Call the Senate Finance Committee to order where it's 9 a.m.
We're in the state capital Senate finance meeting.
Please silence your cell phones.
Joining me today is Senator Stedman, Senator Olsen,
Senator Keel, senator Merrick,
Senator Kaufman,
Senator Cronk and in
the audience we have Senator Geisel.
Today's agenda, we had one item on today's
agenda we are going to have the overview of the governor's.
fiscal year 2027 budget we have the Office of Management Director Lacey Sanders
please come forward introduce yourself and give us the presentation good morning
For the record my name is Lacey Sanders I am the director of the office of management and budget for the governor and
Today I have been asked to provide a presentation on the overview of The FY
2027 budget that was delivered to the legislature on
December 11th
And with that I'll get started
Please proceed great
Okay, so to get start of this year I wanted
to take a moment to do a little bit of a look back
at where we were when we left the legislature last year.
And the FY2026 budget was signed into law.
So on the slide before us today,
we've provided what the price of oil was
in the spring 2025 budget.
or excuse me in the spring 2025 fall forecast or spring forecast that was used to develop the
fiscal year 2026 budget. At that point the budget was developed on $68 a barrel and the
total revenue coming to the state was just at $1.2 billion. The budget that
And if you'll recall, there were vetoes that we will discuss later that brought the amount
of the budget down to the $6 billion amount, leaving a surplus of approximately $141 million.
Did the line item vetoes and enacted the bill into law?
We were working closely with the Department of Revenue on
Evaluating what the price of oil was looking like at that point in time so in June of 2025
And we had seen that we were experiencing as a state a significant decrease in the amount of revenue forecasted
Compared to the 68 dollar a barrel that was projected in March to budget
Moving forward into this year's budget that was presented to the legislature we
senator stegman
Thank You mr. Germant
Just as a footnote, I think as I recall we worked on the budget here at the table at $66 a barrel
As a target mount when we put the Budget together even though that number was adjusted when went through the conference committee
but we
Take the spring forecast and we look forward even at end of session and and try to
Factor that in if we look like we're going to have escalating price or or de-escalation and so
If I would suggest if you want us to use a different value you let the committee know
Through the chair senator stidman. Yes, I think
you know
The process that we have established is to provide a fall revenue forecast and a spring revenue
Forecast in March and that may be early and we may need to talk through
What a process looks like moving forward to ensure that we're tracking appropriately,
especially when we are talking about significant decreases.
We saw the price of oil drop from the $68 range down to as low as the
$60 range, which is a significant impact to our revenue.
So, yes.
Yes, and we have talked with the Department of Revenue,
and, we anticipate to have the spring forecast by March the 13th.
Please proceed.
Thank you.
I'm going to move over from the spring 2025 to the fall 2025, which again was used in developing the fiscal year 20
Excuse me. This is the fall 2025 update just to give us a frame of reference on where we are now
So the price of oil has come down to dollars and fifty two cents
approximately a reduction of 200 million dollars in state general fund revenue
Leaving us with a surplus and deficit
Or, excuse me, a deficit of 52 million.
And that's before we talk about the supplementals that have been introduced to the legislature.
And I will go through those supplementing on the following slides.
Those supplementings currently that were introduced in the December budget total about 294.
million dollars, leaving us with a deficit of $350 million
based on the current price of oil.
And as I mentioned, we continue to see
that price fluctuate, the Department of Revenue
does do an excellent job at keeping us posted
and we're all monitoring closely.
And again, will have that forecast in the spring, 2026
as you said, Chair Hoffman in March.
So we'll continue the monitor.
So if there are no questions for their questions on this slide
I'll move us forward to the 2027 proposed budget by the governor
As we started developing this budget in the fall as we noted the spring forecast had a much higher number
For revenue proposed for the fiscal year 20 27 at $67 a barrel bringing us to about 3.3 billion dollars in general fund revenue
In the fall forecast, we saw that decrease
by about $5 a barrel, bringing us down to $62.
And again, bring in that number down about 120 million.
So as we started working on the governor's budget,
the Governor's direction was to meet
our contractual obligations in the state.
In this state, no new initiatives would be moving forward
and to provide the minimum amount necessary.
As far as matching requirements when it when we were talking about the capital budget
so just for
Walking us through the process of what we're looking at at a very high level for the governor's budget
if we start
With the 2026 as a base. We often talk about with ledge finance and adjusted base this
Is prior to that. This is what was passed in the twenty twenty six budget
At the current prices of oil we would have about a hundred and eighty one million dollar surplus
And then we move down to what we what?
We do refer to as the adjusted base and that is by removing any one-time items that were appropriated in the prior here
providing any contractual or salary adjustments that we're included based on contract signed and then
Today, we'll talk about the changes that are here, which are total 22.8 million.
These are going to be the items that for things like our debt payments and
any contractually required items such as retirement or other items
that our fixed cost to the state.
And us wanting to make sure that we're meeting the obligations of the State.
This brings us down to a total budget of just at six just over six point one billion dollars
at this point we see a
remaining surplus of a hundred and fifty million if we're using the fall
forecast update and
Then the next line here at the bottom is the increase for the governor to provide a statutory
PFD or permanent fund dividend in the budget it adds an increase of one point seven billion over the prior years dividend
amount, and then you'll see the overall surplus deficit, which is a deficit of just out $1.5
billion.
Questions?
Okay.
So, moving on, this is what we refer to as our short fiscal summary, so this focusing
At the back of the presentation and the appendices,
there is a full fiscal summary.
If anybody would like to reference that or has questions on it,
it's a lot of detail to walk through in a presentation.
So we provided this year the short fiscal
summary as a frame of reference.
So same information, just in our standard way
of looking at things, we have revenue to the state
for fiscal year 2026 and 2027.
As we've just discussed last year's total revenue right now is projected at five point nine or just at six billion dollars
In fiscal year 2027 we have approximately six point two
Billion dollars you do see the slight uptick in the draw from the earnings reserve account based on the percent of market value
That's about two hundred million dollars
Moving down we have the total expenditures for the state broken down by operating capital and
supplementals as well as revised programs for a total budget of five point six billion dollars in
operating and capital items
For fiscal year 2026 and five-point four billion in the governor's proposed budget
Next we add in the total appropriations for the permanent fund dividend as we just spoke
You see the increase of just over 1.7 billion dollars here
And you see that overall deficits that we spoke about on the previous slide as a frame of reference
We have provided the current balance or excuse me the balances
identified as of December 2025 for our savings account the constitutional budget reserve fund
currently pulls, the deficit is proposed to be pulled from the U.C.B.R.
Senator Keel.
Thank you, Mr. Chairman. Good morning, Ms. Sanders.
I noticed that in the FY27 proposal, there's no placeholder for
supplementals, and I can't think of a year in
the last 25 or 28 where there haven't been supplementalls.
It's a very large and complex operation with a lot of things that can come at you during
a fiscal year.
When we finished the budget last year, there was an attempt to include some headroom.
Is there an intent to either include head room here or ought we include a placeholder for
some sort of supplemental?
Through the chair, Senator Keel, for fiscal years of 2027, we do not have a place holder
happy to have conversations about whether we should include headroom or
include a percent or a number amount. I will say it is very, has been very
difficult to project what supplemental's amount is the appropriate amount to put
in, but a member could be determined or agreed upon. Thank you, Mr. Chairman.
Again, I've just never seen a year where there hasn't been one, so I think
Truth in budgeting and doing our job, we got to stick something on that line.
Thank you Senator Keel.
Senator Stedman.
Yes, thank you Mr. Chairman.
Along those lines, I think one of the
in a broader concept we're talking about looking forward several years.
And I know some form of a planning process.
that needs to take place and we're going to work on that over the next couple of months, but
it's really difficult to get a beginning value to start from when we don't have, as Kio mentioned,
some headroom, which is normal. But there's some big and supplemental and
we can see that in just fire. If we were going use five years, three years seven years we should
agreed upon policy. Clearly the one didn't work last year when we did fire and we had
a veto and a month and half later a request for the money back. That's embarrassing. But
we also in here we don't have anything for K-12 maintenance. We had nothing in last
Support some form of K-12 maintenance general school maintenance. We had a
There's nothing in here for the University
in maintenance I
Assume that again and maybe falsely saw that there's an
Interest in maintaining our infrastructure
There is nothing here, for courts
And general maintenance looks a little light
across the board so I would encourage the administration when they
come forward with their adjustments to the budget here in a couple weeks they factor those in
because if the position of the administration is they have no maintenance for our infrastructure
it is very difficult to get any agreements going forward on virtually anything in the future
because I don't think the public's going to support our schools falling down around our kids' ears.
Would want to put forward. I would just suggest zero is not appropriate
some number so we have some basis for that discussion and
then we'll agree or disagree on that particular number and we recognize if we
Have an opinion higher than the governor's very easy for him to remove it down to his proposed number
So there's no question about that
but there is a concern that we
have
much more tightly agreed upon base number to work from
Thank You senator Stedman in fact, we've had a school collapse that was in my district in Antioch
So already the there's a need to
address
Those children and where they're going to be going the school in the future. Do you have a response mr. Sanders?
Thank you chair Hoffman through the chair senator stedmon
Our state is in a difficult position right now.
We continue to rely on a very volatile revenue source in the state.
And we continue have conversations about,
year after year, about what is the right level of an appropriation for a variety of items.
I think this budget was intended to provide the base level
based on the statutes and we need to have a very direct conversation about what we will continue
to fund and how we're going to find those things. The Governor is open to conversations about revenue,
about a fiscal plan, about looking forward.
I'm happy to sit down and have those conversations so that we can ensure that all of the pieces
in the state are addressed as they should be including our schools and the funding for
deferred maintenance in this state.
Frankly should be funded in the state, but we just don't have the resources to direct that money there. So
again, I'm happy to
Participate in those conversations and coming up with a plan or developing a methodology on how we
calculate certain things, you know
talk about disasters. Yes, the Governor vetoed down disaster
relief funding and then we had unexpected costs that have, you
know, are difficult to project when it comes to disasters this
year's budget. We proposed a 10 year average. This would
include the 2018 earthquake. It would include, You know two
of the items for typhoons that we've experienced amongst many,
conversation and and trying to determine the best way to calculate those things
But I think we also
Recognize that some of these things are unpredictable
So again happy to have conversations as we move forward through this process
Senator Stidman just a brief another brief comment on one other item. That's the dividend, but we all recognize there's a statutory
Dividend in the system and the governor's required
to put a budget on the table December 15th.
So it's not surprising that he has the statutory dividend
in there.
I would suggest that you modify that in the upcoming amendments
you're going to on a table.
Because if the position is no maintenance in a 1.5 billion
and a half dollar deficit, you'll
be lucky if we just don't hand you back the budget
and watch the action, and it won't be pleasant.
You know, so I would recommend if the governor supports the 50-50,
puts the amendment in.
He followed his responsibilities in December,
so let's try to get a real view of the administration's position
where they'd like to see the budget.
Now, we can go from there.
You might find we agree with almost all of it.
Thank you through the chair senator stedman happy to have a conversation with the governor about that recommendation or ask
And we'll again be bringing those them any amendments forward. I think it's the 30th legislative day
Thank You Casey, please proceed
Right on to slide number five. This is an annual
Snapshot that's provided on the operating budget. It's a comparison from fiscal year
2026's budget to fiscal Year 2027's Budget on unrestricted general funds
This slide is often referred to as the sweep graph
as you can see
moving from right to left
smallest amount of general fund moving all the way to the largest proposed use of
general funds. Our formula programs continue to utilize a significant portion
of the budget. 40% of operating budget is tied to Medicaid and K-12
Moving on to slide number six, I wanted to take an opportunity to talk through just a few of
the changes that are proposed. Again, this isn't every single change. I anticipate your
Senate Finance subcommittees will work through each department's budget.
but wanted to touch on a few things.
So starting at the top of the page
with the Department of Administration,
we have the implementation of
the statewide information technology classification study.
You may recall discussions last year
where the department of administration's division
of personnel completed that study,
this year's budget includes the increments
to address the cost of implementing that steady.
We have two significant transactions, transitions.
One is for shared services of Alaska or SSOA.
This is where our travel and accounts payable has been processed in the past.
These functions will be returning to all of the departments.
So throughout the budget, each of these agencies' budgets,
you'll see those transfers of positions back to the department.
This is intended to reduce the duplication of work that we were seeing with those functions.
So we are having agencies enter information as well as shared services of Alaska.
So in an effort to reduced those redundancies and address inefficiencies,
we're moving those individuals back into the departments.
The other transition that have is payroll services.
Surveyed each of the departments to determine how things were going and whether they had
Recommendations for changes associated with payroll services
This is an area where we strive to find improvements to ensure that our state employees are receiving their pay timely and accurately
So through that we had eight agencies that identified
their request would be to have payroll services
within their agencies.
One interesting note is that for payroll
services it tends to be our agencies that have
Um, pretty technical contracts or more technical, uh, contracts such as in the Department of Corrections or in
the department of public safety where they have, um, you know, an increased complexity when it comes to
processing, ah, that payroll. There is payroll services that will be retained within the
Department Of Administration's Division of Finance, for some of the other agencies that did not have a
The governor's budget includes the implementation of Executive Order 137, which establishes the Department of Agriculture.
These are transfers from the department of natural resources into the new department.
And those are classified as agency transfers between the two.
Lastly, in the Department of Commerce, Community and Economic Development, two items that are just noting is the continuation of $2.2 million for the Alaska Gas Line Development Corporation.
This is related to the continued efforts that they are tasked with as they work on the Alaskan liquefied natural gas.
pipeline development as well as the second bullet which is funding the
Alaska Energy Authority's power cost equalization program at 44 million dollars from the PCE endowment fund
Happy to take any questions
Senator keel thank you, mr. Chairman Miss Sanders, this is an intriguing
set up proposals in DOA, I'm thinking back to a couple of years ago when at the subcommittee
level we proposed decentralizing payroll services for those agencies with the most complex
and technical contracts, Marine Highway, Corrections, Public Safety, can't remember where we got
with wildland firefighting, my menopmen have been in there, and the administration was
I think we reached detente on marine highway systems.
Then the other thing that came out of the admin subcommittee
about, I'm think it was two years ago, was a look
at centralized services and which ones might be decentralized
and what ones were working and saving money.
Workflow efficiency and saved money from accounts payable and travel
So we didn't we didn't decentralize those I think we moved the IT help desks
What happened
Through the chair senator keel I
Can't I can't speak to it happened several years ago. I'm sorry off the top of my head
I don't recall the conversations that were surrounding this
There are still functions of shared services of Alaska that will be retained in the division of finance
Those are most mostly for collections where you had revenue collection and not so I can't speak to what was provided as far as
This is the savings that we're seeing or experiencing
As you're aware, we've had the executive orders that were implemented over the interim from the governor identifying where we have efficiencies
There were a lot of conversations throughout agencies about duplication of efforts and
the processes that we had established for travel specifically.
And I think that is where we really identified what workflows were occurring and as well
timely to get us to year end and so at this point that was how that item came
about payroll services for the state of Alaska has been something that we have
dealt with I know we had conversations about it last year and the difficulties
that were seeing and you know it's very important for
If transferring payroll services back to agencies that understand the complexity or understand
the details that are that our
They're their staff are facing when it comes to payroll Services
We should make every effort if that's gonna make it be an improvement for them
Let's do that so that we can ensure that people are getting paid timely and accurately
That was how the conversation came about
Senator Gail, thank you, Mr. Chairman
A few things more boring to the general public than the inner guts of state agencies.
It is an essential part of our job, a shared job of delivering state services well and
at the lowest effective cost.
So I'm looking forward to admin budget subcommittees that could put a cow in a coma, but I'll
And we'll be looking to figure out what's different so that we understand what really is the best way to move forward
So I appreciate that and I'm hopeful for a real productive conversation
Senator Kaufman thank you through the chair to
Sanders the
Payroll processing and all of that implies kind of a heavy IT work load I would assume
For the infrastructure, the systems to handle all that,
are there any major IT projects that are going on right now to try and
improve the processes of managing payroll and how is that affected by the transition
from centralized to decentralized?
Through the Chair, Senator Kaufman, right
now our payroll is processed through the state's accounting system,
which is referred to as IRIS.
So there will be need to be modifications as we work flow right
The agencies that are getting payroll back there will have to be changes
We anticipate those changes are already underway as far as coordinating and working with the agencies on what things will look like
We have from now until July 1 when this would be implemented
We're talking about phased approaches so that certain agencies will take on their responsibilities ahead of time or the individuals would take
On you know getting assigned to their agencies and getting aligned with what the business needs are within that agency
those workflow issues, I don't see a significant change in IT or a new system, so to speak.
Mr. Copperman?
No, it's the will of the committee.
I'd like to just look in a little bit more on the progress on that if there are any issues
any resource needs that we're not addressing or unaware of.
Thank you, Senator Cockerman.
Thank you, Mr. Chairman, actually appreciate the transition of payroll services back to some departments because that was a really big issue in my district with DOT and
we were caught up in tons of different issues there, but I have a quick question because I know we're way out of compliance.
Is there any money in the budget for a new locality pay study because it's been way overdue?
Through the chair senator cronk you're referring to like a geographical differential study not at this time
There is nothing in the budget
Things in your front I might comment upon the use of forty four million dollars in
the
Out of the power cost equalization fund for the energy authority
There has been numerous attempts to try to use this fund
for other purposes
This concept of power cost equalization isn't even close, where you have the rail belt having
energy costs, electric costs around five cents.
You have communities like Lime Village spending one dollar.
So if you look at the power costs equalisation fund, it's not equalizing the rates.
to spend money to try to equalize those rates, as the title says,
instead of spending the money on programs that administer it.
This has been the historic use of those funds,
and that's where we should be striving to assist those communities
that are struggling with high cost of electricity.
about the high cost of heating, which is sometimes 5 to 10 times higher in rural Alaska than you
afford yourself. So I would not look kindly at cracking that bank open for this purpose
I think moving on to slide seven, we have starting with the Department of Education and
Early Development.
So the foundation program and people transportation programs are funded at the statutory level.
that was passed last session.
There are two increases,
drawing from the Higher Education Investment Fund
for the costs associated with the Alaska Performance
Scholarships as well as the Alaskan Education Grants.
In the Department of Health,
we have a continuation of the senior benefits program
being funded at the, being fully funded
at a statutory level.
And we had two increase associated
federal receipts. The Division of Public Health has several grants that they anticipate receiving
and will be distributing and then as well as in behavioral health we have $585,000 for the
crisis contact center. Under the Department of Labor and Workforce Development we
have a one-time increment of $1.4 billion of state general funds.
This is due to two things
One, we have several years ago when the reverse sweep was not continued.
The worker safety and compensation administration account receipts, also known as WISCA, were
swept at the end of the year, leaving their balance in that fund as zero.
These are collected from individuals or contributions that the Department of Labor collects into
And that account was drawn down to zero
Secondarily to that we've had a decline in revenue as those Alaskan businesses are becoming safer the the amount that's deposited into this
Account is not sufficient and so there is an appropriation of 1.5 or excuse me 1 point 4 million dollars to bring that
Account back up for fiscal year 2027
It's a sweet discussion, Mr. Chairman goes back several years
But my understanding is you couldn't sweep funds that were like employer money
so are we is this just going back and in doing a
counting reversal to
Put us back into compliance
Through the chair senator stedman kind of
this this account is subject to the sweep there have been conversations with
legislative audit about this accounts and how those
Receipts should not have been swept, but how the fund is established in statute requires
it to be swept.
It would require a change in statue to change the designation of it being sweepable, and
that statute has not been addressed.
So this is an effort to ensure that we can continue the operations of the workers' compensation,
So it's two-fold, really.
It's an understatement.
Mr. Follow-up on that one.
So I understand that it is subject to the sweep.
But the question is, is all the funds subject
to this sweep?
And I think that's where the questions is.
So we'll have to drill into that.
And obviously they're not, because there's a
request here to backfill it.
Thank you, mr. German. Thank You senator stedman, please proceed. Oh, if we could
For doneness, I thought maybe some of us would have a question. I just want to make a quick comment on the
Department of Labor and workforce development, you know,
I don't know what's coming at us in the next couple years with our gas pipeline
But you we've been told we're going to need about 8,000 workers in
the state to build this just our little
in state 42-inch line, which is a colossal project in itself.
And of that 8,000 workers, Mr. Chairman, we probably have next to zero,
because everybody, pretty much everybody that's got a skill set
for the oil patch is already working in the old patch.
Everybody with other skill sets are already employed.
So it looks to me like we're gonna have a massive
invasion of out-of-state workers to get this built.
And I think, Mr. Chairman, we should be giving some consideration to how we are going to get some of our younger workers around the state jobs on this project.
If they're everything from working in the man camps to driving trucks to, you know, being oilers, whatever the jobs may be.
And we've got the Teamsters trying to come up with a training program and a driving range
for truck driving, you can't just get in a semi with long sections of pipe and sort of
dragging it up to the North Slope, that's not going to happen, so I think we need to give
I guess the training program seemed to be not geared up anywhere close to the time frame
that we've been presented for this gas line if we get it, right?
So I think we should give that some consideration Mr. Chairman as we go forward and ask the administration
employees we have on this project, the better off the state it's going to be.
We don't want to see all 8,000 people come from Arkansas and Texas and Alberta and
everywhere else and the other oil patches, North Dakota, wherever they're going come
from. Thank you Senator Stidman. Please proceed.
If I may send through the chair Senator Stedman the governor did introduce a piece of legislation on the unemployment trust fund and
Designating a portion of that revenue towards training in the state. I know that bill will probably be before this committee at some point
The governor is as as you are
Concerned with ensuring that we have Alaskans ready and prepared and trained to address the pipeline needs in this state
So moving on to slide number eight
Starting with the Department of military and veteran affairs. We have deposits into the
Excuse me stumbled there
deposits in to the disaster relief fund
for fifth fiscal year
2026 we see a deposit of approximately 40 million dollars as a supplemental
That I noted earlier in the slide we have that
294 million there is 40,000,00
for the Disaster Relief Fund.
And then in fiscal year 2027,
we have $24 million deposited of general funds
into the disaster relief fund
along with our federal receipts estimate.
Again, as I noted earlier, we are working towards some type of methodology that could
be agreed upon.
This was a 10-year average that was utilized.
It would have captured the 2018 earthquake as well as the two typhoons that the state
has experienced so far.
In the Department of Natural Resources, we have two items, the first two bullets.
These are previous capital appropriations that are being moved into the operating budget.
We have tried to evaluate what we had in the capital budget to ensure that it aligns with
being the definition of a capital project.
The National Historic Preservation Fund grant, as well as the critical minerals mapping
going operating programs that shouldn't be projects in the capital budget but should
really be reflected as ongoing operating.
Additionally, as noted earlier, we have the deposit
into the Fire Suppression Fund.
We have noted on here the first fiscal year,
2026, $55 million of state general funds.
These were made as fire declarations to the legislature.
And then for fiscal years, 2027,
we had 47 million unrestricted general fund
being deposited into fund along with the language
statutory designated program receipts and 20 million dollar estimate for federal funds.
Can you explain for the audience under the disaster relief for FY26 to 40 million dollars,
you have it listed as supplemental. But in the fire suppression for 2026, the 55 million
Chair Hoffman, Director Panter at Lege Finance and I spoke in an effort to not
duplicate counting that we had already transmitted the fire declarations to
the legislature and received concurrence on those. We did not...
officially submit transactions for that because we didn't want to double count.
I'm happy to work with director painter on how we want
to ensure this is accurately reflected in the budget.
The 40 million dollars for the disaster relief fund we send over the initial declarations
generally those come over as about a million
dollars each and then we amend them as we move forward.
temporarily borrowing money from other capital projects as the fund reaches a zero balance
of actually spending money out of the funds.
So the $40 million general fund supplemental is needed to capitalize, recapitalize the
Declarations we've already transferred the money into that fund so that we can respond to fires the reason that I bring this up
I I believe the proper methodology would be a supplemental. We should not be using
What's referred to as ratifications?
in the current year because
Ratifications are for the previous fiscal year so fundamentally I would say that
it would be bad accounting practices to spend money
in this current fiscal year
and then use the word of ratifications for that
because it bypasses the budgetary process.
So that should be taken into consideration.
There should some public policy regarding that for...
For clarification not only for this year, but for our future years
It sure have been happy to talk through how that looks technically from a budget perspective. That's not a problem. Thank you
Oh
Sorry, I through the chair
I just wanted to notice the last two items that I hadn't spoke about which were under the Department of Public Safety.
So there is $1.3 million in general funds for
the continuation of the body worn and in car camera operations and equipment.
This is something that was previously funded to start in the capital budget.
It is continuing, again, we're moving this asking for a new appropriation of general funds
now that those federal funds are no longer available in the operating budget.
And lastly, $550,000 of receipt authority so that we can continue to provide training
and certification to our law enforcement officials, including village police officers and others,
community law-enforcement officers.
Thank you, Ms. Sanders. Senator Steadman
This is a couple of things. I want to make a point on the last item mr. Chairman
Public safety. We need to
When we focus on our our training
Programs so we can have
Our Alaskans working on this big project. Let's not lose sight that the public safety issue is going to be enhanced
in fact
probably a lot bigger issue than most people realize except for maybe some of
the ones that were here in the 70s and saw it. So we need we
need to make sure that we're not caught short on that issue. And then the other
broader point I want to take is what happened we needed a three-quarter vote
to fund this supplemental. Or are you gonna get your three quarter vote? What
Through the chair, Senator Steadman at three-quarter vote is required and
In order to access the CBR if the votes are not there from the bodies
Then we'll have to determine next steps, and I don't know what that looks like
Stateman, I'd like to know. What they are I think we should have that in the discussion
Clearly when we get into three quarter votes a lot of times it gets very expensive
Meaning we end up spending more
It's the exact opposite of what it was intended for.
And then on the accounting process, in the event that that does happen,
how does that impact our finances and how
does it impact your cash flow?
That's one of your key areas you have to struggle with is OMB Director.
I think the last time I checked cash flow purposes are about 500 million to a million,
excuse me, 500,500 million
to 1 billion in the CBR, so we do need to pay close attention to that.
And we need need determine what our options are if CB our vote is not going to be accessible.
Thank you, Senator Sedmond, senator Kaufman.
Thank you through the chair
Sanders
under the subject of Department of Public Safety one of the key elements of
the governor's state of this state speech was
sounded like a task force or some effort to improve the crime rates in Anchorage and I'm just wondering it is that
Just resource redeployment or is there anything there that would incur cost in order to?
to staff or to somehow focus on that as a key priority.
Through the Chair, Senator Kauffman, there is no specific line item in the budget to address that.
I can follow up with the Department of Law and the department of public safety to see if there are what their plan is or what they're envisioning.
I have not been part of those immediate conversations.
Senator Kaufman, but thank you through the chair. That would be great
It'd be nice to see what the meat and potatoes are behind that since it was highlighted and given that elevated status and the in the discussion
Thank you, sir. Thank You, Senator Kauffman, please proceed with Sanders
So moving on to our slide nine our Department of Transportation and Public Facilities
There are several items on the first two bullets that are restoring
Funding levels that were proposed reductions from last year. So in highways and aviation's maintenance
There is a 5.2 million dollar increase to restore that funding that was reduced last
year
as well as 1.3 million dollars for the one-time use of Alaska Housing Capital Corporation funds by the legislature.
The next two items are using motor fuel taxes
that are collected in the state
to address statewide guardrail and roadside hardware repair
as well as statewide wayside maintenance costs.
And those would be receipts that would
be collected under that motor-fuel tax.
Under statewide items, we have a recapitalization
of the Alaska Higher Education Investment Fund.
This was the amount, just at $130 million
that was drawn from the Constitutional Budget Reserve
last year to fill the deficit from overall operations
and spending compared to revenue.
This is proposed as a direct draw from this CBR.
As I noted earlier, the budget does include a full statutory permanent fund dividend, providing approximately $3,650 per Alaskan.
And as well this year, we have a $1.4 billion transfer for permanent funds inflation proofing from the earnings reserve account to the principal.
And that captures my operating items.
Is any of the supplemental items a request of
the legislature or are they all a requests of
the administration?
Senator Stedman, I'm not quite sure what you're asking.
It's not a loaded question.
I am trying to point out that the
supplemental request
are not requests from the legislature.
It's the request from administration
to balance the budget, balance
the books for FY26 ending the end of this June.
This is an additional spending being requested
by the, by legislature,
and it's a request
from an administration to
balance books and that gets back
to the three-quarter vote required.
In other words, no.
Senator or House member or other body member is
requesting additional spending in FY 26 to my knowledge
Through the chair senators. I've been. Thank you for that clarification. Correct. These are requests of the governor
That are
Included in his December budget
so to put a finer point on it the
supplemental that requires a three-quarter vote is to
fund what the governor sees as necessary to complete the services to the people of the state of Alaska for FY26.
And all members in the legislature should acknowledge that.
Please proceed.
making our earlier slide chart. As you can see, the governor's budget is primarily composed of
matching funds towards federal funds. So this is unrestricted general funds only,
and of that, 82% of our capital budget
is specific to matching federal programs. Department of Transportation and Public
Facilities has the largest component of
that at almost 70%
of the capital
budget.
So if I move on to slide number 11
Just a few items to touch on in the capital budget under the Department of Commerce
Community and economic development. We have
15.3 million dollars utilizing ocean ranger receipts
They would go towards the Alaska Energy Authority towards cruise ship terminal port electrification project
in The Department Of Environmental Conservation
Those are our two federal programs, one for village safe water
and wastewater infrastructure.
You can see there's $18 million there towards match.
And then $51 million for the clean water
and drinking water grant program,
which requires $37.8 million in match in the department
of fish and game.
We have the continuation of three capital projects
that we have seen historically.
Over the last couple years 3.3 million dollars for the Gulf of Alaska Chinook salmon program
825 thousand dollars
for continuing the Alaska Marine salmon Program and then
6.8 million of federal receipts for The Pacific Coastal Salmon Recovery Fund
Moving on to the Department of Health, we have a continuation of our Mental Health Trust
Capital project for home modification and upgrades of
for retaining housing under the Department of Military and Veteran Affairs.
We have significant federal receipt authority coming to the state of Alaska,
$5 million for public protection and infrastructure support,
$27 million dollars for the State's Homeland Security Grant programs,
$25 million dollar for deferred maintenance, replacement and renewal.
This is specific to armories across the
And $1.8 million for the Air National Guard
Modernization and Sustainment Project.
In the Department of Natural Resources, we have the continuation of the Forest Inventory Initiative and the Sissitna and Tanana Valleys.
As well as continuation, of our land and water conservation grant program.
This is $4.8 million federal program that we match with $1.9 million in state funds.
And then lastly, $12 million dollars in federal receipts for our cooperative forestry and fire programs.
Thank you, I just noticed on the Tongass, on
the timber receipts for the forest inventory initiative,
is there any open items in the
Tongess that we need to identify
roads that should be actually classified as roads, and
maybe you could check and get back to, you know, then,
Senator Keel I'm sure it would be very interested to also support
Thank you, through the Chair, Senator Steadman.
I will have to follow up with DNR.
I have not had a conversation about, but have heard conversations occurring.
Thank You Senator Stidman
Okay, on slide 13, under the Department of Revenue,
I didn't want to list every single project,
but we have our standard Alaska Housing Finance Corporation annual housing programs.
as well as our public protection or teacher housing programs.
The AHFC dividend 22.9 million of it is used to match those programs
And then within the Department of Transportation and Public Facilities, we have our first supplemental item,
$70.2 million associated with the statewide transportation improvement plan match.
As you will note, this is the item that was utilized re-appropriations last session and was vetoed.
This would restore that money using specifically unrestricted general funds.
Under that, we have the continuation of the fiscal year 2027 budget.
So it's $107.8 million in match for
those federal programs under the state wide transportation improvement plan for highways and aviation.
One new change that we have in the Department of Transportation is the movement of the statewide deferred maintenance
capital project
Typically this funding that comes from the Alaska capital income fund is directed to the office of The Governor
In an effort to reduce paperwork transfer transferring all over
We are placing this within the department of transportation and public facilities
the facility services
Division and the Office of Management and Budget will continue to work closely on administering this funding
But we'll be located in the is proposed to be
Located in The Department of Transportation now and then lastly we have 27.5 million dollars for the Alaskan marine highway system
vessel overhaul and annual certification and shore side
facilities rehabilitation
Many legislators have been contacted
regarding the the funds that the governor vetoed for the
statewide
transportation match of
70 million dollars
the I think many people feel that
There is assurances that
the Funds may not be needed
immediately but for
for the assurances of the
businesses out there that depend upon these I think it would be
prudent to take care of this
Supplemental as early as possible that would lift the weight off of
the concerns of many of The contractors out their wonder if you might comment upon that
Chair Hoffman, so I am aware of the conversations and the current concerns
that have been expressed in my conversations with Commissioner Anderson
and Commissioner Andersen is my understanding he will be here tomorrow
to further this conversation, but the funding isn't needed.
immediately today. If the legislature chose to pass an appropriation bill early to address
this item, that's the prerogative of the two bodies. We have provided it as a supplemental
and in a hope that it would be addressed before the end of this session so that DOT has the money
to addresses obligations before end the close of fiscal year.
Page, Senator Steadman.
Got a couple, just on this issue here with the match.
I think we're going to go into that in detail.
I mean, we'll go through each individual veto in the ramifications.
But at the Senate Transportation Committee last week, as I recall,
and Senator Keel was there, that the department felt that you need the money
until the end of this budget cycle.
That they're they are okay through September, but we'll go into more detail and put a finer
point on that and clearly the
Sooner we get it done a less
Concern will be out in the public on the issue,
but I'm going to try to clarify it exactly what we're dealing with
coming up on
Another issue the first item department or revenue
A couple of years ago, we put in a small amount of money
to the Alaska Housing Corporation.
And they were to play referee between the University DNR
and mental health on using that pot of
money to move some subdivisions forward that
were uneconomical according to those three entities on land
they had.
taken place and it's been well received and has worked.
So I think, Mr. Chairman, we should look at that again
as a component part of trying to get some land opened up
for subdivisions across the state.
I mean, most of that funds, if not all of it,
was spent up north, north of southeast, which is fine.
The department, or excuse me, Alaska Housing,
Upon the submissions from the University DNR and and mental health
and I know the governor has got some kind of
Plan or concept to try to help with that available land issue
So I think we should take a look at those two and possibly combination
But it is something that we did two years ago. We didn't have the money last year to add to it
but it was very successful from what I hear so we can have Mr. Chairman and your convenience
maybe have those entities come in and talk about it because it does get some land out and
badly needed housing planned out to the public. Thank you, Senator Stidler.
full-time positions budgeted versus full time positions filled in the state of Alaska and where we are right now
New this year. We added just a frame of reference for where.We were last year
in December 2024
So approximately
15,000 employees with 13 just over 13, 000 filled positions
This is something that the committee has asked for in
the past
Provided it again this year is just a frame of reference
And I'll go if it's okay with the committee. I move on to slide number 15. Oh, I do have a question on that
In this budget for fway 27. Have you included a vacancy factor? And if so, what is that?
Chair Hoffman so each agency is going to have a different agency factor
We can follow up with the committee on what each of those are there is a vacancy factor included in every in
Every agency's budget
and so that means that we have
Short-funded those agencies if you were to compare having those positions filled a hundred percent of the time
We expect that there will be vacancy in agencies as we're experiencing. Thank you
Senator Steadman. Thank you, Mr. Chairman one subject. I don't see in here and that's funding the unfunded liability
my understanding is
Again, we're in the very beginning of the of a budget cycle
But the Alaska Retirement Management Board suggestion maybe a hundred and six million
I think the governor submitted seventy three or seventy five point three million
and the
One is we recognize that Governor Scott is a veto authority, he can set the number.
If we set it above it, it could veto it down.
So there's no issue there of that understanding.
But the concern is tackling that unfunded liability.
And over the last decade, in 2015 through June of 25,
it's preliminary numbers.
2015, we added an extra billion in per's.
to the unfunded liability.
TURS is another issue, but the concept is the same.
So over the last decade, since 15 through June of 25,
the unfunded liabilities decreased by about 200 million,
which is good to realize we put in 2 billion.
I expressed it last year that we're not getting this unfunded pension liability under control.
It's gone on far too long and it looks like it's going on for the next couple of decades
in front of us.
But when we spend $2 billion to decrease at 200 over 10 years, $200 million, and we'll
go into more detail, I think, in a future hearing on the subject, this isn't the discussion
changing the retirements, so this is just managing the liability that the state has and the
liability the communities have.
So we've spent a significant amount of money.
And I think we need to take a look at that, Mr. Chairman, similar to last year when I
Through 13 through 23 these numbers. I'm talking about today is 15 through 25 kind of moving along
But the trend is the same
And to me it's alarming
Because that money that's going to that unfunded liability to be going in the fixing the school that fell down or
Increasing salaries so our teachers are more competitive or fixing adult in highway. So we can move our pipeline
pipe up and down the highway
But we've got to feed this
Alligator that's on the table every every year that
Very few people recognize or even want to talk about because it's kind of ugly
and
We can't avoid it. So anyway, Mr. Chairman, I just thought I'd
Maybe hear from what
Administration's view point is and if those numbers seem to be off from
What you submitted?
Compared to the request from the arm board
Through the chair, Senator Steadman. So, you know, the arm board goes through a pretty meticulous process of looking at a variety of scenarios on an annual basis on on what they can do to address future costs,
the unfunded liability, and you they have very talented and expertise available to them. They went through that process.
our fiscal environment, the governor chose to continue with a previous methodology that
extended or provided...
Smaller appropriation in the budget and continued the rate smoothing out into the future
I mean, I do not pretend to be an expert in retirement
There are very talented people that can come before this committee and explain but
what we're seeing you know, we've had a lot of conversations in The past about 10 year plans and five year Plans and
what the future looks like and we have a short period of about five years where the states
resources based on projected revenue and what you know production that we
have coming into the state don't quite meet the needs of the State of Alaska.
After that five-year period we start to see other projects coming online and
And maybe after that five-year period is when we can start to address larger items,
such as the Unvended Liability, but right now, until we have a fiscal plan in place,
we are limited in our ability to fund everything.
Senator Stegler.
This is a quick follow-up. We're going to go in more detail on just handling this
unfunded liability, which again is
a separate issue than other conversations and other legislation.
The municipality is capped at 22% of the aggregate payroll
for the unfunded liability.
Roughly 13% that's going for or created by
the unfunded liability and the state picks up north at
22%.
But 13, you take a look at Anchorage, Fairbanks,
Catchcan, Keeneye, pick your town, right?
13%, of The aggregate city halls payroll.
It's going to this unfunded liability and that comes out of property tax or sales tax
It has got to come out. It is coming out at the height of the average Alaska that owns a home
And the quicker we can get this under control and eliminated
That's a huge burden on all the communities
I don't know what the 13% payroll of
Anchorage or
or
Any other communities around there Palmer, Wasilla
All of them, I mean, they're massive dollars.
So it is a concern, and I'm heading towards retirement
the next several years.
I'd like to see my property tax go down,
but I don't think I am going to live long enough on this one.
The way it looks, fortunately, Mr. Chairman.
Are you worried about collecting your retirement?
Well, thank you, Senator Stidman, senator Keoh.
Thank you, Mr. Chairman. There's beautiful words at the end there about Senator. We're Senator Stebman is heading
Mr.. Chairman I
In this there's not actually a lot of daylight between me and the senator sitting to my right
I recall in 2014 when one of the co-chairs of this committee at this table was behind a move that that reamortized
our obligations and pushed payments
off into the far distant future.
It was part of why after, you know,
in the intervening 10 or 11, 12 years of making payments,
we hadn't paid down the lump sum
because it was a deliberate choice
to shift the payoff out in time, out toward the end.
And the reason for that,
Was the dream of the next big boom the reason for that was made explicit was said right on the record at this table
We want to keep cash around for our equity investment in the gas line. That's closer today than it's ever been I
Heard that recently, but I can't remember where
So mr. Mm. I
Guess I
With great respect
For the difficulty of balancing this budget. Um, I'm not sure
that shorting the pension obligations that we have
or shortening the arm board's recommendation
so that in just a few years when the gas line comes,
everything will be fine.
I'm not sure that's a strategy that is likely
to work for Alaskans.
Certainly, if we'd done it in 2014,
we would be in a world of hurt today.
So it may not be the place to shrimp.
Well, it's just like the conversation that's going on today about mortgages.
You have a 25-year mortgage and people are talking about extending that to a 50- year
mortgage.
That's bad financial decisions.
Thank you, Senator Keel.
Sanders, please proceed.
Continuing the conversation about vacancy rates,
just providing a snapshot of where we are currently,
well, as of December.
So statewide, 15.3%, you can see across the agencies
where each of those land, and then where
we're overall as a state,
and providing history going back to 2017, excuse me.
So just just providing information that has been requested
from the committee
Please proceed
Mr. Chair, this is Senator Kaufman. Thank you through the chair just a quick question. So the staffing
And as shown here and with respect to to the administrative order 358 hiring
is there a
a criticality process or something that helps decide where we really need expertise and so
and I guess the contracting plan sort of the holistic plan of managing expertise in the view
of staffing of vacancies openings if you have somebody in a
critical area I don't know financial management or or IT are we able to get the
people that we need for the ongoing operations that
we needed to do.
through the chair, Senator Kaufman.
So there's just two remarks that I'll share
with the committee just off the top of my head.
So yes, we do have a waiver process
that, I am involved in as well.
The commissioners are also involved
in evaluating exactly what positions
they're looking to fill.
We have natural attrition between retirements
and people leaving state government
and or transferring within state
other jobs. And so, yes, the departments work very closely with the Office of Management
and Budget to outline what the critical nature of that position is and why it is so important
to continue to fill that
position. So, there are blanket exemptions that were included in the executive order
personnel such as troopers and correctional officers, but there is also a waiver process
that we have implemented that people go through. I think the other note that I'll just say is, you know, as we've seen
the decrease in state revenues
you know that that really is pushing us to want to ensure that we are filling positions
that are most critical or that could be delayed for example and you I don't ever want
to be in a position where we have a crash in the market and oil drops down to $40 a barrel
and we're trying to figure out what we do to move forward to get us through the fiscal year.
Be proactive. It's it's good for us to evaluate and I will say
We don't we don t just focus on administrative positions administrative
positions are also key to making sure the operations of the state are
continuing to function as they should and that we are meeting the expectations of
you know reporting to the federal government and closing out a fiscal year
ensuring that payroll gets met. So we do we take that very seriously and
ensuring we're getting positions filled as quickly as possible. One thing we run
In the state we may not get applicants and that is something that departments face all the time
Sometimes they put a job out there and they they don't get an applicant and you know, we
Have to extend so it's twofold on the administrative order one scrutinizing how we're proceeding with filling
But then also how do we get applications to apply for jobs in the State of Alaska?
Thank you senator Kaufman. Thank You senator keel
Thank you, Mr. Chairman Sanders.
Can you talk to us a little bit about how long
that waiver process is taking?
I'm trying to remember the fall permanent fund
corporation board meeting.
They said investment officers were, I think,
plus 45 days to be able just to put them out there.
Is that improved?
Through the chair, Senator Keel,
I have seen waivers move as quickly as five business days.
A certain reason that one particular happened to happen that way
But we we do get them trans transferred through the process fairly quickly
Senator keel, but it thanks mr. Chairman be good to get
Maybe maybe some numbers mean and median something like that
It is concerning that we're still in this this place. I understand when the the price of oil first dropped
but
agencies are having real trouble, very few agencies have people, have positions filled
that are doing stuff that's not real important, but those jobs got cut a long time ago.
And so, you know, I'm talking to folks in agencies who aren't able to move forward their
efficiency projects, IT projects like the one Senator Kaufman talked about earlier in
that stand to save the state real resources in the future.
They're stalled.
The agency has something else they have to bring forward
and they can't bring everything to get a waiver.
So you are rapidly running into real challenges
within the executive branch in A, getting the work done,
but in B,
getting them worked on efficiently for Alaskans.
Do you have any prediction on how long this
This it's got to go to the governor's office system is going to stay in place
Through the chair, Senator Keel, I see it continuing into the future.
I think there is always an opportunity to evaluate the positions that are being requested for recruitment.
There are examples that we find where there's opportunity
to find efficiencies with positions doing work.
And sometimes that takes reviewing the position and seeing what duties are they doing and how can we do it differently.
if I can proceed to the next slide.
Please proceed.
Because I think.
I'm sorry.
We'll be on six.
We're still on slide 16.
Yep.
Or well, 15.
Okay.
No, I got the question on 16, okay.
Sure.
Hoffman, that was where I wanted to go with my remarks if it's okay, so.
you know, setting aside administrative order 358 and moving
into the next two administrative orders
that we've been working under in the state.
So I'm going to start with administrative
order 359 and budget efficiencies.
So this is obviously one that is directed
to the Office of Management and Budget.
My team is working very closely with all state agencies.
And so there are two, I would say two primary
projects that we have been engaged in over the last several months since the administrative
order came on. One is specific to a review with our licensing and permitting committees.
We had a contractor come in and work closely with DEC, excuse me, environmental conservation,
natural resources.
Commerce Community and Economic Development when you're talking about corporations and business and professional licensing and they did a
comprehensive review of the work that they are
tasked with as well as what systems they use and how they process and the timeliness of that process
They came up with over 50
Recommendations where we have opportunity to streamline the word that we do in an effort to
serve our constituents better
How can we reduce the wait time associated with processing a license?
How we can make things more easily accessible online?
And the second phase of this review was creating roadmaps,
so to speak, of all 50 plus recommendations that they have.
Many of the things that our state agencies do could be the, you know, reducing siloed, right, work, and making it so that
DEC and, excuse me, environmental conservation and natural resources are talking amongst one another.
So, all of this, under this budget efficiency, is trying to do just what we're talking about with our personnel, which is
We're not looking to get rid of personnel.
We are looking find ways and use tools that increase our ability to be efficient in the
state and ensure that we're doing what we should be doing to meet the purpose of the
agency in serving our Alaskans.
So, it's out there on our OMB website.
It goes back historically and it provides detailed information on the amount, the recipient,
what it was for at a very high level, but all of that grant information is out
there so that people can start to see where the money in this state is going.
Secondarily to that, we had administrative 360 that came out on this at the same time.
This is regulatory reform.
And so each of the departments has been working closely with the Office of The Governor to
go through several steps right now, and working with The Department of Law to develop a pathway
to review all of their regulations that are out there, any guidance documents that
that regulation process and
The intention is to really one, capture the scope of what we have out there, but as well,
go start a process of going through and reviewing what regulations are out
there and how we can simplify our regulation process to be less burdensome and less outdated,
as a matter of fact. I mean, we talk about, you know, laws getting passed and regulations being
and review why we're doing something,
or why have the steps that we are requiring businesses
or Alaskans to go through.
So very high level, those are the administrative orders
and I'm happy to take questions, if there are any.
I have questions.
Thank you, Mr. Chairman.
On 359, you know, I've worked with,
along with many people at the table here.
numerous OMB directors and the first two bullet items,
I assume they were all doing,
including your position now, which I think you are.
In fact, I can only think of one O&B director
in my 20-some years that I would question,
didn't address these first-two bullet
items just as in their normal operation.
So I just thought I'd...
I would mention that to the public, this is ongoing.
It's not something a new directive on high, all of a sudden,
we're going to have all the directors look in this direction.
But the third item down, the focus on grants for non-state entities
and accounts payable, I guess, will drill into that in detail.
I don't know quite what that is, but I just thought I'd mention
Mr. Chairman that the first two bullets are been ongoing for decades
Thank you, senator Stegman
senator keel
Thank You, mr. chairman miss Anders. Can you
Bring us up to speed a little bit, especially on this last one 360
How much how can you quantify the resources that they're going into this?
Through the Chair, Senator Keel, so each agency has identified a point of contact or
I'm going to use like a special assistant to the commissioner, right, that is working on or being tasked with.
So there is no increase in resources that are being added.
It is utilizing existing.
personnel to go through the process agencies may have a different framework set up as they
May be have their divisions involved with the point of contact
I can't speak to each and every agency
But the intent is that you're utilizing your existing resources to to. Go through this process
Senator keel thank you, mr.. That's a good start sets
15 agencies times 2,000 work hours, so 30,00 hours a year.
You mentioned Department of Law, you mentioned into the divisions what additional resources have been diverted to this in those places.
Through the chair, Senator Keel.
diverting resources, using existing resources.
Reprioritizing work, I think, is how I would classify that.
I don't know that I'd say, you know,
we're adding staff to do this.
We are using, existing staff within the Department of Law
to develop a team that is the expert on ensuring
that we are all following a standard process
and streamlining that process to make sure
that were lessening the amount of regulations out there.
I understand there was no increment, but my assumption is that those lawyers weren't
twiddling their thumbs all day before 360 came out, so there's an opportunity cost, right?
And certainly, I don't know about every division in state government,
but the attorneys build their time.
Can you sort of help us understand,
I'm trying to get a sense of what's going by the wayside so that this can be done.
Through the chair senator keel, you know, it's going to be on a case-by-case basis who depending on each department and what they're doing or what
They're previously been tasked with I can't speak to every single department. I would have to
Inquiry with every one on what? They are doing so.
I don't I Don't have a clear number for you to give you
Keel thank you, mr. Chairman, so I guess not
Not thrilled that we don't know what we're spending but but
Had a conversation with somebody who discussed a similar
Exercise at the beginning of the administration's first term
How did the results of that exercise inform the begining of this one? How are they used?
Through the chair senator tequila. I was not part of That process, so I can't speak to that I
Can follow up with our deputy chief of staff. She is
Rachel Bilesma is working on this project more closely. I'm more closely involved with the administrative order 359
So I can have her reach out to your office if you'd like to talk directly
With her about the process that was gone through or we can follow up in writing with The Committee
Senator keel, thank you, Mr. Chairman, I think that'd be helpful because it sounds like
pretty substantial amount of work has been shifted
from what folks were doing to doing this,
and I know that it was done once before.
So, it'd be good to know.
I guess the last question is,
I I knew at the end of that, 2019 process,
a lot of departments said,
well, we've changed the regulations,
we have done what we could.
We could do more if the law changed.
Do you anticipate bills being brought forward to the legislature as a result of this effort?
Through this chair senator keel. It's a possibility. I don't want to say no that there isn't I think as the departments go through
You know, obviously you're gonna look at the maybe lower hanging fruit a somebody had mentioned that. There is a
Regulatory requirement for a document to be transmitted through telegraph. Well, I know I do not know anyone nowadays that goes through that process
So, you know, I think it's going to depend, and it will be a case-by-case basis, depending on the department.
Thank you, Senator Keel.
Senator Kaufman.
Thank You, through the chair.
Ms. Sanders, this sort of stuff on this page,
I thank a lot of folks know.
There are things that I'm really interested in.
Other than the AO in each case, respectively,
Is there a framework or is there like a plan of work or anything that helps get kind of
into the process and the results and we have some targets here and I'm just wondering,
you know, usually when planning an improvement project, you have kind
of some stated objectives and then you some processes around doing it.
you know with the the hope for end result and how that will be measured I
mean that that telegraph requirement I mean nobody's doing it anyway so it's
probably not slowing down any work while somebody runs around looking for a
Western Union office but so just the kind the effort and then
the expected benefits of it, it would be nice to see what kind of management framework
there is around that.
And that would, I think, get to some of the questions about resources that are being put
to it.
So the plan of work and, you know, the desired objectives and some, and how it's going so
far.
Through the chair, Senator Kaufman, absolutely there is a framework outlined and there are plans that my understanding is at the beginning of February, I think it's the third of february.
The agencies will be posting each of their plans online, so those will publically available as well on an agency by agency basis, but yes, there's a frame work developed.
There is guidance that the Department of Law has been working on to ensure that we are doing things consistently and fall.
a process that's outlined with our Department of Law also engaged in that process.
Thank you.
Senator Kaufman.
Thank You.
Just a quick follow up.
One example, I've previously passed a piece of legislation that gives a provision for the
administration to propose unnecessary duplicated redundant reports or reports that are required
in some format that is not useful.
You know, we've got in statute that provision to produce that report in the form of a legislative proposal that we can reduce doing things that
we don't need to do, not only the wasted production and transmission, but the intellectual property, the time required to develop all that information if no one's really using it.
So that remains there as an open opportunity to reduce unnecessary work.
Through the chair, Senator Kaufman, yes, and that that report is updated
biannually, so I have two issues that one regarding the Department of Law the
The state has filed suit on the Katie John issue on several occasions and have lost miserably
I would like to see how much money we've spent on
on fighting this case and possibly other cases.
If you're talking about the best and wisest use
of our dollars, it would seem to me
that we wouldn't be throwing those dollars away
at cases that I believe that will not win.
So that is the first issue and I plan on following up.
with that and the record that the Department of Law has had on this case and on other cases
and I don't believe that their record is stellar.
The second point that I would like to address that is semi-related to the budget process
highly rated educational system that we have and that is Mount
Edgum. I've had several conversations with the senator that
that represents this area and he has expressed concern that
something is happening there and I'm wondering if the
administration could take a look at what's happening to that
because it seems as though it needs some drastic attention.
As I said, it has been one of the highlights, the stars of our educational system,
and I wonder if Senator Steadman might comment on that.
Well, thank you, Mr. Chairman. Yeah, there it is a concern. I don't know what's going on there.
Delta into it yet, but it is something's going on. We just need to find out what it. Is and fix it
and
You know when we have a school that's one of our top performers.
We don't want to have it deteriorated
So we'll work with the with your office and Department of Ed as we you know go through that process because I can't sit here
And tell you what the issue actually is because. I don t know
Can you go over the student count numbers that give you concern well the
There's roughly about 430 kids, somewhere in that range, 440 at Montage Command School.
And it's normal to have some turnover, kids that don't come back, might get homesick or
have a issue or whatever.
But it seems to be a extremely high number this year.
I've heard numbers that are pushing 100, which would be 1.25 of the school almost.
I need to get that verified by the department,
exactly what's going on.
And if there's kids not returning
and other kids coming in, I wanna know that too.
I don't wanna have it like when you ask a bank
or how many of your loans are in their rears
and they tell you no one are going broke
because they've renegotiated all the loans, right?
One of those games.
Not interested in that.
There's concern from a lot of the students
on some of their recreation issues.
It's a boarding school, right?
You've got to have things for the kids to do,
you know, especially the boys,
to make sure they have less energy to,
in the evening and more, and supervision.
So those conversations, I think, are coming.
We've asked the department that we'd like to
have a conversation with the superintendent
in a department.
Obviously the Superintendent answers to the Department,
so we understand the pecking order.
I don't really, I'd mention,
I dunno what the issue is.
We just need to get it defined and fix it.
Because we need not having our education attention
redirected to the schools that are successful.
We need pay attention to schools
that're unsuccessful or we want their success increased, right?
We wanna have the education system go forward.
So something's going on.
And we'll hopefully work with you in your office in the department have had to
Figure that out and then come up with the solution
You send us do you have comment?
through the chair senator stedman and
Senator Hoffman our chair Hoffman to your earlier remarks happy to follow up
with aji
Cox and
Obtain some information details related to the cases that you noted and
Senator Steadman happy to follow up with commissioner Bishop
I am not privy to those conversations, but we can definitely make provide
student count information to
The committee and the will make her aware that he would like to have those
Conversations thinking the standards members of the committee do you have any
Questions or comments at this time?
Senator Crook.
Thank you, Mr. Chair.
I'm going to go back to the geo-different study, which is, I know I've voiced this concern
with administrations, you know, this is my sixth year.
So the last study was in 2008.
And even, I had no inkling in my body about being in the legislature, but it was very concerning because I represent a very rural district and the geo difference is zero in many of my rural communities.
And that's part of the reason we can't keep people there, especially when there's a private job that pops up.
They just shoot right away because we're not even totally competitive at all.
from the last study is efficient enough to, you know,
without changes that we've seen in the economy over even just in
the past ten years that this is really fair to employees across
the state, so I would really hope the administration may be
possibly look at this and try to get some funding for this study.
Through the chair Senator Cronk, you know as I noted
It's it's not in the budget currently if the legislature decided to appropriate money towards this project the Department of Administration would implement the study but
Resources are very limited right now, and so that item did not raise to the level of priority of meeting our
statutory or contractual obligations
fifth of statutory obligation, I think we understand that.
And we can appropriate money to fix the problem
and the administration could take it out of the budget.
So that money then would be better spent somewhere else.
Generally speaking, across all items,
including the capital budget, the money is so tight,
let's come up with items in the budgets
that the Administration agrees and legislature agrees.
So we don't, so we get as much done as we can.
One of the concerns I have with the issue brought up
by Senator Gronk is when we
get this big project coming at us,
they're going to pay whatever wage scale they have to
pay that 8,000 or 16,00,
I assume everybody has two hands,
working on that project.
Not only the state but all private employers
So that doesn't go unnoticed and if it's equipment operators
The truck drivers at the State level they'll be easy targets for
Two three years of
Of all the work they can stand it very high wages and they're gonna have to pay a
rate
to attract these folks out of out Of Texas and
North Carolina and North Dakota and any place else Pennsylvania any where there's a
Guy that can pass a chemical test and gala can past the chemical tests
So we might want to have those conversations to take a look at some of that stuff or we're gonna be caught flat-footed
Through the chair senator Sedmon and senator crunk. Yes happy to Have those
Conversations as we develop what the ultimate budget will look like
Thank You senator keel
Thank you, Mr. Chairman. I think Senator Cronk is correct.
I'll also just remind the committee that last year we got the results of a statewide salary study.
I showed we were pretty far behind on a lot of what we pay state workers
without regard to geographic differential act.
I would have to dig back in my notes, but I think the Commissioner of Administration told us about $200 million statewide for full implementation.
So, and I don't think I saw even a phased implementation in this budget, so we have a ways to go.
Mr. Chairman, I do not know if there is time, there's an appendix slide here on the tenure plan that has a very interesting new revenue measures line.
I'd be interested in the details on what's included in that.
Director Sanders to give her closing comments and address the two appendices if she would like to
Sanders
Thank you for that chair Hoffman
Senator keel. Yes, so at the back of the bill or excuse me at back the presentation
We provided the just a snapshot of a tenure fiscal outlook that was included in the December 11th budget
During the governor's state of the state, he started to remark about the fiscal plan, comprehensive fiscal
plan that he has introduced.
So I believe there is legislation that has been transmitted to the legislature, at least
to The Senate, that involves multiple components of The Governor's fiscal
plan.
And I'll just briefly touch on them at a very, very high level.
The governor's approach to a comprehensive fiscal plan is one that would not be a tax
and spend. There are several components including things like the constitutional amendment for
the permanent fund dividend that was introduced. Uh there is a spending cap bill uh statutory
spending Cap bill that is introduced uh there's a government sunset review uh board or uh committee
quickly off the top of my head, which one that went towards with the function of ensuring
that the work that departments are engaged in on an annual basis or a rotating basis
is meeting the needs of the state.
And then there are some revenue components associated with it.
He has included a seasonal sales tax.
So that seasonal, seasonal sale tax would be a higher rate during the summer months and
and the winter months. There are other components to it that touch on the corporate income tax.
the oil and gas production, changing that rate temporarily.
I would note, you know, I've kind of touched on it
in the committee meeting as we've talked today
about this five year period where we are looking at
you know reduced revenues to the state to meet our operational needs and once we
get past that time frame we start to see things things being projects escalate
and bring revenue into the State so this comprehensive package addresses the new
revenues line on line seven of the slide before you through a combination of
And looking forward to what oil and gas production as well as projected oil cost will be in the state.
So very, very high level.
I know that those pieces of legislation will before the committee,
happy to help present and coordinate communication on that messaging to the
committee and providing explanation on what that looks like in modeling.
Thank you for that that concludes the business of the committee today
Our next meeting will be tomorrow. Well Tuesday January 27th
At 9 a.m. We will b going over the governor's FY 26 veto overview
See nothing else to come before the Committee we are adjourned