they should be used. FY '99 budget is off. Supplemental requests may exceed $50 million. The Governor's Budget usually increases because of technical corrections. Also there is a question of AHFC receipts. Unobligated funds were to go into the general fund. $23.6 million left over from last year intended for the general fund. After speaking with Legal Services the word is "intend" only. AIDEA receipts of $18.8 are going into the capital budget. PCN count is not equal to the number of employees. They are new and reflected in the budget but may not be actually filled positions. Re: Operating Budget (increment of $73 million) Re: Split between formula programs and agency operations reflected at bottom of page 3. Re: Capital Budget as reflected on page 4. Total capital spending in the amount of $939 million which is a reduction of approximately $264 million from FY 99. Re: Four Dam Pool receipts Explains shortage to fund PCE. It will need some general funds to be fully funded. It is presumed this will come from general funds. Otherwise there is no backing for PCE. He feels detail makes it very clear the status of PCE. By law detail should have come in by second Monday of January. This is a matter of timing rather than anything else. Executive Budget Act calls for the Governor to submit all bill specifying new revenue. They do not have a bill for the motor fuel tax yet. No model legislation has been seen yet, but know it needs to be passed. Specifically, the Pioneer Homes, however it may not need new legislation. Six year capital plan is a requirement but has been only casually followed. They have not received a detailed copy of the materials to date. 7(A) 296 Would like to see an amendment to have the materials come in earlier in December. No documentation has been received on the capital budget yet. The Administration should have submitted quarterly report to the Legislature as to compliance. Senator Torgerson Requested information on the debt service. He feels it is not down. David Teal Concurs with Senator Torgerson. Tobacco, AHFC still outstanding. Debt service has not declined by much, however under general service they are declining somewhat. Senator Torgerson Asked about big numbers. David Teal Fisheries and PCE will be supplemental along with Corrections. Senator Kelly Queries about PCE. David Teal Confusion about this year. He is responding to FY 2000. He said there is funding for PCE this year. Senator Kelly He asked if we would run out of funding for PCE in the year FY 2001. David Teal Something is being done but not sure what. The source of funding for PCE does not have near enough to cover it. Also funding under the Four Dam Pool but will still leave the fund short. It can come under the capital budget or a fiscal note. If legislation is required for PCE it should be left out and be put in the way of a fiscal note, same as Longevity Bonus. Senator Kelly Re: AHFC bonds David Teal Explains the AHFC bond. Senator Adams He commented on PCE and said he has worked with Senator Pearce on this matter. He asked the number that should be put in on a statutory basis regarding number of employees. David Teal Would have to wait for the report from Office of Management and Budget. It is difficult to get information from the departments. Senator Adams Budget can be cut as much as we want but does not solve the problem facing us. He asked if Leg. Finance had any proposal to solving the problem facing them? David Teal He has no proposals to solve this problem. Senator Parnell Referred to page three of the handout and asked the State's total spending. David Teal $6.5 billion he responded Senator Adams It is easy to say the $6.5 billion. He said we have to look at this as general fund dollars. Must compare oranges to oranges. He would like it stated we are talking about general fund monies. Additionally, non-general funds should be specified. Senator Parnell It is correct that $6.5 billion is spent. An actual picture of what is being spent should be presented. He concurred with Senator Adams. Senator Wilken Asked that $25.6 million under the budget reduction be clarified at some time by Mr. Teal. Senator Leman Asked about welfare programs and wondered if there was an increment and how much it was. David Teal Would rather not misquote the amount. Senator Parnell Asked Mr. Teal to run through the figures once more. David Teal Explained the differences and where the bulk of the monies was. He explained off budget and said they noted them as general funds rather than listing them off the budget. In terms of fiscal gap there is no difference he explained. Gap is revenue versus expenditures. 7(A) 480 Oil revenues are down. Senator Adams Referred to SB 36 and other passed legislation of last year. Senator Kelly House and Senate took cuts that the Governor's office did not. Senator Parnell Thanked Mr. Teal and concluded the morning meeting. He reviewed the schedule for tomorrow morning at 9:00 a.m. 7(A) 502 Senator Parnell recessed meeting at approximately 9:45 a.m. SENATE FINANCE COMMITTEE LOG NOTES 01/25/99 Page 1