The House Finance Committee continued hearing operating budget amendments Thursday, April 4. The committee voted to eliminate onboard cruise ship monitors and commercial dairies, but pre-K and fisheries management survived.
On Wednesday, the committee voted to retain forward-funding of FY 2021 public education, but it also voted to eliminate $139 million in funding for school construction and repair. The latter will cost the average Anchorage homeowner over $400 in property taxes.
Late Wednesday, the committee adopted two amendments from Rep. Ben Carpenter (R-Nikiski) cutting funding for dyslexia screening and Kindergarten-Third Grade literacy screening added by the Department of Education & Early Development (DEED) subcommittee.
The $320,000 increase for literacy screening was a recommendation from Gov. Mike Dunleavy.
“Reading is essential. Combating dyslexia is essential. But there are other ways than spending $4.9 million to do so,” Carpenter said during a hearing.
When Rep. Dan Ortiz (I-Ketchikan) pointed out the cost of the Dyslexia Task Force amendment was $400,000, not $4.9 million, Carpenter responded, “Well, $400,000 is still a big number.”
“It’s a fallacy to say that the only way to encourage children to read is to spend additional State money,” Carpenter continued. “If we’re having a problem recognizing dyslexia, I don’t know that I would be able to recognize the symptoms, but I think I could probably check out a book from the library, read about dyslexia, and then it would enable me to help see it. I wouldn’t need State funding to do that; I would just need to care to do it.”
Carpenter then moved Thursday to cut operations for the Father P. Kashevaroff Library, Archives, and Museum in Juneau by $215,000.
Ortiz cited testimony from the library that the amendment would shut down the facility, which plays a crucial role in presenting Alaska culture and identity to residents and tourists.
“By stripping these monies, it would greatly reduce the State’s ability to maintain their own investment,” Ortiz said Thursday morning.
“We have $1.6 billion of money that we don’t have, and we are going to take it from people, either in the form of additional taxes or reducing their PFD, in order to keep these State-funded entities open,” responded Carpenter. “That is not what the people wanted when they voted for this governor and his budget.”
The $215,000 increase was a request from the Dunleavy administration.
Carpenter’s move to cut the library operations funds failed along caucus lines.
Committee Votes to Eliminate Pre-K Grants, Then Changes Mind
House Finance Vice-chair Jennifer Johnston (R-Anchorage) offered an amendment to cut $237,000 from the Parents as Teachers program, keeping the same level of funding as FY 2019.
“While this is a worthy program, and while it showed that additional funds might have more of a rural connection than the current funds do, I saw in the past that this funding maybe wasn’t really a statewide funding as much as it should be,” Johnston said.
“It’s pretty clear that cuts in the operating budget are going to exceed $100 million and more. I think this program works, and we should keep it going,” Rep. Andy Josephson (D-Anchorage) countered.
Josephson and Ortiz were the only dissenters to Johnston’s amendment.
Carpenter’s amendment to remove all funding for Parents as Teachers, Best Beginnings, and pre-Kindergarten grants failed 5-6 Thursday, but a separate motion to strike just the $2 million for pre-K grants initially passed 6-5. House Finance Co-chair Tammie Wilson (R-North Pole) and Rep. Bart LeBon (R-Fairbanks) joined the minority in support.
“I oppose this amendment in the strongest way,” Josephson said of the cuts to early learning programs.
Josephson said it is unfair for people to compare Alaska education outcomes to other states that have pre-K funding while cutting funding for those programs in Alaska. He noted that the cuts fall heaviest on the disadvantaged.
“90 percent of a child’s brain development happens before age 5,” Ortiz said, adding that pre-K increases future economic earnings by seven percent for participants.
“It’s about where… our priorities are,” he said.
“This is a personal responsibility of parents who have kids to educate their kids,” Carpenter argued. “The responsibility is not the State’s.”
After getting clarification from some affected grant recipients, Wilson later moved to rescind action on Carpenter’s cut to pre-K. She noted that the grants are competitive and the children are tested throughout the program to gauge its effectiveness.
“It’s in the Alaska Constitution for a reason,” Wilson said of public education. “These areas don’t have the Head Start program or other types of pre-K.”
“I believe people are moving these forward based on emotion and not on facts,” said Rep. Colleen Sullivan-Leonard (R-Wasilla).
Sullivan-Leonard said she didn’t have any information on recipients to inform her vote. After pausing to look down at a piece of paper on her desk, she then conceded she had “a little information.”
“Maybe that helps. Maybe it doesn’t,” she said.
“Ultimately, what we’re teaching our kids is to look to the State to solve our problems,” Carpenter said, defending his amendment one last time. “That is what’s at stake here.”
The cut to pre-K then failed along caucus lines.
A Carpenter amendment to eliminate the Alaska State Council on the Arts also failed along caucus lines. Carpenter said that the Council is able to bring in enough private money to stand on its own, but Wilson noted that less than $700,000 of unrestricted general funds (UGF) leverages $3.2 million on federal and other money.
“This is an example of what works with State participation,” LeBon agreed with Wilson.
House Finance Co-chair Neal Foster (D-Nome) added that the Council plays an important role in suicide prevention in rural Alaska.
Carpenter later spoke against a Dunleavy amendment to accept $100,000 in federal funds to distribute USDA food for school breakfasts and lunches.
“Who can say no to our kids having food?” Carpenter asked before arguing that it would increase the federal deficit.
“At some time, we have to say enough is enough,” Carpenter declared.
“I can’t fix Washington’s problems,” Josephson responded. “But no one in Washington is going to take note if we reject their funds, certainly not $100,000. If we take that logic to its extreme, we wouldn’t take any highway money.”
The amendment later passed without objection.
Committee Votes to Defund Ocean Rangers, End Commercial Dairies
House Finance adopted a pair of Dunleavy priorities in the Department of Environmental Conservation (DEC).
Rep. Kelly Merrick (R-Eagle River) offered a series of amendments to defund the Ocean Ranger program that Dunleavy is seeking to repeal (HB 74).
The Ocean Ranger program was created in 2006 via ballot initiative. A four-dollar tax on cruise ship passengers funds live-aboard cruise ship monitors. The program pays for itself, does not impact the deficit, and actually provides surplus funds to other DEC programs.
“We’re not talking about any impact on State finances here,” Ortiz said.
Merrick said that the program is ineffective and eliminating it will reduce DEC’s administrative burden.
“To say that this program is ineffective is a simple statement, but I don’t know that there’s any evidence to back up that statement,” Ortiz responded. “There is a deterrent effect by the presence of the Ocean Rangers… The statistics speak to that.”
Josephson cited a history of cruise ship pollution and recent news reports that air quality aboard the ships is comparable to Beijing.
“The industry will push as hard as it can possibly push. Without an observer there, it’s likely to push harder,” Josephson concluded.
Sullivan-Leonard and Wilson argued that DEC will still retain the ability to monitor cruise ship pollution without the Ocean Rangers, while Carpenter said the Ocean Ranger program is a burden on industry in a time of recession.
“Let’s eliminate the program and allow business to thrive,” Carpenter said.
Ortiz countered that the head tax will continue to be collected from passengers even if Ocean Rangers are defunded, so Carpenter’s argument is moot.
Nevertheless, the committee adopted defunding of the Ocean Rangers. Foster, Ortiz, and Josephson voted against the move.
Lebon and Wilson joined minority members in support of an amendment eliminating a State dairy monitor, effectively closing the state’s only commercial dairy, Havemeister Dairy in Palmer. Without State certification that they are complying with federal regulations, they will not be able to sell milk commercially.
Merrick, who sponsored the amendment, said Havemeister should have included the $180,000 cost of the dairy monitor in their business plan.
“With only one farm operating in Alaska, it seems unreasonable to continue spending $180,000 of State funds to subsidize this one business,” she said.
Funding the State dairy monitor does not constitute a subsidy for any business.
“I do think it’s important to have a local source of food in Alaska,” Johnston said in opposition.
“Is there any other way for the dairy industry to grow and flourish if we get rid of this position?” Johnston asked. “The dairy industry is a very labor-intensive industry. It’s 24 hours, 7 days a week. The only way that you can really make a dairy go is with size and the ability to sell in a commercial venture.”
“The dairy industry over the years has kind of been an emotional piece. There’s almost a romance that goes with it,” commented Sullivan-Leonard. “I kind of have to take that emotional aspect of it out and really look at the true numbers to see how much are we subsidizing, how can we afford it, and is it something that a co-op could take on more effectively and be successful in.”
Multiple committee members noted that there are other dairies trying to come online.
“They see the elimination of this program would be very detrimental to their ability to do that,” Ortiz said. “In the name of economic development and support for small business and the private sector, I oppose this amendment.”
That argument did not prevail.
The committee also passed an amendment from Merrick charging the nascent shellfish-growing industry for their own biotoxin and water testing. LeBon and Johnston joined the minority in support.
Committee Demonstrates Strong Support of Fish & Game
The committee voted to retain funding for fisheries management around the state. Carpenter made a series of amendments to cut it.
Ortiz noted that fishing is a $6 billion industry. The Department of Fish & Game (DFG) is constitutionally mandated to allow fishers to catch the most fish they can without harming the sustainability of the resource.
“It’s not a cheap venture to conduct that management,” said Ortiz. “If they don’t get the data, if they don’t get the information, then they have to manage on a more conservative basis.”
“For this state, there’s no greater natural resource,” Knopp said of fisheries.
Knopp pointed out the State spends more on oil and gas surveys.
“It’s pretty much unconscionable to me that we wouldn’t manage our fisheries,” he said. “It’s a little unsettling that it’s even a consideration.”
Carpenter’s amendments to cut fisheries management failed along caucus lines.
Dunleavy is seeking to transfer the directors of the divisions of Habitat and State Subsistence Research to the Office of Management and Budget (OMB).
Wilson offered an amendment to cut those two positions within the Office of the Governor, noting that they couldn’t perform their prior duties with DFG, but would instead become two additional managers for the administrative services directors (ASDs). ASDs act as budget liaisons to departments and currently have one manager.
“This would be a perfect time for me to say, do you want to give part of your Permanent Fund dividend to grow these two new positions in the governor’s office?” Wilson said, using Carpenter’s most common argument for cuts. “I’ve been waiting all day to say that.”
“Touché,” Carpenter responded.
Wilson’s amendment passed without objection.
The committee also adopted without objection two amendments from Ortiz splitting Habitat and State Subsistence Research into separate budget appropriations to protect their funding after the budget is passed.
Medicaid Takes a Cut, But Avoids Dunleavy-level Reductions
Without objection, House Finance adopted a cut to Medicaid of $58 million. Dunleavy had requested a cut of $225 million.
Johnston, who offered the amendment, noted that House Health & Social Services Co-chairs Ivy Spohnholz (D-Anchorage) and Tiffany Zulkosky (D-Bethel) identified $58 million as an achievable amount. She noted that the Department of Health & Social Services (DHSS) can already reduce Medicaid spending through regulation.
“It’s an unallocated cut or it’s an advisory vote,” Johnston admitted.
Rep. Cathy Tilton (R-Wasilla) tried to increase the cut multiple times.
The largest attempt was for $103 million, what DHSS believes is achievable. However, that includes a $12 million behavioral health grant that falls outside Medicaid and $8 million for preventative adult dental care. Preventative adult dental care is not part of a consolidated Medicaid appropriation the committee approved Thursday.
Johnston said that the legislature has started to make a habit of short-funding Medicaid. The providers are made whole through supplemental budgets, but payments are delayed.
“I do feel we would have some liability if we do take too large of an unallocated cut,” she warned of Tilton’s amendments.
Tilton’s deeper Medicaid cuts were rejected along caucus lines in favor of Johnston’s $58 million cut.
Josephson cautiously supported the cut in light of the news, reported by KTUU, that Margaret Brodie, the director of the Division of Health Care Services was no longer working for DHSS as of Thursday morning.
“That’s given me some pause about the administration’s position moving forward,” Josephson said.
“That is going to be a huge loss,” agreed Wilson. “She was spectacular during a very difficult time.”
The committee rejected along caucus lines a Tilton amendment to close the Nome Youth Facility. Dunleavy suggested the closure in his own version of the budget.
“It’s almost like sending our inmates out of state,” Wilson said of the proposed closure.
On a 3-8 vote, public health nursing escaped a $2 million cut recommended by Tilton.
Tilton’s efforts to eliminate Human Services Community Matching Grants and Community Initiative Matching Grants also failed. The grants support non-profits like food banks and shelters for homeless people and victims of domestic violence and sexual assault.
Wilson joined minority members in opposition to the grants.
House Finance continued consideration of amendments into the evening. Foster announced his intention to finish with the amendment process on Thursday.
The committee had yet to consider deep cuts to the Alaska Marine Highway System (AMHS) or the University of Alaska Thursday afternoon.
If the committee does not finish Thursday, it has two meetings scheduled on Friday and another Saturday morning.
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