Call to Order and Roll Call
The second meeting of the Budget Review Subcommittee on General Government, Finance, and Public Protection of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, December 2, 2010, at 10:00 AM, in Room 131 of the Capitol Annex. Representative Royce W. Adams, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Jack Westwood, Co-Chair; Representative Royce W. Adams, Co-Chair; Senator Joey Pendleton; Representatives Leslie Combs, Mike Denham, Charlie Hoffman, Adam Koenig, Brad Montell, Steve Riggs, and Wilson Stone.
Guests: Greg Haskamp, Executive Director, Office of Policy and Audit, Finance and Administration Cabinet; Bill Riggs, Chief of Staff, Office of the Secretary, Finance and Administration Cabinet; Beth Jurek, Executive Director, Office of Policy and Budget, Cabinet for Health and Family Services; Mark Offerman, Office of Community Action Agencies, Kentucky Housing Corporation; Thelma Hawkins, Grants Branch Manager, Kentucky Department of Education; and John Hicks, Deputy State Budget Director.
LRC Staff: Debra Gabbard, Tom Willis, and Spring Emerson.
Chair Adams requested a motion to approve the minutes of the October 28, 2010 meeting. A motion was made by Senator Westwood, seconded by Representative Combs, and the minutes were approved without objection. Chair Adams then asked representatives from the Finance and Administration Cabinet to continue the discussion from the last meeting regarding the American Recovery and Reinvestment Act of 2009 (ARRA) funding.
Finance and Administration Cabinet
Mr. Greg Haskamp, Executive Director, Office of Policy and Audit, provided a brief overview and update of ARRA funding. The amount of relief to Kentucky had been just under $3.5 billion, which was comprised of over 2,000 individual grants. Once Congress appropriated the funds, it would go to the 28 federal agencies, which would make the awards. The unifying factor was that all recipients were required to make quarterly reports. Included in the reporting would be descriptions of how the funds were being used and amount of expenditures to date.
Representative Riggs inquired about job training assistance and asked if it would end and the career centers close down when the ARRA funds were exhausted. Mr. Haskamp replied that job training assistance would end, but the career centers would remain open, albeit without the enhanced training that had been available through ARRA funding.
Representative Montell inquired about the amount of tax relief that had been provided by ARRA funds. Mr. Haskamp replied those were national numbers that had been estimated by the Congressional Budget Office, and he added that the Kentucky At Work website would provide a breakdown of tax incentives in Kentucky. In response to a question from Representative Montell regarding most of Kentucky's created jobs being government jobs, Mr. Haskamp said that a large number of the jobs reported were government jobs, but that does not necessarily reflect the jobs throughout the state because so much of the stimulus jobs were not being reported on. That made it nearly impossible to separate public from private with other types, such as outsourcing.
Representative Denham inquired about infrastructure moneys and asked if some areas of Kentucky had been left out of grant applications. Mr. Haskamp replied that many of the ARRA funds were based on formulas for existing programs. Mr. Bill Riggs said that one-third of the stimulus dollars went toward augmenting the state budget.
Senator Westwood inquired about the number of states used a significant amount of their ARRA funds as a budget balancing measure. Mr. Riggs said that 49 states had used ARRA funds to augment or supplement their budgets in some way.
Representative Koenig asked if there was an amount of money that could be directly attributed to retaining positions in child support services. Ms. Beth Jurek, Executive Director, Office of Policy and Budget, Cabinet for Health and Family Services, explained that one of the provisions of the stimulus act enabled states to use incentive dollars that they earned for meeting performance standards as state match, which enabled Kentucky to free up some dollars to do some improvements to the child support enforcement system. Additional electronic tools had been created and operations streamlined, which was an infrastructure improvement that would live beyond ARRA. Representative Koenig asked how many employees had been retained and how much child support money would not have been collected otherwise. Ms. Jurek stated that she would provide that information at a later date.
Chair Adams inquired about the Low Income Home Energy Assistance Program (LIHEAP) and asked how it would be affected by ARRA funds. Mr. Mark Offerman, Kentucky Housing Corporation, said the Community Action Agencies take applications for multiple services, one of which is LIHEAP. Those families get assistance in weatherizing their homes as a means to reduce their energy expenditures. He said that no LIHEAP funds were being used for fuel purchases. Chair Adams asked if they were using ARRA funds instead of LIHEAP funds for fuel. Mr. Riggs replied in the affirmative.
Chair Adams inquired about the use of hybrid bus funds. Ms. Thelma Hawkins, Grants Branch Manager, Kentucky Department of Education, stated that those funds had been allocated through a competitive process using the Request for Proposal for Phase I. Phase II was just completed, and Phase III will begin in the spring of 2011 until the funds are expended.
Chair Adams asked about the $940 million that had been used for Medicaid and wondered how that would affect the future for Medicaid recipients. Mr. John Hicks, Deputy State Budget Director, said that there are no stimulus funds available in 2012, and the issue had been addressed in the biennial budget.
Chair Adams inquired about state relief for clean drinking water and asked how that would affect current projects. Mr. Hicks replied that those projects were separate and explained that the clean drinking water projects had been shovel-ready, and as a result, projects had been added that were not previously funded.
Chair Adams commented that the committee would be losing long-standing members Representatives Hoffman and Siler and thanked them for their diligence and hard work.
There being no further questions, he requested a motion to adjourn. A motion was made by Representative Denham, seconded by Representative Koenig, and the meeting was adjourned at 11:12 AM.