MINUTES SENATE FINANCE COMMITTEE March 31, 2000 9:19 AM TAPES SFC-00 # 72, Side A CALL TO ORDER Co-Chair Sean Parnell convened the meeting at approximately 9:19 AM. PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell, Senator Al Adams, Senator Pete Kelly, Senator Loren Leman, Senator Green, Senator Phillips and Senator Gary Wilken. Also Attending: SUMMARY INFORMATION HB 312-APPROPRIATIONS: OPERATING BUDGET Committee members made comments on the committee substitute as amended and the bill was reported from Committee. HB 313-APPROPRIATIONS: MENTAL HEALTH Co-Chair Parnell announced the Committee would be taking up this bill early in the following week. CS FOR HOUSE BILL NO. 312(FIN) am(brf sup maj fld)(efd fld) "An Act making and amending appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds." Co-Chair Parnell explained to members of the public the process of setting a budget each year, describing the operating budget, the capital budget and the supplemental budget. Co-Chair Parnell noted the operating budget the Committee would report out at this meeting contains approximately $105 million less in agency general fund spending than the budget proposed by the governor. He added that the general fund agency reduction under the budget was approximately $35 million. He qualified that these figures did not include state payment for debt service, which would add approximately $11 million. Co-Chair Parnell expressed that when all the budget bills passed, he believed the legislature would be on-track for spending at least $30 million less in general fund spending than in the current year. Co-Chair Parnell pointed out increases in the FY 01 budget emphasizing education and the protection and development of children as well as public safety and transportation. He stated that many of the increases were "pass-through" to the citizens of Alaska and to local governments rather than state agencies. As an example, he said the permanent fund dividends would increase by $237 million. Co-Chair Parnell next talked about education funding stressing that the committee substitute fully funds the Kindergarten through 12th grade funding formula and also provides additional funds for learning opportunity grants. He declared the Committee's intent that the grant funds go directly into the classroom. He continued that the budget increases university funding to the classroom. The next area of budget increases that Co-Chair Parnell addressed were the direct payments to families for foster care and subsidized adoptions. He stated these increases were to insure that children move off of foster care more quickly and into permanent homes. Co-Chair Parnell continued by noting the new funding for additional state troopers and for fish and wildlife protection officers. Many of these positions serve the rural areas of the state, he indicated, as the urban areas have their own local police department. Co-Chair Parnell added that the budget provides more funding for Department of Transportation and Public Facilities' maintenance stations so that more roads are plowed and repaired. He summarized that these increases reflected the identified priorities as established by the Committee and realized through the efforts in the budget subcommittees to work with the state agencies. Co-Chair Parnell referenced a spreadsheet prepared by the Division of Legislative Finance showing the general fund appropriation. [Copy on file.] He pointed out the $35.7 million reduction. Co-Chair Parnell explained the FY 01 budget funds the additional debt service payment using general fund dollars as it always has. He noted the House of Representatives version of the budget transferred Alaska Industrial Development and Export Authority (AIDEA) funds to pay the debt service. He shared that the Senate intended to utilize the AIDEA funds in the capital budget, as was the tradition. Co-Chair Parnell commended the Committee members and staff for their efforts. Co-Chair Parnell asserted that the budget process was an "on-going conversation". Senator Adams appreciated the work of the Committee. He noted that the public would look at the total spending package. Even though a $35 million reduction was made, he remarked that there was also a shifting of funds, which was important to note because some might say the budget was not cut enough. Senator Adams commented that there were still some areas of concern with regards to the committee substitute. He listed the Public Defenders Agency and the Office of Public Advocacy as examples. He declared that someone has to look out for the needs of the disadvantaged and the poor and that these Alaskans also need equal representation and access to justice. Senator Adams appreciated the additional funds for the Headstart program but said there should have been more funds. He expressed that early education can make Alaskans better citizens. Senator Adams next addressed the Village Public Officers Program and his attempts to garner compatible salaries for these positions. He also argued in favor of working salaries for school bus drivers, support for municipal assistance and revenue sharing and the Department of Corrections. Senator Adams then began speaking to the children and families' area of the budget where he thought the Committee did an excellent job. He said foster care, the Balloon Project, childcare and infant learning all benefit from this budget. Senator Adams declared, "There is nothing wrong with being a liberal at heart." Senator Adams also applauded the Committee for fully funding education. Regarding funding for the University of Alaska, Senator Adams asserted that the cup was half full and that at least some of the needed funds were provided, which he appreciated. Senator Adams referred to an amendment he had offered that would cut many positions located in Anchorage. He said that many people wondered how the state could have such a large number of employees earning a total of $1.2 billion in Anchorage. He surmised that government needed to be reduced. Senator Adams remarked that he budget process this year reflected good cooperation between the budget subcommittees and the Minority. He expressed the staff had done an excellent job relaying information. Senator Adams stated that he would vote in favor of moving the bill from Committee although he still had some concerns that Minority would bring before the full Senate. Senator Leman also appreciated the efforts that went into the bill. He stated that the thought the total package spent more money than he would have preferred but that no budget is ever perfect and that this bill accommodates many needs. He noted that many of Senator Adams's amendments were adopted and thus added funding. Senator Leman said he would support the motion to report the budget from Committee and he looked forward to continued work in the Conference Committee. Senator P. Kelly commented on the budget process saying that many people do not understand the tremendous amount of work done by legislative staff. He thanked his aide, Laura Glaiser personally. He talked about the long hours and the mistakes avoided through the hard work of staff members. Senator Wilken associated himself with the previous remarks. Co-Chair Torgerson offered a motion to report from Committee, SCS CS HB 312, 1-LS1304/I, as amended by the Senate Finance Committee. There was no objection and the bill was REPORTED OUT. ADJOURNED Co-Chair Parnell recessed the meeting at 9:30 AM. [Note: The Committee reconvened to consider other bills. Minutes for that portion of the meeting are separate.] SFC-00 (5) 3/31/00