March 30, 2010

The Alaska State Senate has just passed their version of the FY11 state operating budget. With three weeks remaining in this legislative session, the '24 hour rule' will be invoked by the legislature once the Conference Committee on the FY11 operating budget is announced, possibility as early as next week. This means that the legislature can post legislation for a hearing 24 hours prior to the committee hearing. Expect bills to be moving at an accelerated pace through the legislative process at this juncture, as these are the last days of a two-year session, due to adjourn April 19. Also know that all bills not passed 'die' at the end, meaning work starts all over again the next legislative session.

FY11 operating budget
A detailed summary, including information regarding the differences in proposed intent language regarding a funding ratio, as well as a Senate version of a 3% funding scenario for 'system-wide appropriation' to address the Senate's version with seven appropriations. The full summary is available at: www.alaska.edu/state/fast-facts/

In addition, differences between the House and Senate budgets include the following highlights:

SENATE

4.3 percent increase in state general funds over the current fiscal year, for a total $14 million increment. The Senate proposes seven separate appropriations to the university.

$257,400 of compensation and increases in day-to-day expenses (fixed costs) would not be covered. The Senate budget revised the amount appropriated under the so-called "fuel trigger" by increasing the trigger start point and moving some one-time utility funds to base funding ($1.6 million).

The Senate version would support $950,000 for priority programs. It also includes program funding for the Alaska Natives in Science and Engineering Program at UAA ($1.2 million); the Alaska Summer Research Academy engineering component at UAF ($75,000); technology-based math and summer bridge programs ($150,000); and the Marine Advisory Program, part of UAF SeaGrant ($300,000).


HOUSE

$11.8 million increment, or a 3.6 percent increase in state funds over the current fiscal year. The House proposes a single appropriation (as did the governor.)

$832,400 of compensation and other fixed costs would not be covered. The House budget revised the amount appropriated under the "fuel trigger" by increasing the trigger start point and moving some one-time utility funds to base funding ($1.6 million).

The House version provided $950,000 in program money. Money for ANSEP, at $960,000 was included in the state Department of Education budget.


The operating budget process:
The Board of Regents submitted their FY11 operating budget request to the Governor last fall. The Governor submitted his budget, including his recommendations for the UA budget, to the legislature for consideration in January. The House and Senate have completed their deliberations on their versions of funding to operate state government. Now it is up to a Conference Committee, consisting of three members from each body, typically the co-chairs of the Finance Committees and one member from each House. The Conference Committee will meet in a formal committee setting (towards the very end of session), to negotiate the differences between the House and Senate versions. No additional funding is added to the budget. Only differing line items are open for discussion, and the Committee votes on which number to accept.

Once the Conference Committee is done with their work, the bill goes back to the House and Senate floors for final passage. It then travels to the Governor's desk for consideration. Once the bill is received by the Governor, he has 30 days to consider the budget before it is finalized. The budget goes into effect July 1, 2010. In rare occasions, the legislature has called for a special session to override the Governor's veto items. Typically, the budget stands once it is signed by the Governor without further legislative action.

FY11 capital budget
Now that legislative work on the operating budget is essentially done except for the Conference Committee actions, you will see action on the FY11 capital budget to provide for the infrastructure of state government, i.e. buildings, repairs and renovations, roads and airports, etc. As they say, 'it's not over until it is over' which is certainly the case with the capital budget deliberations. The capital budget is one of the last items of business before the legislature adjourns, as it contains 'bargaining chips' for the various legislative districts.

Key to the capital budget discussions this year is the UA Life Sciences Facility, as well as deferred maintenance. The Senate Finance Committee has held its public hearing on this budget, receiving over two hours of testimony during a statewide teleconference held on March 24th. Senate bills now under consideration include SB 230, (state FY11 capital budget including 37.5 million for UA deferred maintenance, $1.4 million for community campus planning) as well as SB 226 (Life Science/Crime Lab COP funding). Funding for engineering facilities ($10m request from the Regents for planning, and SB 206 (UAA/UAF Engineering facilities).

Postsecondary Scholarships
Hearings on these bills continue through the process, and amended versions of HB 297 and SB 224 includes a 'needs based' component. The fiscal note starts out at $14 million and is accelerated to $35 million five years out. The UA student governance leaders have been very active in supporting a needs-based scholarship, and work continues to sort out the details of the program.

Higher education tax credits
HB 367 and SB 236 provide cash contributions to an Alaskan educational or vocational institution. Under the current versions, donors receive a tax credit of 50 percent for contributions up to $100,000; 100% tax credit for contributions between $100,000 and $300,000, and a 50 percent tax credit for contributions over $300,000 and up to a maximum of $25 million per year. Both bills are in their respective Finance Committees.

UA Land Grant
Hearings continue on this legislation. HB 295 remains in the House Resources Committee after the last hearing.

Kudos
Thanks to all who participated in the recent Senate Finance Committee teleconference on the state operating budget. Your active involvement keeps the University front and center in the minds of the legislators, which is most effective when it comes time to determine budget outcomes.
Stay tuned for one more opportunity to participate in the House Finance Committee capital budget teleconference not yet announced.