Legislature(2015 - 2016)SENATE FINANCE 532

03/12/2015 09:00 AM FINANCE

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09:05:03 AM Start
09:06:27 AM SB27
09:06:32 AM Overview: Fy 16 Department of Health and Social Services
10:19:19 AM Overview: Fy 16 Budget Department of Transportation and Public Facilities
11:17:57 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 27 Presentation: Overview FY17 Operating Budget TELECONFERENCED
Departments: Transportation and Public
Facilities, and Health and Social Services
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 27                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs,    capitalizing   funds,    making                                                                    
     reappropriations, and 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."                                                                                          
                                                                                                                                
9:06:27 AM                                                                                                                    
                                                                                                                                
^OVERVIEW: FY 16 DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                                     
                                                                                                                                
9:06:32 AM                                                                                                                    
                                                                                                                                
VALERIE  DAVIDSON, COMMISSIONER,  DEPARTMENT  OF HEALTH  AND                                                                    
SOCIAL    SERVICES   (DHSS),    acknowledged   the    former                                                                    
commissioner of DHSS, Bill Streur.                                                                                              
                                                                                                                                
Co-Chair  Kelly  appreciated   the  acknowledgement  of  the                                                                    
difficulties of commissioners.                                                                                                  
                                                                                                                                
Commissioner  Davidson discussed  her career  background and                                                                    
personal life.                                                                                                                  
                                                                                                                                
Commissioner Davidson discussed  the PowerPoint, "Department                                                                    
of  Health  and Social  Services,  Senate  Finance, FY  2016                                                                    
Department Overview" (copy on file).                                                                                            
                                                                                                                                
Commissioner   Davidson   highlighted   slide   2,   "Alaska                                                                    
Department  of  Health   and  Social  Services  Organization                                                                    
Chart." She  shared that the organizational  chart displayed                                                                    
the deputies, who were also present at the meeting.                                                                             
                                                                                                                                
Co-Chair Kelly asked for more  information about the budgets                                                                    
attached to each division.                                                                                                      
                                                                                                                                
Commissioner Davidson  shared the budget allocations  of the                                                                    
DHSS positions displayed on slide 2:                                                                                            
                                                                                                                                
     Chief Medical Officer and Public Health Director                                                                           
                                                                                                                                
          Total Budget: $138.502 million                                                                                        
               UGF: $53.561 million                                                                                             
                                                                                                                                
          Total positions: 488                                                                                                  
                                                                                                                                
     Medicaid and Health Care Policy                                                                                            
                                                                                                                                
          Total budget: $1.958,127 billion                                                                                      
               UGF: $860.488 million                                                                                            
                                                                                                                                
          Total positions: 1.314                                                                                                
                                                                                                                                
     Human Resources; Regulations; Health Information                                                                           
     Technology                                                                                                                 
                                                                                                                                
          Total budget: $16.869 million                                                                                         
               UGF: $4.438 million                                                                                              
                                                                                                                                
          Total positions: 58                                                                                                   
                                                                                                                                
     Family, Community, and Integrated Services                                                                                 
                                                                                                                                
          Total budget: $533.954 million                                                                                        
               UGF: $311.555 million                                                                                            
                                                                                                                                
          Total positions: 1.579                                                                                                
                                                                                                                                
     Assistant Commissioner for Finance and Management                                                                          
     Services                                                                                                                   
                                                                                                                                
          Total budget: $44.869 million                                                                                         
               UGF: $23.606 million                                                                                             
                                                                                                                                
          Total positions: 222                                                                                                  
                                                                                                                                
9:11:25 AM                                                                                                                    
                                                                                                                                
SANA EFIRD,  ASSISTANT COMMISSIONER, FINANCE  AND MANAGEMENT                                                                    
SERVICES,   DEPARTMENT  OF   HEALTH  AND   SOCIAL  SERVICES,                                                                    
discussed slide  3, "Department Total FY  2014 Actuals." She                                                                    
stated  that the  slide showed  the department  total FY  14                                                                    
actuals, and  how the  budget was  distributed in  UGF, DGF,                                                                    
other  funds, and  federal funding  sources. She  noted that                                                                    
unrestricted GF was  49 percent of the  Department of Health                                                                    
and Social  Services (DHSS) budget,  45 percent  was federal                                                                    
funds, and the  remaining funding sources made  up a smaller                                                                    
percentage.                                                                                                                     
                                                                                                                                
                                                                                                                                
Ms. Efird addressed slide 4,  "FY 2014 Actuals by Division."                                                                    
The slide showed the FY 14  actuals, and were broken down by                                                                    
division. She noted  that Medicaid Services made  up over 61                                                                    
percent  of  the  DHSS  budget;  and  the  other  division's                                                                    
percentages were also displayed.                                                                                                
                                                                                                                                
Ms.  Efird highlighted  slide 5,  "DHSS  FY 2015  Management                                                                    
Plan." The  slide showed  all funds with  a total  budget of                                                                    
$2.7 billion,  with Medicaid budgeted  at $1.7  billion. She                                                                    
furthered  that  there  were  other  formula  grant  benefit                                                                    
programs for  $292.9 million,  which was  11 percent  of the                                                                    
budget.  The non-formula  grants and  benefits program  were                                                                    
budgeted  at $190.7  million,  which was  7  percent of  the                                                                    
budget.  The  additional  non-formula other  pieces  of  the                                                                    
budget  was $539.5  million,  which was  20  percent of  the                                                                    
budget. She stressed that 80  percent of the DHSS budget was                                                                    
included in the grants and benefit line.                                                                                        
                                                                                                                                
Ms. Efird looked at slide 6, "Formula Programs":                                                                                
                                                                                                                                
     Formula Program  - a program with  specific eligibility                                                                    
     standards   which  guarantees   a  specific   level  of                                                                    
     benefits   for  any   recipient   who  qualifies.   The                                                                    
     eligibility  standards and  benefits must  be based  in                                                                    
     statute and/or regulations.                                                                                                
                                                                                                                                
Ms. Efird discussed slide 7, "Formula Programs":                                                                                
                                                                                                                                
     Public Assistance                                                                                                          
                                                                                                                                
          •Adult Temporary Assistance Program                                                                                   
          •Adult Public Assistance                                                                                              
          •Child Care Benefits                                                                                                  
          •General Relief Assistance                                                                                            
          •Tribal Assistance Programs                                                                                           
          •Senior Benefits Payment Program                                                                                      
          •PFD Hold Harmless                                                                                                    
          •Energy Assistance Program                                                                                            
                                                                                                                                
                                                                                                                                
Senator  Dunleavy looked  at slide  6, and  wondered if  the                                                                    
programs were imbedded in state  law. Ms. Efird replied that                                                                    
the programs were in statute.                                                                                                   
                                                                                                                                
9:15:43 AM                                                                                                                    
                                                                                                                                
Senator  Dunleavy  wondered if  the  poverty  rates were  in                                                                    
state statutes.   Ms. Efird  replied that the  poverty rates                                                                    
were in federal law.                                                                                                            
                                                                                                                                
9:16:15 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly  explained that the percentage  was chosen by                                                                    
the state. The  state existed somewhere in the  range set by                                                                    
the  state.  Ms.  Efird  agreed   and  furthered  that  some                                                                    
programs  had additions  above  the  federal guideline.  She                                                                    
explained that the federal portion  of the energy assistance                                                                    
program  provided  funding for  up  to  100 percent  of  the                                                                    
poverty level.  The state  energy assistance  program picked                                                                    
up from the 151 to 225 percent level.                                                                                           
                                                                                                                                
Senator Dunleavy  asked if  the state  had any  control over                                                                    
costs,  allocations,  and  benefits.  Ms.  Efird  agreed  to                                                                    
provide that  information. She stated that  each program was                                                                    
different.                                                                                                                      
                                                                                                                                
Co-Chair  Kelly  queried the  name  of  the fuel  assistance                                                                    
program. Ms. Efird replied that  the federal program was the                                                                    
Low Income Energy Assistance Program  (LIEAP), and the state                                                                    
program was the Alaska Heating Assistance Program (AKHAP).                                                                      
                                                                                                                                
Co-Chair Kelly wondered  if there was an  adjustment for the                                                                    
lower fuel costs, or if it  was only a percentage. Ms. Efird                                                                    
responded that  the eligibility criteria  was based  on many                                                                    
different criteria.                                                                                                             
                                                                                                                                
Co-Chair Kelly felt that the  question could be addressed in                                                                    
subcommittee.   Ms.   Efird   agreed  to   provide   further                                                                    
information.                                                                                                                    
                                                                                                                                
Senator Bishop agreed that the energy issue was important.                                                                      
                                                                                                                                
Ms. Efird continued to discuss slide 7:                                                                                         
                                                                                                                                
     Medicaid Services                                                                                                          
                                                                                                                                
          •Behavioral Health Medicaid Services                                                                                  
          •Children's Medicaid Services                                                                                         
          •Adult Preventive Dental Medicaid Services                                                                            
          •Health Care Medicaid Services                                                                                        
          •Senior/Disabilities Medicaid Services                                                                                
                                                                                                                                
     Children's Services                                                                                                        
                                                                                                                                
          •Subsidized Adoptions/Guardianship                                                                                    
          •Foster Care Special Need                                                                                             
          •Foster Care Augmented Rate                                                                                           
          •Foster Care Base Rate                                                                                                
                                                                                                                                
Ms. Efird highlighted slide 8, "Service Population":                                                                            
                                                                                                                                
    Priority 1: Health and Wellness Across the Lifespan                                                                         
                                                                                                                                
          Core Service 1.1                                                                                                      
                                                                                                                                
               Protect and promote the health of Alaskans                                                                       
                                                                                                                                
          Core Service 1.2                                                                                                      
                                                                                                                                
               Provide quality of life in a safe living                                                                         
               environment for Alaskans                                                                                         
                                                                                                                                
     Priority 2: Health Care Access Delivery and Value                                                                          
                                                                                                                                
          Core Service 2.1                                                                                                      
                                                                                                                                
               Manage health care coverage for Alaskans in                                                                      
               need                                                                                                             
                                                                                                                                
          Core Service 2.2                                                                                                      
                                                                                                                                
               Facilitate access to affordable health care                                                                      
               for Alaskans                                                                                                     
                                                                                                                                
     Priority 3: Safe and Responsible Individuals, Families                                                                     
     and Communities                                                                                                            
                                                                                                                                
          Core Service 3.1                                                                                                      
                                                                                                                                
               Strengthen Alaska families                                                                                       
                                                                                                                                
          Core Service 3.2                                                                                                      
                                                                                                                                
               Protect vulnerable Alaskans                                                                                      
                                                                                                                                
          Core Service 3.3                                                                                                      
                                                                                                                                
               Promote    personal     responsibility    and                                                                    
               accountable decisions by Alaskans                                                                                
                                                                                                                                
Vice-Chair  Micciche stressed  that the  services that  DHSS                                                                    
provided were the most important services for Alaskans.                                                                         
                                                                                                                                
Ms. Efird discussed slide 9,  "State of Alaska Department of                                                                    
Health and  Social Services." The page  depicted the process                                                                    
that  the  department had  undergone  over  the most  recent                                                                    
three years. She shared that  the previous administration in                                                                    
DHSS  had worked  on  performance  based accountability  and                                                                    
budgeting   exercises.   The   slide   depicted   the   DHSS                                                                    
priorities: health and wellness  across the lifespan; health                                                                    
care  access delivery  and value;  and safe  and responsible                                                                    
individuals,  families,  and  communities. She  pointed  out                                                                    
DHSS  had  determined  seven core  services  for  vulnerable                                                                    
Alaskans: 1) protect and promote  the health of Alaskans; 2)                                                                    
provide quality  of life  in a  safe living  environment for                                                                    
Alaskans;  3) manage  health care  coverage for  Alaskans in                                                                    
need;  4) facilitate  access to  affordable health  care for                                                                    
Alaskans;   5)  strengthen   Alaska  families;   6)  protect                                                                    
vulnerable Alaskans; 7)  promote personal responsibility and                                                                    
accountable decisions by Alaskans.  Each division within the                                                                    
department  examined their  budget, and  must determine  how                                                                    
each  division fit  into the  department. The  divisions had                                                                    
determined how  they contributed to each  core services, and                                                                    
the dollar amount for each effort.                                                                                              
                                                                                                                                
9:23:30 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:25:15 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:25:35 AM                                                                                                                    
                                                                                                                                
Ms. Efird continued  to discuss slide 9.  She explained that                                                                    
DHSS  had  worked  for  three  years, and  was  now  at  the                                                                    
critical point in determining what  data would show that the                                                                    
department  was  achieving the  results  to  meet each  core                                                                    
service. The divisions  were working on the  correct data to                                                                    
collect and analyze the information  to ensure that DHSS was                                                                    
meeting the core services.                                                                                                      
                                                                                                                                
Co-Chair Kelly  felt that  the titles  and grants  should be                                                                    
set apart in  order for the chairman of  the subcommittee to                                                                    
analyze their growth over time.                                                                                                 
                                                                                                                                
Vice-Chair Micciche echoed Co-Chair Kelly's sentiments.                                                                         
                                                                                                                                
Ms. Efird stated that the grant discussion should include                                                                       
an understanding of the performance measures within the                                                                         
specific grants and awards.                                                                                                     
                                                                                                                                
Commissioner Davidson highlighted slide 10, "Health and                                                                         
Social Services, Eight Divisions":                                                                                              
                                                                                                                                
     Alaska Pioneer Homes | Vickie Wilson (Acting Director)                                                                     
                                                                                                                                
          •649 Positions                                                                                                        
          •$62,323.1 - FY2015 Management Plan                                                                                   
          •2.31 percent of DHSS FY2015 Operating Budget                                                                         
          •Provide the highest quality of life in a safe                                                                        
          home environment for older Alaskans and Veterans.                                                                     
                                                                                                                                
     Behavioral Health | Al Wall (Director)                                                                                     
                                                                                                                                
          •374 Positions                                                                                                        
          •$141,942.4 - FY2015 Management Plan                                                                                  
          •5.27 percent of DHSS FY2015 Operating Budget                                                                         
          •Manage    an    integrated   and    comprehensive                                                                    
          behavioral health system based on sound policy,                                                                       
          effective practices and partnerships.                                                                                 
                                                                                                                                
Commissioner Davidson addressed slide 11, "Health and                                                                           
Social Services, Eight Divisions":                                                                                              
                                                                                                                                
     Office of Children's Services | Christy Lawton                                                                             
     (Director)                                                                                                                 
          •509 Positions                                                                                                        
          •$143,709.6 - FY2015 Management Plan                                                                                  
          •5.34 percent of DHSS FY2015 Operating Budget                                                                         
          •Prevent and respond to child maltreatment in                                                                         
          order to ensure safe children and strong                                                                              
          families.                                                                                                             
                                                                                                                                
     Health Care Services | Margaret Brodie (Director)                                                                          
                                                                                                                                
          •131 Positions                                                                                                        
          •$24,391.6 - FY2015 Management Plan                                                                                   
          •0.91 percent of DHSS FY2015 Operating Budget                                                                         
          •Manage health care coverage for Alaskans in                                                                          
          need.                                                                                                                 
                                                                                                                                
9:30:18 AM                                                                                                                    
                                                                                                                                
Commissioner  Davidson  addressed   slide  12,  "Health  and                                                                    
Social Services, Eight Divisions":                                                                                              
                                                                                                                                
     Division of Juvenile Justice | Karen Forrest                                                                               
     (Director)                                                                                                                 
                                                                                                                                
          •503 Positions                                                                                                        
          •$58,824.7 - FY2015 Management Plan                                                                                   
          •2.18 percent of DHSS FY2015 Operating Budget                                                                         
          •Hold  juvenile  offenders accountable  for  their                                                                    
          behavior,  promote the  safety and  restoration of                                                                    
          victims and communities,  and assist offenders and                                                                    
          their  families in  developing  skills to  prevent                                                                    
          crime.                                                                                                                
                                                                                                                                
     Division of Public Assistance | Ron Kreher (Acting                                                                         
     Director)                                                                                                                  
                                                                                                                                
          •566 Positions                                                                                                        
          •$331,226.7 - FY2015 Management Plan                                                                                  
          •12.30 percent of DHSS FY2015 Operating Budget                                                                        
          •Provide self-sufficiency and provide for basic                                                                       
          living expenses to Alaskans in need.                                                                                  
                                                                                                                                
9:31:08 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  asked  how   the  Division  of  Public                                                                    
Assistance helps  to provide  self-sufficiency. Commissioner                                                                    
Davidson replied  that one  of the  requirements of  many of                                                                    
the  programs   administered  by  the  Division   of  Public                                                                    
Assistance  included requirements  that required  recipients                                                                    
to seek work, and included paths to self-sufficiency.                                                                           
                                                                                                                                
Vice-Chair  Micciche shared  that he  would like  divide the                                                                    
beneficiaries  from those  that  were temporarily  receiving                                                                    
assistance  from those  that  could  not physically  support                                                                    
themselves.                                                                                                                     
                                                                                                                                
Senator  Bishop  shared  that   shared  that  DHSS  and  the                                                                    
Department of  Labor and  Workforce Development  (DLWF) work                                                                    
together on public assistance. He  felt that DLWF could also                                                                    
provide further information.                                                                                                    
                                                                                                                                
Senator  Dunleavy wondered  how long  people were  on public                                                                    
assistance. He also wanted to  understand why the individual                                                                    
remained  on public  assistance  for an  extended period  of                                                                    
time.                                                                                                                           
                                                                                                                                
Co-Chair Kelly felt  that DHSS was in  a difficult position,                                                                    
because   the  department   provided   services  that   were                                                                    
statutorily  required to  distribute to  the population.  He                                                                    
shared that he had some  individuals in his family that were                                                                    
almost  pursued  by  the department  to  take  advantage  of                                                                    
services.  He  wondered  if  there  were  discussions  about                                                                    
whether the  department was creating  a problem  by outreach                                                                    
to the  population. He  stressed that he  did not  want more                                                                    
people on  welfare. Commissioner Davidson agreed  to provide                                                                    
further information.                                                                                                            
                                                                                                                                
Co-Chair  Kelly wondered  if the  five-year  window for  the                                                                    
Temporary Assistance  for Needy Families (TANF)  program was                                                                    
still  in existence.  Commissioner  Davidson responded  that                                                                    
the maximum time that a person  was eligible for TANF was 60                                                                    
months  in their  lifetime. The  average length  of stay  in                                                                    
TANF in Alaska was approximately 26 months.                                                                                     
                                                                                                                                
9:35:50 AM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly wondered  if  the goal  of  the Division  of                                                                    
Public   Assistance   Division   was   self-sufficiency   or                                                                    
providing  basic  living   expenses.  Commissioner  Davidson                                                                    
replied that the  goal was to provide  basic living expenses                                                                    
in order to move the individual to self-sufficiency.                                                                            
                                                                                                                                
Co-Chair Kelly felt that the  two goals were in conflict. He                                                                    
wondered  how  DHSS  would navigate  between  the  seemingly                                                                    
opposed objectives.                                                                                                             
                                                                                                                                
Ms. Efird stated  that there were varying  degrees of Public                                                                    
Assistance programs.  She explained that there  was an adult                                                                    
temporary   public  assistance   program  for   able  bodied                                                                    
Alaskans  that needed  help  to find  and  secure jobs.  She                                                                    
furthered that  there were other  programs for  the elderly,                                                                    
disabled, and blind individuals that  did not have a goal of                                                                    
self-sufficiently.                                                                                                              
                                                                                                                                
Senator Dunleavy stressed that  the committee was attempting                                                                    
to  determine whether  the  mission  matched the  activities                                                                    
within   the  department.   He  felt   that  there   was  an                                                                    
overarching  philosophy to  not needing  the department.  He                                                                    
looked at  slide 9,  and looked at  priority 1:  "Health and                                                                    
Wellness Across the  Lifespan." He queried the  goal of that                                                                    
priority. He felt that there  were possibly more people that                                                                    
would be considered  obese today that there  were four years                                                                    
prior.  He opined  that  obesity lead  to  many problems  in                                                                    
health care  like diabetes and hypertension.  He queried the                                                                    
department's  efforts   in  reducing  obesity,   other  than                                                                    
outlawing  fast food  and  mandating exercise.  Commissioner                                                                    
Davidson   replied   that   DHSS  was   committed   to   the                                                                    
preventative and  wellness programs. She explained  that the                                                                    
best  opportunities to  educate individuals  was when  those                                                                    
individuals  were  children.  She   felt  that  putting  the                                                                    
children on a path to a healthy lifestyle.                                                                                      
                                                                                                                                
9:41:53 AM                                                                                                                    
                                                                                                                                
Senator  Dunleavy  wondered if  there  was  anywhere in  the                                                                    
process that  rejected individuals  who were not  willing to                                                                    
make lifestyle  changes. Commissioner Davidson  replied that                                                                    
DHSS  had  a  program   for  people  that  over-utilize  the                                                                    
emergency   room.   She   stated  that   the   state   spent                                                                    
approximately  $29  million  in unnecessary  emergency  room                                                                    
care for  Medicaid beneficiaries. She stated  that there was                                                                    
work  to  determine  whether  the  people  that  were  over-                                                                    
utilizing  the  emergency  room  could  go  to  a  different                                                                    
medical provider. She stated that  the program was currently                                                                    
voluntary, and people seemed to  have a positive response to                                                                    
the  program. She  announced that  the  recipients liked  to                                                                    
have someone pay attention to  them, and give them care. She                                                                    
hoped  that  the  program may  soon  become  mandatory.  She                                                                    
shared that there  was a "lock in program"  for someone that                                                                    
had  abused the  system  to  lock them  into  a provider  to                                                                    
receive  proper care.  She stated  that  the department  was                                                                    
looking  forward to  encouraging  shared responsibility  for                                                                    
improved  health   care.  She  remarked  that   health  care                                                                    
providers never asked a patient,  "What about your health do                                                                    
you want to  improve this year? And how can  we help you get                                                                    
there?"                                                                                                                         
                                                                                                                                
9:46:31 AM                                                                                                                    
                                                                                                                                
Senator Dunleavy felt that DHSS  wanted to better reform the                                                                    
programs,  to  help  individuals   get  out  of  the  cycle.                                                                    
Commissioner Davidson agreed.                                                                                                   
                                                                                                                                
Ms. Efird  shared that  slide 9  represented the  first time                                                                    
that  the  department had  allocated  the  programs in  this                                                                    
manner and  examined how the  money was spent.  She remarked                                                                    
that Core  Services 3.3 had  the least amount of  money. She                                                                    
stressed  that  money  should be  spent  on  prevention  and                                                                    
accountability.                                                                                                                 
                                                                                                                                
Senator Bishop requested a cost benefit analysis.                                                                               
                                                                                                                                
Senator Hoffman looked at slide  9, and wondered if he would                                                                    
be  provided   the  same  spreadsheet  for   the  governor's                                                                    
proposed budget.  Ms. Efird replied that  the department had                                                                    
not  yet   drafted  a  spreadsheet.  She   stated  that  the                                                                    
department  would align  the  final FY  16  budget with  the                                                                    
outline of slide 9.                                                                                                             
                                                                                                                                
Commissioner  Davidson  looked  at  slide  13,  "Health  and                                                                    
Social Services, Eight Divisions":                                                                                              
                                                                                                                                
     Division of Public Health | Dr. Jay Butler                                                                                 
     (CMO/Director)                                                                                                             
                                                                                                                                
          •488 Positions                                                                                                        
          •$138,502.8 - FY2015 Management Plan                                                                                  
          •5.14 percent of DHSS FY2015 Operating Budget                                                                         
          •Protect and promote the health of Alaskans.                                                                          
                                                                                                                                
     Senior and Disabilities Services | Duane Mayes                                                                             
     (Director)                                                                                                                 
                                                                                                                                
          •171 Positions                                                                                                        
          •$63,385.8 - FY2015 Management Plan                                                                                   
          •2.35 percent of DHSS FY2015 Operating Budget                                                                         
          •Promote the independence of Alaskan seniors and                                                                      
          persons    with    physical   and    developmental                                                                    
          disabilities.                                                                                                         
                                                                                                                                
9:50:35 AM                                                                                                                    
                                                                                                                                
Ms.  Efird looked  at slide  14, "FY2016  Governor's Amended                                                                    
Budget Compared  to FY2016 Adjusted  Base." She  stated that                                                                    
the  governor's  proposed budget  was  a  decrease of  $46.2                                                                    
million in UGF. She explained  that the decrease was the net                                                                    
reduction. The  actual reductions  in the  governor's budget                                                                    
was  almost  $50  million,  but   the  increases  in  salary                                                                    
adjustment  there   was  a   slight  increase   in  personal                                                                    
services.                                                                                                                       
                                                                                                                                
Ms. Efird  highlighted slide 15,  "Department of  Health and                                                                    
Social  Services   FY2016  Budget   Comparison  Unrestricted                                                                    
General Funds (UGF)." She stated  that the slide represented                                                                    
the  current  budget  after   the  House  Finance  Committee                                                                    
version  of  the  budget.  The  governor  proposed  a  $46.2                                                                    
million  reduction; the  House  Finance budget  subcommittee                                                                    
suggested  an additional  $35.5 million  reduction; and  the                                                                    
House  Finance  Committee   suggested  an  additional  $1.17                                                                    
million reduction. The  department's current budget proposed                                                                    
in  the  House  was  $83  million, which  was  a  7  percent                                                                    
reduction.                                                                                                                      
                                                                                                                                
Co-Chair Kelly  requested an  8 percent  reduction scenario.                                                                    
Ms. Efird agreed to provide that information.                                                                                   
                                                                                                                                
Commissioner  Davidson   discussed  slide   16,  "Department                                                                    
Updates":                                                                                                                       
                                                                                                                                
     •Alaska's Resource for Integrated Eligibility Systems                                                                      
     (ARIES)                                                                                                                    
     •Medicaid Management Information System (MMIS)                                                                             
     •Medicaid Expansion                                                                                                        
     •Medicaid Reform                                                                                                           
                                                                                                                                
Commissioner  Davidson  highlighted   slide  17,  "Areas  of                                                                    
primary focus (4)                                                                                                               
(2015 and beyond)":                                                                                                             
                                                                                                                                
     1. Access to health care for Alaskans                                                                                      
                                                                                                                                
          •Medicaid Expansion: investing in the health of                                                                       
          Alaskans                                                                                                              
          •System Improvements: enrolling individuals and                                                                       
          paying providers                                                                                                      
         •Medicaid Reform: develop an Alaska plan                                                                               
                                                                                                                                
9:55:59 AM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly would  like  to  see DHSS  version  of an  8                                                                    
percent reduction. He stated that  the House presented their                                                                    
version of a close to 8 percent reduction.                                                                                      
                                                                                                                                
Senator  Dunleavy  shared  that  many  of  the  health  care                                                                    
providers in his district did not  get paid or paid on time.                                                                    
He  remarked   that  those  providers   were  used   to  the                                                                    
unprocessed claims. He shared that  a doctor had emailed him                                                                    
stating that the state had  denied him $37,000 in claims. He                                                                    
felt  that  there was  a  major  software issue  within  the                                                                    
department.  He   encouraged  the  department  to   fix  the                                                                    
software   glitch.   Commissioner   Davidson   agreed,   and                                                                    
furthered that that  individual had a right to  be paid. She                                                                    
stated  that  the  department  was  working  with  Xerox  to                                                                    
increase the timeliness and accuracy of paid claims.                                                                            
                                                                                                                                
Senator Dunleavy stressed that many  doctors did not want to                                                                    
expand Medicaid if it were overlaid on a faulty system.                                                                         
                                                                                                                                
Commissioner  Davidson   explained  slide   16,  "Department                                                                    
Updates":                                                                                                                       
                                                                                                                                
     •Alaska's Resource for Integrated Eligibility Systems                                                                      
     (ARIES)                                                                                                                    
     •Medicaid Management Information System (MMIS)                                                                             
     •Medicaid Expansion                                                                                                        
     •Medicaid Reform                                                                                                           
                                                                                                                                
Commissioner Davidson looked at  slide 17, "Areas of primary                                                                    
focus (4) (2015 and beyond)":                                                                                                   
                                                                                                                                
     1. Access to health care for Alaskans                                                                                      
                                                                                                                                
          •Medicaid Expansion: investing in the health of                                                                       
          Alaskans                                                                                                              
          •System Improvements: enrolling individuals and                                                                       
          paying providers                                                                                                      
         •Medicaid Reform: develop an Alaska plan                                                                               
                                                                                                                                
10:01:31 AM                                                                                                                   
                                                                                                                                
Commissioner Davidson addressed slide  18, "Areas of primary                                                                    
focus (4) (2015 and beyond)":                                                                                                   
                                                                                                                                
     2. Child welfare | keeping our children safe                                                                               
                                                                                                                                
          •Maximizing   relationships   and   resources   to                                                                    
          improve outcomes for Alaska's children                                                                                
         •2400+ children in out-of-home placements                                                                              
                                                                                                                                
Commissioner Davidson looked at  slide 19, "Areas of primary                                                                    
focus (4) (2015 and beyond)":                                                                                                   
                                                                                                                                
     3. Tribal and Federal Partnerships                                                                                         
                                                                                                                                
          •Enhancing partnerships to address health and                                                                         
          child welfare issues                                                                                                  
          •Removing barriers that impede our collective                                                                         
          efforts                                                                                                               
                                                                                                                                
                                                                                                                                
Co-Chair  MacKinnon  wondered  if   there  were  efforts  to                                                                    
encourage the  tribal organizations to report  their federal                                                                    
money. She  shared that there  had been  conversations about                                                                    
the tribal  health organizations that utilized  some federal                                                                    
funding.  She  did not  want  to  provide duplicate  program                                                                    
funding for communities.  Commissioner Davidson replied that                                                                    
it   was   important   to  communicate   with   the   tribal                                                                    
organizations to  understand if there was  duplications. She                                                                    
shared that there would be a  meeting in April of all of the                                                                    
tribal  child  welfare  providers  in the  state  and  other                                                                    
individuals from the federal government.                                                                                        
                                                                                                                                
Commissioner Davidson discussed slide  20, "Areas of primary                                                                    
focus (4) (2015 and beyond)":                                                                                                   
                                                                                                                                
     4. Improving the health status of Alaskans                                                                                 
                                                                                                                                
          •Prevent and control complications of obesity                                                                         
          •Reduce tobacco use                                                                                                   
         •Reduce abuse of alcohol and other drugs                                                                               
          •Prevent and improve management of injuries                                                                           
          •Improve immunization coverage among pre-school                                                                       
          aged children                                                                                                         
         •Prevent and control infectious diseases                                                                               
          •Prevent infant deaths                                                                                                
          •Implement Healthy Alaskans 2020 action plan                                                                          
                                                                                                                                
Commissioner Davidson  looked at  slide 21, "Looking  to the                                                                    
Future, Governor Walker's 2014 - HSS Transition Report":                                                                        
                                                                                                                                
     Five Recommendations (Department will explore further                                                                      
     in coming months)                                                                                                          
                                                                                                                                
          1. Medicaid Expansion and Maximize Federal                                                                            
          Revenue                                                                                                               
          2. Administrative Improvements (i.e. Eligibility                                                                      
          and Payment systems)                                                                                                  
          3. Behavioral Health Policy Improvement and                                                                           
          Enforcement                                                                                                           
          4. Health Care Cost and Affordability                                                                                 
          5. Safety Net Service Delivery (i.e. Children at                                                                      
          Risk,       Community      Access       Hospitals,                                                                    
          Disproportionate Share Hospitals, Long Term Care)                                                                     
                                                                                                                                
10:05:42 AM                                                                                                                   
                                                                                                                                
Senator Hoffman  wondered how  the marijuana  initiative may                                                                    
affect the  DHSS budget.  Commissioner Davidson  deferred to                                                                    
Dr. Jay Butler.                                                                                                                 
                                                                                                                                
DOCTOR  JAY BUTLER,  CHIEF  MEDICAL  OFFICER, DEPARTMENT  OF                                                                    
HEALTH  AND SOCIAL  SERVICES, announced  that the  impact of                                                                    
marijuana  legalization was  unknown. He  stated that  there                                                                    
were some concerns, and shared  that he was in close contact                                                                    
with his colleague  from the other states  that had recently                                                                    
legalized  marijuana.   He  announced  that  there   was  an                                                                    
increase  in  emergency room  visits  for  children who  had                                                                    
accidentally injected marijuana products.                                                                                       
                                                                                                                                
Co-Chair MacKinnon stated that  Legislative Budget and Audit                                                                    
had  recently  run  a  review of  the  shortcomings  of  the                                                                    
Medicaid system.                                                                                                                
                                                                                                                                
Senator  Olson  queried  the  possible  supplemental  budget                                                                    
request  number  related   to  the  marijuana  legalization.                                                                    
Doctor Butler  responded that  the costs  may be  related to                                                                    
addiction  services.   He  furthered   that  he   could  not                                                                    
speculate the exact number.                                                                                                     
                                                                                                                                
Senator  Olson  wondered if  the  request  would be  in  the                                                                    
million  or billion  dollar range.  Doctor Butler  responded                                                                    
that it would not be a request in the million dollar range.                                                                     
                                                                                                                                
10:11:08 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:18:43 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
^OVERVIEW:  FY 16  BUDGET DEPARTMENT  OF TRANSPORTATION  AND                                                                  
PUBLIC FACILITIES                                                                                                             
                                                                                                                                
10:19:19 AM                                                                                                                   
                                                                                                                                
MARK LUIKEN, COMMISSIONER,  DEPARTMENT OF TRANSPORTATION AND                                                                    
PUBLIC  FACILITIES,   (DOT/PF)  discussed   the  PowerPoint,                                                                    
"Department   of  Transportation   and  Public   Facilities,                                                                    
Governor's Endorsed Budget Overview" (copy on file).                                                                            
                                                                                                                                
Commissioner  Luiken looked  at slide  2, "Mission  and Core                                                                    
Services":                                                                                                                      
                                                                                                                                
     "Keep    Alaska    moving     through    service    and                                                                    
     infrastructure."                                                                                                           
                                                                                                                                
     Core Services:                                                                                                             
                                                                                                                                
          • Construction of transportation infrastructure                                                                       
          and facilities                                                                                                        
          • Maintenance and operations of the state                                                                             
          transportation systems and public facilities                                                                          
          •    Measurement   standards/commercial    vehicle                                                                    
          enforcement                                                                                                           
                                                                                                                                
10:20:53 AM                                                                                                                   
                                                                                                                                
Commissioner   Luiken  highlighted   slide  4,   "Fabric  of                                                                    
DOT/PF." He shared  that the slide showed the  matrix of the                                                                    
organization.  He stated  that  the  functions that  provide                                                                    
service  were   displayed  along  the  top   of  the  slide,                                                                    
including the regional components  in the Northern, Central,                                                                    
and  South Coast  region. The  components  utilized a  large                                                                    
portion  of  the  operating budget  for  the  services.  The                                                                    
international airport  system was somewhat  independent, and                                                                    
was  a  revenue  positive  part   of  the  organization.  He                                                                    
stressed  that  all  funds generated  by  the  international                                                                    
airport  system  must  be reinvested  in  the  airport.  The                                                                    
marine  highway   system  was  an  important   part  of  the                                                                    
organization,   especially  for   Southeast  and   Southwest                                                                    
Alaska.                                                                                                                         
                                                                                                                                
Co-Chair  MacKinnon  wondered  if the  reinvestment  of  the                                                                    
aviation  dollars was  state  or  federal law.  Commissioner                                                                    
Luiken replied that it was a federal law.                                                                                       
                                                                                                                                
Co-Chair  MacKinnon remarked  that  there  was some  foreign                                                                    
aviation fuel that was not  taxed, and wondered if there was                                                                    
payment in  lieu of tax  (PELT) from the  federal government                                                                    
to the  state of Alaska  to entice  airlines to land  in the                                                                    
facility   and  not   pay  the   full  aviation   fuel  tax.                                                                    
Commissioner Luiken agreed to provide that information.                                                                         
                                                                                                                                
Co-Chair  MacKinnon  shared that  there  was  a report  that                                                                    
suggested  that there  were millions  of dollars  in forgone                                                                    
revenue because of not taxing the full fuel tax.                                                                                
                                                                                                                                
Senator Hoffman  remarked that the  state was  attempting to                                                                    
comply with  federal law. He  queried the  reconciliation of                                                                    
no dedicated funds to aviation.                                                                                                 
                                                                                                                                
10:24:58 AM                                                                                                                   
                                                                                                                                
MARY SIROKY, DIRECTOR,  DIVISION OF ADMINISTRATIVE SERVICES,                                                                    
DEPARTMENT   OF   TRANSPORTATION  AND   PUBLIC   FACILITIES,                                                                    
explained  that   the  department  spent   approximately  25                                                                    
percent  of  its  highway  and  aviation  general  funds  on                                                                    
airports. The  department took in approximately  $5 million.                                                                    
She   stated  that   DOT/PT  could   approach  the   federal                                                                    
government  to explain  that the  revenue was  appropriately                                                                    
utilized.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon shared  that she  was in  position of  a                                                                    
document from  the Department of  Revenue (DOR)  dated March                                                                    
6, 2015,  in response to a  question she offered to  DOR. It                                                                    
appeared  that  there were  two  separate  foreign fuel  tax                                                                    
exemptions:  the  foreign  fuel  flight  exemption  and  the                                                                    
foreign  fuel tax  exemption. She  stated that  it had  been                                                                    
drastically underestimated,  and the  committee may  want to                                                                    
consider  the two  exemptions.  There could  be  as much  as                                                                    
between $6  million and  $43 million  of uncollected  tax or                                                                    
credits  under  one  of  the   exemptions.  There  was  also                                                                    
somewhere between $4.2 million and  $57 million on the other                                                                    
exemption.                                                                                                                      
                                                                                                                                
Vice-Chair  Micciche  believed  that those  exemptions  were                                                                    
founded   in  state   law  as   an  ability   to  keep   the                                                                    
international airports at a lower cost of business.                                                                             
                                                                                                                                
Co-Chair   MacKinnon  understood   that  the   airports  had                                                                    
benefited from the  tax credits. She stressed  that the $3.5                                                                    
billion  deficit had  caused her  to  research the  indirect                                                                    
credits to  examine whether  or not  those credits  hold the                                                                    
same value.                                                                                                                     
                                                                                                                                
Commissioner  Luiken  continued  to   discuss  slide  4.  He                                                                    
explained that  the left  side of  the page  represented the                                                                    
headquarters component,  and the services cut  across all of                                                                    
the operational components within  DOT/PF. He shared that it                                                                    
was  his goal  to  continue to  strengthen the  department's                                                                    
ability   to   provide   core   services;   strengthen   the                                                                    
department's  core  competencies;  and  emphasize  the  core                                                                    
values  of integrity,  excellence,  and  respect. He  shared                                                                    
that  he  wanted to  examine  ways  to consolidate  to  find                                                                    
efficiencies across  the organization  in order  to decrease                                                                    
the   operating  budget.   He  wanted   to  strengthen   the                                                                    
leadership of  DOT/PF to move  the department toward  a "one                                                                    
DOT."                                                                                                                           
                                                                                                                                
10:29:48 AM                                                                                                                   
                                                                                                                                
Commissioner Luiken looked at slide 5, "DOT/PF Assets."                                                                         
                                                                                                                                
     • 3,180 full time positions                                                                                                
     • 5,619 center line miles of roads/highways                                                                                
     • 79 Maintenance Stations                                                                                                  
     • 249 State Airports                                                                                                       
     • 2 International Airports                                                                                                 
     • 720 Facilities (4 million + sq. ft.)                                                                                     
     • 11 Ferries                                                                                                               
     • 35 Ferry Terminals                                                                                                       
     • 22 Harbors                                                                                                               
     • 810 State Owned Bridges                                                                                                  
     • 7 Weigh Stations                                                                                                         
                                                                                                                                
Commissioner  Luiken discussed  slide 6,  "FY2016 Governor's                                                                    
Endorsed  Budget."  He stated  that  the  DOT/PF budget  was                                                                    
divided  between roughly  $207  million of  other funds  and                                                                    
$339 million of general funds.                                                                                                  
                                                                                                                                
Commissioner Luiken highlighted  slide 7, "FY2016 Governor's                                                                    
Endorsed  Operating  Budget  Funding Sources."  He  remarked                                                                    
that  $268 million  of other  funds were  attributed to  the                                                                    
interagency  receipts  at  approximately  0.7  percent;  the                                                                    
highway equipment working capital  fund at approximately 5.6                                                                    
percent;  the international  airport  revenue  fund at  13.8                                                                    
percent;  the capital  improvement  program  receipts at  25                                                                    
percent; the  statutory designated  program receipts  at 0.3                                                                    
percent; the  Whittier Tunnel toll receipts  at 0.3 percent;                                                                    
the  uniform commercial  carrier  registration  fees at  0.1                                                                    
percent.                                                                                                                        
                                                                                                                                
Commissioner Luiken addressed slide  8, "FY2016 General Fund                                                                    
Governor's  Endorsed Operating  Budget  by Allocations."  He                                                                    
pointed  out that  the three  categories Administration  and                                                                    
Support;  Planning;  and  Design  and  Construction  totaled                                                                    
roughly  7  percent  of the  DOT/PF  operating  budget.  The                                                                    
remaining  93 percent  was for  the  marine highway  system;                                                                    
highways  and  aviation;   and  facilities  maintenance  and                                                                    
operations.  That  93  percent   accounted  for  the  direct                                                                    
services that the department supplied to Alaskans.                                                                              
                                                                                                                                
Co-Chair MacKinnon  asked for an explanation  of the benefit                                                                    
ratio  of   the  investment  for  the   two  largest  budget                                                                    
components.                                                                                                                     
                                                                                                                                
Commissioner Luiken surmised  that Co-Chair MacKinnon wanted                                                                    
an  explanation of  the cost  of  the systems  and how  many                                                                    
people the systems supported.                                                                                                   
                                                                                                                                
Co-Chair MacKinnon agreed with that summation.                                                                                  
                                                                                                                                
Commissioner Luiken  replied that the marine  highway system                                                                    
supported roughly  10 percent of the  Alaska population. The                                                                    
highways  and  aviation   component  supported  roughly  100                                                                    
percent of  the population.  He stated that  the communities                                                                    
that could only be reached by  air was roughly 82 percent of                                                                    
the communities in the state.                                                                                                   
                                                                                                                                
10:34:25 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy  wondered if the marine  highway system was                                                                    
a  subsidized  transportation  method.  Commissioner  Luiken                                                                    
indicated in the affirmative.                                                                                                   
                                                                                                                                
Senator Dunleavy  noted that those communities  that were in                                                                    
northern  Alaska received  subsidies  for  airports, but  he                                                                    
noted that there  were no subsidies for  the actual flights.                                                                    
Commissioner Luiken agreed.                                                                                                     
                                                                                                                                
Senator Dunleavy  remarked that  the rural  communities that                                                                    
were  not  connected  by road  or  marine  highway  depended                                                                    
solely on airports. Commissioner Luiken agreed.                                                                                 
                                                                                                                                
Co-Chair  Kelly  asked  for an  examination  of  the  marine                                                                    
highway system with a reduction  in the subsidy, compared to                                                                    
other marine highway systems in other states.                                                                                   
                                                                                                                                
Vice-Chair   Micciche  felt   that   there   should  be   an                                                                    
examination of the cost per user.                                                                                               
                                                                                                                                
Co-Chair  Kelly  stressed that  the  budget  for the  marine                                                                    
highway system was extremely expensive.                                                                                         
                                                                                                                                
Senator Bishop  queried a brief  update of  federal aviation                                                                    
funding. Commissioner Luiken replied  that the U.S. Congress                                                                    
was   currently    reauthorizing   the    Federal   Aviation                                                                    
Administration's funding  for future  years. He  stated that                                                                    
the state  was at the  end of the previous  authorization. A                                                                    
few  Alaska programs  would  be  scrutinized, including  the                                                                    
essential  air  service.  He   remarked  that  the  aviation                                                                    
funding was expected to continue.                                                                                               
                                                                                                                                
Senator  Olson  wondered  what  the  marine  highway  budget                                                                    
percentage had  been in  previous years.  He wondered  if it                                                                    
was consuming a  higher percentage for less and  less of the                                                                    
population.  Commissioner Luiken  responded that  the budget                                                                    
had remained roughly the same  percentage of the budget over                                                                    
time.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon  wondered how  many federal  dollars were                                                                    
moved from roads to the  marine highway system. Commissioner                                                                    
Luiken replied  that he had  possibly misspoken  earlier. He                                                                    
stated that  the marine highway  system was recognized  as a                                                                    
national highway,  the actual miles  did not  qualify within                                                                    
the  federal  formula  like the  remainder  of  the  surface                                                                    
transportation system.  He stated  that the  only components                                                                    
that  would  qualify  under  a   formula  program  were  the                                                                    
terminals   and   dock   facilities  associated   with   the                                                                    
terminals. He furthered that that  there was a ferry capital                                                                    
fund to pay  for significant maintenance on  the vessels. He                                                                    
stressed that the money was  not taken from the road system,                                                                    
because it was part of a separate formula.                                                                                      
                                                                                                                                
10:41:23 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon surmised that  the state criteria did not                                                                    
influence the distribution. Commissioner Luiken agreed.                                                                         
                                                                                                                                
Vice-Chair Micciche  queried why the marine  highway did not                                                                    
qualify because of mileage. He  wondered if the ferry system                                                                    
could  rearrange  the  voyages  to  qualify  under  mileage.                                                                    
Commissioner Luiken  did not believe  that any  ferry system                                                                    
mileage could qualify under the federal formula.                                                                                
                                                                                                                                
Commissioner Luiken  looked at  slide 9,  "FY2016 Governor's                                                                    
Endorsed Capital Budget." The  largest portion of the budget                                                                    
was federal receipts.                                                                                                           
                                                                                                                                
Commissioner  Luiken spoke  to  slide  10, "DOT/PF  Regional                                                                    
Boundaries."  He  stated that  the  new  boundaries were  to                                                                    
share  a  work load.  The  central  region was  the  largest                                                                    
growing population, so  consumed much of the  work load. The                                                                    
marine  highway system  was now  all under  one region.  The                                                                    
department was working through the transition.                                                                                  
                                                                                                                                
                                                                                                                                
Vice-Chair Micciche looked at slide  9, and felt that it did                                                                    
not align with  the earlier slides related  to overall state                                                                    
expenditures.  Commissioner Luiken  explained  that slide  9                                                                    
represented the capital budget, not the operating budget.                                                                       
                                                                                                                                
Ms.  Siroky  discussed  slide  11,  "National  Environmental                                                                    
Policy Act":                                                                                                                    
                                                                                                                                
     Cost                                                                                                                       
     $1,235.4 CIP                                                                                                               
     4 Positions at DOT/PF                                                                                                      
     2 Positions at Law                                                                                                         
                                                                                                                                
     DOTandPF Assumes Federal Highway Administrations role                                                                      
     to review and approve                                                                                                      
                                                                                                                                
          • Environmental Impact Statements (EIS)                                                                               
          • Environmental Assessments (EA)                                                                                      
          • Defend ourselves if sued                                                                                            
                                                                                                                                
     Advantages                                                                                                                 
                                                                                                                                
          • Control over decision making                                                                                        
          • Quick decision making: time = money                                                                                 
          • Federal role is eliminated                                                                                          
          • Consult directly with other federal agencies                                                                        
          • Try innovative process or procedures                                                                                
          • Adopt new policies quickly if needed                                                                                
                                                                                                                                
     Application process takes two years                                                                                        
                                                                                                                                
10:47:52 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  wondered if  the plan  to take  over the                                                                    
404 permitting  was known as  "primacy." Ms.  Siroky replied                                                                    
that it  was known as "primacy"  at DEC, but this  was known                                                                    
as  assignment  with  FHWA. She  stressed  that  DOT/PF  had                                                                    
obtained authority  for categorical exclusions, or  the easy                                                                    
parts of  the National  Environmental Policy  Act processes.                                                                    
She felt  that DOT/PF  was more  efficient than  the federal                                                                    
government.                                                                                                                     
                                                                                                                                
Co-Chair  MacKinnon  wondered  if  there  was  a  reasonable                                                                    
expectation  to  complete  the  process  with  the  indirect                                                                    
funding, and  avoid a legislative appropriation.  Ms. Siroky                                                                    
replied  that the  department had  worked with  other states                                                                    
who  were at  various stages  of the  process. She  stressed                                                                    
that  the  program  qualified   for  indirect  funding.  She                                                                    
remarked that  a good percentage  of the  program operations                                                                    
could be charged to the  specific capital projects. She felt                                                                    
that  the remainder  of activities  would  be indirect  cost                                                                    
eligible.  She felt  that the  program would  never need  GF                                                                    
dollars.                                                                                                                        
                                                                                                                                
Senator Bishop  commented that  he was  in support  of NEPA,                                                                    
and  felt   that  there   was  great   work  on   the  state                                                                    
transportation system as related to the AKLNG project.                                                                          
                                                                                                                                
Vice-Chair Micciche requested a cost benefit analysis.                                                                          
                                                                                                                                
10:51:49 AM                                                                                                                   
                                                                                                                                
Senator Hoffman looked  at slide 9, and wondered  if the CIP                                                                    
funds included 89 percent from  federal dollars, or were all                                                                    
the CIP funds  derived from GF dollars.   Ms. Siroky replied                                                                    
that the projects  charged could be either  federal or state                                                                    
funds. She  stated that  most of the  large projects  in the                                                                    
future would be primarily federally funded projects.                                                                            
                                                                                                                                
Senator  Hoffman looked  at slide  11, and  wondered if  the                                                                    
$1.2  million  was constant  with  inflation,  or would  the                                                                    
amount increase  drastically. Ms. Siroky replied  that there                                                                    
was  no anticipated  drastic increase,  but understood  that                                                                    
any cost was subject to inflation.                                                                                              
                                                                                                                                
Co-Chair  Kelly looked  at slide  12 and  queried the  House                                                                    
Finance  Committee's marine  highway system  reductions. Ms.                                                                    
Siroky replied that the marine  highway system reduction was                                                                    
a total of $10.8 million.                                                                                                       
                                                                                                                                
Co-Chair  Kelly surmised  that there  was  an additional  $7                                                                    
million from the governor's budget.                                                                                             
                                                                                                                                
Commissioner Luiken  highlighted slide 12,  "FY2016 Governor                                                                    
Endorsed Operating Budget Changes":                                                                                             
                                                                                                                                
     New Initiatives                                                                                                            
                                                                                                                                
          Deadhorse Airport Extended Operations; $570.7                                                                         
                                                                                                                                
          Telematics Fleet Management System; $250.0                                                                            
                                                                                                                                
          Full    National    Environmental    Policy    Act                                                                    
          Assignment; ('6005') $1,235.4                                                                                         
                                                                                                                                
     One-Time Items                                                                                                             
                                                                                                                                
          Reduce  Naturally  Occurring  Asbestos Ch  13  SLA                                                                    
          2012 (HB  258) (Ch 15 SLA  12 P45 L30 P46  L1) (HB                                                                    
          284): $(55.0)                                                                                                         
                                                                                                                                
     Position Count Reductions                                                                                                  
                                                                                                                                
          11 full-time; 1 part-time; 3 non-permanent                                                                            
                                                                                                                                
     Reductions                                                                                                                 
                                                                                                                                
          Administration and Support RDU: $(1,034.0)                                                                            
                                                                                                                                
          Design and Construction RDU: $(979.3)                                                                                 
                                                                                                                                
          International Airports RDU: $(325.6)                                                                                  
                                                                                                                                
          Highways and Aviation Components: $(5,837.5)                                                                          
                                                                                                                                
          Facilities Components: $(194.9)                                                                                       
                                                                                                                                
         Alaska Marine Highway System: $(3,560.0)                                                                               
                                                                                                                                
     Total Reductions: $(11,931.3)                                                                                              
                                                                                                                                
10:57:04 AM                                                                                                                   
                                                                                                                                
Commissioner Luiken addressed slide 13, "Reductions":                                                                           
                                                                                                                                
     Administration and Support RDU                                                                                             
                                                                                                                                
          •  Positions,  travel,   supplies,  services,  use                                                                    
          vehicle pools                                                                                                         
                                                                                                                                
    Highways and Aviation - maintenance and operations                                                                          
                                                                                                                                
          •  3 positions  Bethel airport-  reduce operations                                                                    
          to 5am to 10pm                                                                                                        
          • 1 position Akutan                                                                                                   
          • Winter maintenance -  reduce number of position,                                                                    
          overtime, commodities                                                                                                 
          •  Will  use  service levels  to  set  maintenance                                                                    
          priorities                                                                                                            
          • Use federal preservation funding when allowable                                                                     
          to do routine maintenance                                                                                             
                                                                                                                                
     Design and Construction RDU                                                                                                
                                                                                                                                
          • Positions, travel, training, services                                                                               
                                                                                                                                
     Alaska Marine Highway System                                                                                               
                                                                                                                                
          • Eliminate 39 weeks of service                                                                                       
          • Bars                                                                                                                
                                                                                                                                
Co-Chair MacKinnon stressed that  she was not advocating for                                                                    
anyone  to  lose  their  jobs. She  wanted  to  ensure  that                                                                    
eliminating vacant  positions did  not change  any services.                                                                    
She wondered if  anyone was losing their jobs  inside of the                                                                    
position count  reductions. Ms. Siroky replied  that some of                                                                    
those positions were filled, but  some positions were vacant                                                                    
to  move  people  in  order to  mitigate  the  magnitude  of                                                                    
layoffs.                                                                                                                        
                                                                                                                                
Co-Chair  MacKinnon wondered  if the  prioritization of  the                                                                    
overall agency budget was conducted  in the budget drafting.                                                                    
Commissioner  Luiken  replied  that he  had  instructed  his                                                                    
staff to  prioritize the overall agency  budget. He stressed                                                                    
that the  cost saving  initiative would  be the  same across                                                                    
the department.                                                                                                                 
                                                                                                                                
11:01:20 AM                                                                                                                   
                                                                                                                                
Ms.  Siroky discussed  slide  14,  "FY2016 Governor  Amended                                                                    
Operating Budget Changes":                                                                                                      
                                                                                                                                
     Reductions/Changes (UGF)                                                                                                   
                                                                                                                                
          Statewide Procurement-Personal Services: $(200.0)                                                                     
                                                                                                                                
          Central Region Highways and Aviation-Service                                                                          
          Level Reductions: $(1,942.2)                                                                                          
                                                                                                                                
          Northern Region Highways and Aviation-Service                                                                         
          Level Reductions: $(3,084.1)                                                                                          
                                                                                                                                
          Southcoast Region Highways and Aviation-Service                                                                       
          Level Reductions: $(1,062.7)                                                                                          
                                                                                                                                
          Marine Vessel Operations-Restore full service to                                                                      
          currently published schedule and account for                                                                          
          eliminated fuel trigger: $6,289.0                                                                                     
                                                                                                                                
Commissioner  Luiken looked  at slide  15, "FY2016  Proposed                                                                    
Fee Increases."                                                                                                                 
                                                                                                                                
     AMHS Fare Increase                                                                                                         
                                                                                                                                
          • 4.5 percent = $1.8M                                                                                                 
                                                                                                                                
     Deadhorse Landing Fees                                                                                                     
                                                                                                                                
          • $285.0 in FY2016                                                                                                    
          • $570.0 in FY2017                                                                                                    
          • Whittier Tunnel Fare increase 10 percent                                                                            
                                                                                                                                
11:06:40 AM                                                                                                                   
                                                                                                                                
Senator Hoffman looked at the  fuel trigger of $3.6 million,                                                                    
and the  department would  recoup $1.8  million, with  a 4.5                                                                    
percent  increase   in  FY  16.  He   queried  the  increase                                                                    
percentage in the subsequent five  years. He wondered if the                                                                    
department was  planning ahead to  account for  the probable                                                                    
increases. Ms. Siroky replied that  the 4.5 percent increase                                                                    
to the  marine highway  system was in  addition to  the fare                                                                    
study that  was in  the process  of completion,  which would                                                                    
attempt  to balance  the fares  throughout  the system.  She                                                                    
shared that the House passed  an amendment that would double                                                                    
the fare  increase in  January 2016.  She shared  that there                                                                    
was a plan to build the  ferry schedule on a budget that was                                                                    
sustainable  in   terms  of   the  state's   current  fiscal                                                                    
situation.                                                                                                                      
                                                                                                                                
Senator Hoffman  wondered if there  were any  marine highway                                                                    
fare  increases beyond  FY 16.  He specifically  wondered if                                                                    
the  state would  attempt to  recoup the  $3.6 million  fuel                                                                    
trigger.  Commissioner Luiken  replied  that the  department                                                                    
had conducted  a fare study,  so the department  intended to                                                                    
utilize the  results of  the fare study  to rework  the fare                                                                    
system  into a  formula  based system.  He  felt that  there                                                                    
would  be increased  revenue as  a  result of  the new  fare                                                                    
system.                                                                                                                         
                                                                                                                                
Senator Olson  looked at the  landing fees, and  wondered if                                                                    
there was a  change in the gross weight  limitation of 6,000                                                                    
pounds.  Commissioner  Luiken  replied that  he  anticipated                                                                    
some comments regarding the base of the set weight.                                                                             
                                                                                                                                
Senator  Olson assumed  that the  proposal  was still  6,000                                                                    
pound gross weight.  Commissioner Luiken agreed.                                                                                
                                                                                                                                
Senator Olson  queried the cost of  collecting the $500,000.                                                                    
He wondered if there  would be additional personnel required                                                                    
to  facilitate the  collection process.  Commissioner Luiken                                                                    
responded that there  was an automated system  in place that                                                                    
could  be  used, and  the  expectation  was to  utilize  the                                                                    
current personnel.                                                                                                              
                                                                                                                                
Senator Olson  wondered if the  intention was to  extend the                                                                    
hours at the Deadhorse  Airport. Commissioner Luiken replied                                                                    
in the affirmative.                                                                                                             
                                                                                                                                
Senator Olson  remarked that there  were some  aircraft that                                                                    
did not  have specific TSA  clearances, so he felt  that the                                                                    
tax was  discriminatory against  the smaller  aircrafts that                                                                    
were attempting to provide necessary  service to the smaller                                                                    
communities.                                                                                                                    
                                                                                                                                
11:13:43 AM                                                                                                                   
                                                                                                                                
Co-Chair Kelly  wondered if the  matter could be  dealt with                                                                    
in the  budget, or  whether it was  a policy  issue. Senator                                                                    
Olson replied that it would  be a regulatory change, because                                                                    
there were some federal issues.                                                                                                 
                                                                                                                                
Co-Chair Kelly asked if there  could be some resolution with                                                                    
Senator Olson. Commissioner Luiken agreed.                                                                                      
                                                                                                                                
Senator Bishop wondered  if any of the  seven weigh stations                                                                    
would  be  affected.  Ms.  Siroky  agreed  to  provide  that                                                                    
information.                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche   remarked  that   the  state   was  in                                                                    
extraordinary  times.  He  felt  that there  would  be  some                                                                    
inconvenience to some residents of the state.                                                                                   
                                                                                                                                
SB  27  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
031215 DOT Budget Overview.pdf SFIN 3/12/2015 9:00:00 AM
SB 27
031215 DHSS Budget Overview Updated.pdf SFIN 3/12/2015 9:00:00 AM
SB 27
SB 30 031115 CRCL-CommentsOnSB30.pdf SFIN 3/12/2015 9:00:00 AM
SB 30