The House Finance Committee received its final subcommittee reports Tuesday, March 26, including from the departments Gov. Mike Dunleavy proposed to cut the deepest.

Budget subcommittees rejected most of the $650 million in cuts that Dunleavy proposed, instead suggesting reductions of $38 million in unrestricted general funds (UGF).  

Subcommittees did not consider Dunleavy’s $269 million cut to the K-12 public education formula, which is not part of agency operations and therefore falls outside the typical purview of the subcommittee process.

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Dunleavy’s FY 2020 budget would cut the University of Alaska (UA) by $134 million, or 41 percent.

The UA subcommittee rejected that cut, adopting an amendment from Rep. Adam Wool (D-Fairbanks) that increases the UA budget by $10 million.

“How did the subcommittee come up with a $10 million increase?” asked Rep. Jennifer Johnston (R-Anchorage) during Tuesday’s hearing.

Rep. Andy Josephson’s (D-Anchorage) aide, TJ Presley, replied that the UA Board of Regents originally requested a $33 million increase.  The Board of Regents will prioritize compliance with Title IX, maintenance, and campus safety enhancements using the $10 million, Presley said.

The UA subcommittee voted down an amendment by Rep. Sarah Vance (R-Homer) to cut the University by $77 million.

Vance said her amendment was a compromise, half of the cut proposed by Dunleavy, but she failed to account for a $20 million increase Dunleavy proposed in a separate line item for community campuses.  Therefore, her $77 million cut would have been a 24-percent reduction to the UA budget, not 20.5 percent as her amendment claimed.

Dunleavy’s largest cuts fell on the Department of Health & Social Services (DHSS).  Under his budget, DHSS would be cut by $337 million UGF, including a $225 million cut to Medicaid and the elimination of the preventive Adult Dental Medicaid Benefit.

The DHSS subcommittee concluded that most of Dunleavy’s cuts, which require federal approval, are unrealistic.  However, House Health & Social Services Co-chairs Ivy Spohnholz (D-Anchorage) and Tiffany Zulkosky (D-Bethel) said they are willing to support $58 million in general fund savings from Medicaid.

“With the limited information and the limited time that they had, they wanted to show good faith effort that they were looking at the Medicaid budget and trying to provide some information to the full Finance Committee when you start your deliberations on the budget,” Johnston’s aide Erin Shine told House Finance.

Expect amendments to that effect after House Finance adopts a committee substitute for the budget Thursday.  That CS will have all the subcommittee recommendations rolled into it.

DHSS will report to House Finance on Wednesday regarding potential Medicaid savings.

House Finance Co-chair Tammie Wilson (R-North Pole) questioned why the DHSS subcommittee approved an amendment allowing $30 million to be moved anywhere within the department, even though all subcommittees stripped similar unconstitutional language by the Office of Management and Budget (OMB).

“If it’s not legal, we probably shouldn’t do it,” Wilson said.

Johnston explained she was trying to provide DHSS flexibility, but she is open to an amendment removing the language.

Even though the University and DHSS dealt with much larger changes, the subcommittees that drew some of the most intense scrutiny Tuesday were for the Department of Law and the Judiciary.

With a 4-4 vote, the Judiciary subcommittee declined to re-open the courts on Friday afternoons, causing some concern in House Finance about a backlog of cases.

“What the court system said unmistakably was that what was even more important was pay equity for its staff,” explained Josephson, chair of the Judiciary subcommittee.

The questions got so intense that Doug Wooliver, deputy administrative director for the Alaska Court System, walked across the street from the Juneau courthouse to the Capitol, unscheduled, to provide clarity.

“The court has always wanted to re-open on Friday afternoons,” Wooliver told the committee.  “It hasn’t proven to be a major bottleneck in the justice system to this point.  Nevertheless, we wanted to open it, and we thought, ‘Well, if the governor is interested in paying the cost to open it, we’re interested in doing that.’”

After Dunleavy asked to include the $3.5 million increase to re-open the courts, the court system amended its budget request.

“It was not in our initial request to the legislature,” Wooliver said.

Wooliver corroborated that a pay increase for court staff is its top priority because the legislature did not include one last year to match increases for union State employees.  Such a pay increase would be rolled into the House Finance CS.

Wilson wanted to know what statistics were used by the subcommittee when it passed an amendment to add two probation officers to the therapeutic court system.

Josephson’s aide, Tom Atkinson, told her that the subcommittee did not request that kind of data, and the court system did not provide it.

“Subcommittee members did not ask the questions you are asking,” he told Wilson.

Before Wilson went through the roof, Josephson interjected, “I think some deference was shown because it’s a co-equal branch and because they’ve been great stewards of our purse and have cut their own budget.  So when they said, ‘We need to grow this thing,’ we listened to them.”

Wooliver came to the rescue, explaining that Fairbanks wants to add a veterans court to its popular substance abuse court, and the current probation officer is at a maximum recommended caseload of 25.

Further, the existing probation officer tied to Palmer’s Families With Infants and Toddlers (FIT) Court, which handles child in need of aid (CINA) cases, is losing federal grant funding because the court has been so effective.  The court needs State funding to replace the federal funding.

Wilson was also dissatisfied with the amount of data used by the Department of Law subcommittee to add five prosecutors.

Josephson told her that one of the reasons subcommittee members voted for the prosecutors is because of high turnover.  Over 40 percent of staff in the Criminal Division have worked there less than a year.

“Why is that happening?  Because their workload is ridiculously challenging,” Josephson said.

In the Department of Public Safety (DPS), a subcommittee amendment to cut Alaska State Troopers by $506,000 to keep spending flat also drew questions.

“Are they going to have the funds necessary to fill positions needed to increase public safety?” asked Rep. Dan Ortiz (I-Ketchikan).

The subcommittee concluded that the Troopers will have sufficient funds, responded Joe Byrnes, Rep. Bart LeBon’s (R-Fairbanks) aide.

House Finance also heard subcommittee reports for the departments of Revenue (DOR), Military & Veterans’ Affairs (DMVA), and Administration (DOA).

The committee will continue to take public testimony Tuesday evening.

Homer, Delta Junction, Glennallen, Tok, and Valdez will testify between 5:30pm and 7:30pm.  Fairbanks, Anchorage, Ketchikan, and Sitka will testify between 7:30pm and 8:30pm.

Written testimony can be submitted to House Finance before 1pm on Wednesday by emailing housefinance@akleg.gov

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