Legislature(2025 - 2026)ADAMS 519
02/04/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB53 || HB55 || HB56 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 53 | TELECONFERENCED | |
| *+ | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HB 56 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 4, 2025
1:34 p.m.
1:34:01 PM
CALL TO ORDER
Co-Chair Josephson called the House Finance Committee
meeting to order at 1:34 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative DeLena Johnson
ALSO PRESENT
Lacey Sanders, Director, Office of Management and Budget;
Hannah Lager, Administrative Services Director, Department
of Commerce, Community, and Economic Development.
PRESENT VIA TELECONFERENCE
Dr. Cory Ortiz, Director, Alaska Vocational Technical
Center, Department of Labor and Workforce Development; Dom
Pannone, Administrative Services Director, Department of
Transportation and Public Facilities; Cori Mills, Deputy
Attorney General, Department of Law.
SUMMARY
OVERVIEW: FY 25 GOVERNOR'S SUPPLEMENTAL BUDGET
HB 53 APPROP: OPERATING BUDGET; CAP; SUPP
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 APPROP: MENTAL HEALTH BUDGET
HB 55 was HEARD and HELD in committee for further
consideration.
HB 56 APPROP: SUPPLEMENTAL; FUND CAP
HB 56 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson reviewed the meeting agenda.
^OVERVIEW: FY 25 GOVERNOR'S SUPPLEMENTAL BUDGET
HOUSE BILL NO. 53
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making reappropriations; making appropriations under
art. IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve fund;
and providing for an effective date."
HOUSE BILL NO. 55
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
HOUSE BILL NO. 56
"An Act making supplemental appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
1:35:11 PM
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
introduced herself and the PowerPoint presentation
"Overview of the FY2025 Supplemental Budget" dated February
4, 2025 (copy on file). She explained that she would be
presenting an overview of the FY 25 supplemental budget
requests that had been transmitted on behalf of the
governor the previous day. She referenced AS 37.07.0701,
which mandated that supplemental requests be submitted to
the legislature for consideration by the fifteenth day of
session, which in the current session was February 4, 2025.
She had provided an accompanying spreadsheet [titled FY2025
Supplemental Bill Summary](copy on file) which members
could review in more detail for specific items if there
were questions.
Ms. Sanders advanced to slide 2, which provided an updated
version of the FY 25 budget. The supplemental budget
incorporated the supplemental requests that had been
included in the governor's budget, released on December 12,
2024, as well as the requests submitted for consideration
as of the February 4 deadline. She indicated that the total
amount of supplementals was $448 million under agency
operations, of which $83.2 million was from general funds.
Under statewide operations, the total for supplementals was
$15.1 million, of which $14.3 million was unrestricted
general funds (UGF). The supplemental appropriations under
capital totaled $71.5 million and did not include UGF. The
grand total for the supplemental requests was $543.7
million, with $97.5 million coming from UGF. The overall
deficit of $171 million for FY 25 was reflected at the
bottom of the slide, which was proposed to be drawn from
the Constitutional Budget Reserve (CBR).
1:38:25 PM
Representative Hannan asked for an estimate of how much of
the current supplemental request was one-time funding, as
opposed to items that would be added to the FY 26 base for
the departments as incremental increases.
Ms. Sanders responded that she did not have the specific
number in front of her, but that she would note which items
corresponded with the governor's FY 26 budget request as
she moved through the presentation.
Ms. Sanders proceeded to slide 3, which provided an
overview of the operating supplemental budget requests. She
noted that the information associated with the December 12
supplemental requests had been included but she would focus
on the February 4 supplementals. Under the Department of
Corrections (DOC), there was a total request for $4.1
million for two items that were both also included in the
governor's FY 26 budget request. The first item was $3.9
million for supervisory standby pay, which had been omitted
from the previous budget. The second item was $195,000 to
fully fund the Dillingham Correctional Center's (DCC)
operations. During the previous legislative session in
2024, the amount restored for DCC was incorrect, and the
request would make the total correct amount available.
Ms. Sanders continued that within the Department of
Education and Early Development (DEED), there were two
items aimed at addressing the increased number of students
receiving the Alaska Performance Scholarship (APS) as well
as the increased dollar values resulting from the passage
of HB 148 [relating to tax credits for the Head Start
Program and APS] in the previous legislative session. She
relayed that the fiscal notes had estimated the impact of
the legislation, but the Alaska Commission on Postsecondary
Education (ACPE) had refined the numbers based on actual
student experience. The request would increase both APS and
corresponding Alaska Education Grants (AEG).
1:41:16 PM
Representative Stapp asked how the increase in scholarships
would correlate with the draw on the Higher Education
Investment Fund (HIEF). He acknowledged that it was likely
a positive development that more students were utilizing
the scholarships, but he wanted clarification on how the
increase would affect the draw from the fund.
Ms. Sanders responded that there was a limit on the amount
that could be drawn from HIEF. The total would remain under
the statutory limit and the allowable draw would not be
exceeded with the additional funding for the items within
DEED.
Representative Galvin understood that the $4.1 million in
funding for DOC was to correct an error from the past and
would also cover future needs. She asked how many
supervisory positions were affected by the funding
correction.
Ms. Sanders responded that she could follow up with the
information.
Representative Galvin remarked that she wanted to know the
information because she thought it was a high number that
was supplementing current pay. She commented that it would
be helpful to know if it was only impacting supervisors.
Ms. Sanders replied that she would follow up.
Representative Hannan noted that the same question about
the $4.1 million in funding had been raised in the DOC
finance subcommittee. She explained that the issue was
different from overtime pay and involved supervisory
standby pay. There was a supervisor on every shift at every
institution. The situation was akin to being on call, but
it applied to supervisors in the union. She confirmed that
the answer was that every shift at every institution had
someone in a supervisory role responsible for authorizing
actions.
1:44:19 PM
Ms. Sanders moved down the list on slide 2 to the
Department of Health (DOH). There was a request within DOH
that dealt with changes to the Medicaid projections, which
were finalized on December 15, 2024, after the release of
the December 12 budget. The supplemental request aligned
the projected costs for DOH with its actual expenses and
included $14.2 million in UGF to match $214 million in
federal receipts.
Co-Chair Josephson asked whether there were additional
Medicaid-related supplementals for FY 26.
Ms. Sanders responded that there was not presently a
corresponding increase to the change within DOH, but any
such changes would be addressed through the amendment
process.
Ms. Sanders continued to the Department of Law (DOL) and
highlighted a $4 million request to support ongoing
litigation expenses associated with the A Better Childhood
lawsuit. She explained that over 1.1 million pages of
discovery had been produced to date, and further discovery
and depositions would occur in the coming months leading up
to the trial scheduled for May of 2025. She noted that
testifiers were available to answer questions from the
committee specific to the lawsuit.
Co-Chair Josephson commented that he was concerned about
the sensitivity of discussing ongoing litigation in a
public setting and asked whether some issues might be more
appropriate for an executive session. He acknowledged the
difficulty of balancing transparency with protecting
sensitive legal information. He wanted to defend the state
but noted that the spreadsheet provided by Ms. Sanders also
listed a lawsuit involving the Office of Children's
Services (OCS), and he was unsure if it was connected to
the A Better Childhood lawsuit. He suggested that it was
important for the legislature to understand the merits of
the case.
Ms. Sanders responded that there were concerns about
publicly discussing ongoing litigation. She clarified that
the two cases were not connected. The second case involving
OCS was completely separate and could be discussed later
under special appropriations for judgments and claims. She
would defer to Assistant Attorney General Cori Mills for
further details.
1:47:44 PM
Representative Hannan asked if Ms. Sanders had intended to
skip over the Department of Labor and Workforce Development
(DLWD) section on the slide.
Ms. Sanders responded that she had not planned to cover
every single item and that the presentation was intended to
be a summary. She explained the committee could go over the
provided spreadsheet after the presentation, which
contained all the specific items for discussion. She
clarified that the $888,000 request for DLWD was for the
expansion of the industrial electrical program. The
expansion would double the size and capacity of the program
at the Alaska Vocational Technical Education Center (AVTEC)
and the funds would be used to advertise the program, set
up instructional materials, and prepare the classroom for
the instructors to begin teaching.
Representative Hannan understood that the narrative in the
spreadsheet mentioned that the program would begin in the
fall of 2025. She asked why the entire amount was funded
through a supplemental request.
Ms. Sanders responded that the funding would allow for the
program to be set up ahead of the start date in the fall.
There would also be an increase in the FY 26 budget for the
program, which would take effect after July 1 of 2025. She
suggested that Director Cory Ortiz provide more context for
the funding request.
1:50:39 PM
DR. CORY ORTIZ, DIRECTOR, ALASKA VOCATIONAL TECHNICAL
CENTER, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT (via
teleconference), responded that the request involved many
components, such as programmable logic controllers and
physical lab equipment. The bulk of the $888,000 request
was a one-time cost to purchase and receive the necessary
equipment for the program. He explained that it took time
to procure the equipment and set it up properly in the
classroom. The funds would be used to ensure the program
was ready for its planned fall 2025 launch. The equipment
was essential for the curriculum and setting it up in a
meaningful way for the lab space was time-consuming. He
reiterated that the funds would ensure that everything was
in place for the fall and for the second course offering as
planned.
Representative Hannan asked for clarification whether the
$888,000 allocation was a capital expenditure for materials
and equipment and whether it would be an ongoing cost
beyond FY 26. She wanted to confirm that the equipment
would be in place for the fall of 2025 and that the
supplemental funding would expand the program's capacity.
Mr. Ortiz confirmed that the $888,000 primarily covered
capital expenditures for purchasing equipment and
materials. He clarified that the expense was not ongoing
and the equipment would be in place for the fall of 2025.
There were additional costs related to hiring an
instructor. He offered to follow up with a detailed
breakdown of the costs.
Representative Galvin asked about the anticipated number of
students in the expanded program.
Mr. Ortiz replied that the current program could serve
about 15 students per year and the supplemental funding
would allow the program to accommodate approximately 30
students.
1:53:52 PM
Ms. Sanders continued to the University of Alaska (UA). She
explained that the Office of Management and Budget (OMB)
had worked with the university to clarify how non-federal
grants and receipts were reflected in the budget. The
university had historically grouped non-federal grants
under the designated general fund (DGF), but the grouping
had been revised for more accurate reporting. The
university would also see an increase in funding
authorization to reflect the actual non-federal awards that
were expected.
Ms. Sanders continued to the changes under the Debt Service
category within the Department of Revenue (DOR). She
relayed that DOR had refunded several old debt projects
which would result in a lower interest rate and ongoing
savings for the state moving forward. The next item was the
special appropriations for judgments, claims, and
settlements, totaling $2.8 million. If there were
additional items, the items would be brought forward for
legislative consideration. There was a $3 million
appropriation under fund capitalizations, which was a re-
appropriation from an unused capital project for earthquake
relief costs and would be deposited into the Disaster
Relief Fund (DRF). The Department of Transportation and
Public Facilities (DOT) no longer anticipated using the
funds for the original earthquake-related expenses and the
money would instead help address the low balance in DRF.
Co-Chair Josephson asked if the budget total would change
if the funding was transferred into DRF.
Ms. Sanders responded in the negative. She explained that
the $3 million reappropriation for DRF was part of an
effort to increase the fund balance, which had been low.
The money originally came from an old project related to
federally ineligible disaster relief costs. She explained
that the reappropriation was necessary because the project
had been categorized in a way that allowed the unused money
to be transferred without duplicating spending, as it had
already been accounted for in previous budgets.
1:57:51 PM
Representative Stapp asked for more details on the source
of the $3 million reappropriation. The budget indicated
that source was related to federally ineligible costs,
which implied that it was money that the state tried to
spend on items that the federal government deemed
ineligible. He wondered how the funds would show up in the
budget's fund codes.
Ms. Sanders explained that the original source of the $3
million was UGF and it was reappropriated to avoid
duplicating spending. She explained that the Legislative
Finance Division (LFD) and OMB had a fund code that was
used to track reappropriations. The funding had been in the
system for some time, and it was reappropriated to another
category to avoid duplicating spending.
Representative Stapp understood that the appropriation
began in FY 20. He asked how an individual could ascertain
that the $3 million had been in existence for the past four
budget cycles.
Ms. Sanders replied that OMB tracked the funds by
publishing a capital appropriation status report every
year. The report was publicly available and listed all open
capital projects and showed unobligated funds that had not
been set up yet.
Representative Stapp asked for confirmation that if he were
to pull up the report on his computer, the funds would be
listed as unobligated.
Ms. Sanders responded in the affirmative.
2:00:18 PM
Ms. Sanders continued on slide 4. She highlighted a funding
request under Department of Commerce, Community and
Economic Development (DCCED) for $65 million for the Alaska
Oil and Gas Conservation Commission (AOGCC), which included
a substantial grant application to the U.S. Department of
Interior. The grant would help plug orphaned wells and
mitigate future risks and was expected to bring in around
$40 million. She added that AOGCC also expected a formula
grant to support similar efforts that would total around
$25 million. Within DOT, there was a request for $6.5
million for the Alaska Marine Highway System (AMHS), which
would go toward annual maintenance and repairs for four
vessels. Some of the repair work included steel repairs,
welding repairs, and engine overhauls. The reappropriation
of $3 million from DOT to DRF was also illustrated on the
slide.
2:02:34 PM
Ms. Sanders directed attention to the FY2025 Supplemental
Bill Summary spreadsheet for further discussion on the
items. She noted that she had already covered lines 3 and 4
related to DOC and 5 and 6 related to APS, but she was open
to addressing any other questions regarding the previously
covered items. She invited members to review the
spreadsheet and ask any questions about page 1 before
moving on to the next section.
Ms. Sanders continued to page 2 of the spreadsheet. She
indicated that the items under Medicaid services included
an increase in projections on line 10, and the expansion of
the industrial electrical program under DLWD on line 11.
She highlighted line 19 regarding the university's budget
adjustments to reflect the accurate amount needed for non-
federal grants and receipts, which had been discussed
previously.
Representative Hannan asked if the northern region rural
airport maintenance contract increase on line 18 was both a
supplemental request and part of the FY 26 base budget. She
what "other amount" referenced.
Ms. Sanders responded that both lines 16 and 18 were
related to airport maintenance contractor increases and
were funded through airport receipts generated by the
airport industry. The receipts would cover the costs
associated with the contractual agreements for maintenance
services.
Representative Hannan asked how the state was capturing all
commercial users of the rural airports, particularly
private pilots. She asked whether private pilots were
charged for using the airports or if the fees were only
collected from commercial operators with regular contracts.
Ms. Sanders responded that she would defer the question to
DOT.
2:06:28 PM
DOM PANNONE, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF TRANSPORTATION AND PUBLIC FACILITIES (via
teleconference), confirmed that the state often contracted
with local individuals to maintain small rural airports.
The funding for the maintenance increases came from rural
airport leasing receipts, and the state used the available
funds across its 235 airports. The system allowed the state
to redistribute resources between airports as needed to
cover maintenance costs. He explained that rural airport
leasing receipts came primarily from leasing space at the
airport to private citizens or companies, allowing private
citizens to keep their planes on the property.
Additionally, the Federal Aviation Administration (FAA)
required the spaces to be leased at market rates and the
leasing receipts contributed to the funding of the rural
airport system. He clarified that the funding would be used
as part of a specific system for the rural airports, which
the state managed as a whole.
Ms. Sanders moved to page 3 of the spreadsheet and
explained that all of the items through page 5 pertained to
the university system. She noted that the same issue
regarding non-federal grants and receipts was spread across
the entire university system.
Representative Galvin asked for more information about line
27 on page 4. She noted that there were discrepancies in
the totals. She thought that the amounts listed for the
research vessel, utility recharge operations, new
accounting, and recharge activities added up to $60
million, not $65 million. She asked how the additional $5
million was allocated.
Ms. Sanders responded that the $5 million difference
represented a buffer to ensure there was sufficient receipt
authority to cover any additional items that might not have
been captured.
Representative Galvin understood that the buffer provided
flexibility.
Ms. Sanders responded in the affirmative.
2:09:34 PM
Ms. Sanders moved to page 5. She had already addressed line
37 and 38, which were related to AOGCC and the orphan
wells. She added that there were two IT systems for the
Alaska Energy Authority (AEA) and the Alaska Industrial
Development Export Authority (AIDEA) on line 34. Similarly,
there was a request for a new IT system for AOGCC on line
36. The systems were part of the accounting software
upgrades for the entities. She also highlighted line 41,
which was related to AMHS's vessel overhaul.
Representative Hannan noted that there were no dollar
values listed in any of the categories on line 30. She
wondered if something was missing.
Ms. Sanders replied that line 30 referred to the
Coronavirus State and Local Fiscal Recovery (CSLR) relief
funds allocated to the state. She clarified that $10
million had been allocated to the court system, but the
funding had mistakenly been classified as UGF when OMB and
LFD categorized the funding. The correction was to change
the classification back to the appropriate UGF fund code
for tracking purposes. The line showed zero dollars in the
spreadsheet because it was a technical correction.
Representative Stapp asked whether the AIDEA accounting
system upgrade would come with a feature to prevent bad
investments.
Ms. Sanders responded that decisions regarding investments
made by the boards were beyond her expertise.
Representative Galvin asked about line 36 regarding the
anticipated software purchase. She understood that there
had already been numerous software purchases in recent
years. She requested more information on the reason for the
purchase.
Ms. Sanders asked Director Hannah Lager to provide further
details.
2:12:59 PM
HANNAH LAGER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT, responded
that there was an opportunity for AOGCC to leverage third-
party funds from the Groundwater Protection Council to
replace an outdated system. The upgrade would move the
system to the cloud and offer electronic filing
opportunities. However, AOGCC needed to show it could
participate in the system to access these funds. She
relayed that AOGCC could leverage $1.7 million in third-
party funds, but it also needed to invest state funds.
Representative Galvin understood that the $1.7 million in
other funds combined with the $4.277 million in state funds
would total around $6 million. She asked if her
understanding was correct.
Ms. Lager responded in the affirmative. The third-party
funding did not need to be reflected because the funding
would be spent on behalf of the state. The state fund
portion would be collected over multiple years by AOGCC and
the funds would cover the regulatory costs associated with
AOGCC's activities to minimize the impact on the industry.
Representative Galvin asked if the new equipment would
require additional IT personnel and whether there would be
further costs for maintenance and updates.
Ms. Lager responded that additional IT staff was not
anticipated to be necessary. She noted that AOGCC already
had IT staff in place and significant efforts had been made
to ensure the AOGCC had high-speed internet and was moving
towards cloud-based activities. She clarified that the
upgrade would complement ongoing efforts.
Co-chair Schrage asked how restrictive the DGF funds were.
He wondered if the funds would lapse into the general fund
if not used for the project.
Ms. Lager replied that the funds were fairly restrictive
and were part of AOGCC's regulatory cost charge, which
AOGCC collected through statute to cover operations. If the
funds were not spent, they would roll forward into the next
year, but could only be used for AOGCC's operations.
2:15:22 PM
Ms. Sanders moved on to page 6 of the spreadsheet. She
explained that lines 47, 48, and 49 were related to COVID-
19 funding and would extend the lapse dates for
appropriations made to the state. The extension would allow
the funding to be used in accordance with the expanded
allowances of federal rules. She continued that line 50 was
$4 million allocated for ongoing litigation brought by A
Better Childhood.
Representative Galvin asked whether there had been any
analysis on the return on investment (ROI) for the funds
being spent on legal services to defend the state in the
lawsuit.
Ms. Sanders deferred the question to Assistant Attorney
General Cori Mills to provide more context on the case.
2:17:00 PM
CORI MILLS, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW,
(via teleconference), suggested that she could provide a
brief synopsis of the publicly available information
regarding the lawsuit. She would also address the question
about the ROI on legal expenses. She relayed that Alaska
was not the only state facing such a lawsuit and she
estimated that around half of the states had been involved
in similar cases. She shared that the cases were extremely
costly, and the state was required to produce over a
million documents in discovery and participate in numerous
depositions. In her experience, such litigation was rare
and particularly expensive due to its nature as a systemic
case, as opposed to standard court cases.
Ms. Mills described the case as a structural reform case as
the plaintiffs sought a complete overhaul of Alaska's child
welfare system through the court system. The plaintiffs
aimed to have a court dictate what actions the legislature
and governor would need to take to reform the system, which
made the case highly complex. There was a similar lawsuit
in Oregon where the state spent $18 million on attorneys
before settling the case at the brink of trial. The
plaintiffs were awarded $10 million in attorney fees.
Ms. Mills noted that the state was on an aggressive
timetable with trials scheduled for May of 2025, and DOL
was working hard to keep the process on track. She
emphasized that the state's goal was to represent Alaska's
interests and maintain legislative authority over the child
welfare system. She addressed Representative Galvin's
question about ROI for legal services and explained that
DOL generated significant revenue for the state
particularly through the collection of taxes and royalties,
as well as consumer protection efforts, which often brought
in hundreds of millions of dollars. She pointed out that
the department handled approximately 5,000 cases annually,
with a mix of wins, settlements, and losses. Overall, the
department brought in more money to the state than it cost
the state to operate.
Co-Chair Josephson asked if there might be an opportunity
to recoup some of the legal fees.
Ms. Mills responded that the department was evaluating the
possibility. She explained that in general, Civil Rule 82
allowed for the recovery of legal fees in certain cases.
However, there were specific rules regarding what the state
could collect in such cases.
Co-Chair Josephson asked how the legislature could learn
more about the merits or demerits of the case.
Ms. Mills responded that she would be happy to meet
individually with legislators or provide briefings on the
case in an executive session. She indicated that DOL was
planning to set up meetings with the legislature to provide
more detailed information about the case.
2:22:24 PM
Representative Hannan asked if additional supplemental
funds might be needed for the case. She had read a
narrative for the case that referenced the need for
"interlocutory relief from the appellate court," which
might require a supplemental request for funding in FY 25,
even after the decision in May of 2025. She asked if there
could be another supplemental next year for the case,
depending on the court's decision.
Ms. Sanders responded that the item had been proposed in
the budget as a multi-year allocation covering 2025 through
2027. She clarified that the amount requested for 2025 was
not expected to exceed $4 million, but the funding request
was designed to provide flexibility in the situation that
there were delays or issues extending past May of 2025. She
added that DOL would not know if more money would be needed
until after the trial in May, but the flexibility was built
into the current request.
Representative Galvin noted that line 51 was related to
another lawsuit in which the state was involved. She
highlighted that the request was for $2.7 million and asked
for more information about the lawsuit. She asked if this
case was also a systemic, expensive lawsuit similar to A
Better Childhood case.
Co-Chair Josephson noted that line 51 referred to the Brett
Lane lawsuit. He asked if the two cases were related.
Ms. Mills responded that the Brett Lane case was an
unrelated matter and a complicated case. She explained that
the lawsuit stemmed from the resignation of a state
employee from OCS in 2017 who later sued for wrongful
discharge and retaliatory discharge. The employee had been
assaulted by a client of OCS, which led to the resignation
and subsequent lawsuit. The case went through a jury trial
in 2020 and the jury awarded the employee a sum, but the
decision was appealed to the Alaska Supreme Court. The
court found that the jury instructions were incorrect and
that the amount awarded might have been inappropriate, as
it could have been double-counting workers' compensation
benefits. The case was remanded to the trial court for a
new trial on damages. The original court judgment was for
$2.6 million, but it did not account for workers'
compensation benefits. A global settlement was reached that
settled both the workers' compensation and the trial claims
for $1.8 million, and the remaining amount was to cover
interest accrued over time. She emphasized that it was a
significant case, but it was different from the A Better
Childhood case in terms of its nature and complexity.
2:27:57 PM
Ms. Sanders moved to page 7 and noted that Ms. Mills
already addressed line 51. She explained that lines 52
through 57 referred to the refunding process for state
debt. She pointed out that debts from 2010, 2015, and 2016
had been refinanced at a lower rate, resulting in savings
for the state. The details showed decreases in the amounts
for the refunded debts, with new debt listed under lines 56
and 57. She thought DOR had made significant efforts to
save money for the state through the process.
Ms. Sanders continued to page 8 and explained that line 58
was the corresponding fund capitalization to the debt
refunding on line 57. She noted that there was a
corresponding decrement on line 62. She relayed that line
61 referenced an addition to the budget that ensured that
the capital income fund balance would not be swept into the
CBR and had been appropriated for deferred maintenance
needs. Similar language had been carried forward into the
current year's supplemental budget.
Co-Chair Josephson understood the numbers seemed large, but
UGF was significantly lower.
Ms. Sanders responded in the affirmative.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
HB 56 was HEARD and HELD in committee for further
consideration.
2:30:39 PM
Co-Chair Josephson reviewed the agenda for the following
day's meeting.
ADJOURNMENT
2:31:02 PM
The meeting was adjourned at 2:31 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY2025 Supplemental Bill Summary Spreadsheet_2.04.2025.pdf |
HFIN 2/4/2025 1:30:00 PM |
HB 85 |
| OMB House Finance FY2025 Supplemental Budget Overview_2.04.2025.pdf |
HFIN 2/4/2025 1:30:00 PM |
HB 85 |
| 02.10.25 HFIN OMB Supplemental Budget Follow-up to 02.04.25 Hearing Final.pdf |
HFIN 2/4/2025 1:30:00 PM |
HB 85 |