Editor's note: the following article has changed since originally posted. the changes refect the correct name of the bill which could give the Juneau School District energy assistance funds. It also has been changed to refect the correct amount the district could receive from a career/vocational tech education funding increase.
Most City and Borough of Juneau departments are holding the line in their fiscal year 2012 budgets, but some have asked for extra funds from the city, which is making some Assembly members uneasy due to the forecasted deficits in fiscal years 2013 and 2014.
The Juneau School District discussed its budget with the Assembly Finance Committee on Wednesday. School board chairwoman Sally Saddler said that the district doesn’t have an update for the Assembly given the situation with the Legislature.
She said that Senate Bill 84, which initially called for an increase in the Base Student Allocation, has passed both House and Senate stripped of that request. Saddler said there is a career/vocational tech education funding piece that could give the district $427,000.
Saddler said another legislative piece the district is waiting on is House Bill 108. The bill would give energy assistance funds to districts and Saddler said between $730,000 and $770,000 could come to the district. Comparatively, that would be the equivalent of an $83 BSA increase, however this would be one-time infusion of funds, not a sustained increase in aid.
District director of administrative services David Means handed out a budget scenario showing a breakdown of what happens if there is no change in the law (if the governor vetoes SB 84), if SB 84 passes and if it passes along with the energy relief bill.
If there is no change, the city’s contribution to the district will fall by $204,000 and the total district budget will be short $1.1 million. If SB 84 passes alone, the district will be short about $566,000 from its recently approved budget. The city contribution in that scenario is $106,000 less than initially projected. If both bills pass, the district will actually be $171,000 ahead of its approved budget and the city’s contribution will still be $106,000 less than projected (due to enrollment numbers).
Bartlett Regional Hospital also presented its budget Wednesday.
Kevin Sullivan, board member and hospital finance committee chairman, showed a flat census and projected a relatively flat patient population.
Assemblywoman Karen Crane expressed concern about the presentation, because it showed no effort in cost containment. She was also concerned about the hospital’s proposed 7.75 percent rate increase.
“We’re asking every other department to postpone upgrades when they can, we’re really trying to hold the budget,” she said. “To see a 7.75 percent increase, particularly in this economic environment is quite high.”
Sullivan said the increase is something the finance committee struggled with.
“Health care is expensive,” he said. “We’ve tried to push back on costs. This year we’re finishing up a roof that’s six years past its useful life. At a certain point, it just needs to be done. With some capital projects, like the IT infrastructure, Medicare was saying ‘through the health care reform act you’ve got to do this. If you don’t do this you’re going to be penalized.’”
So in trying to work through the health care reform act, formally known as the Patient Protection and Affordable Care Act, and keeping an eye to making the hospital more efficient, the hospital kept the $7 million budgeted IT infrastructure upgrade.
He said in some instances the committee did push back against budget increases. Sullivan said hospital administrators came to the board with a list of employee increases twice the size of the one approved.
Assemblywoman Ruth Danner said the presentation showed the hospital doing well compared to others, yet it only has 46 days of operating cash on hand.
Sullivan explained that because of the patient pay mix, the hospital is doing well day-to-day, but doesn’t have a way to build up reserves because of changes in the industry and increases in costs. Sullivan said cash is built up over time and Bartlett has tried to keep costs down. Kristen Bomengen, Bartlett board chairwoman, explained many hospitals that try and keep rates flat instead of continually keeping up with expense increases end up implementing a very high rate increase at once to catch up. She said they’re trying to avoid that by scaling rate increases to meet cost increases.
Assemblyman Johan Dybdahl said he was frustrated because each year the hospital and health care industry comes into budgeting knowing costs are going to go up — and hand-in-hand with that are increases in costs to health insurance.
“How do you stop that?” he asked.
The Juneau Economic Development Council is facing an upcoming shortfall in one of its biggest funding sources — the Department of Defense. Brian Holst, director, presented the city-supported non-profit’s budget, asking for $375,000 in core support funds from the city. The council normally receives $250,000 in core support funds from the city. Holst said the JEDC board initially was going to ask for $505,000 from the city, but paired it back.
Holst said last year JEDC provided a list of items they wanted to fund with the dollars. He said this year, the board didn’t want to go that route.
JEDC is slated to lose funding from the Department of Defense for its STEM Springboard program due to those funds not being renewed.
Assemblyman Bob Doll said there will probably be a lot more federal funding cuts down the road and said the state is the only area with any money. He asked if any of what JEDC wants to fund would be applicable for state funding.
Holst said several legislators have been highly supportive of getting funding for some of the initiatives, and a bill is on the Senate finance side. He said there is a lot of support for helping fund STEM because of the state’s awareness of the need for competitive science education.
Danner highly praised the program, however she was unimpressed with a lack of a budget breakdown, including what projects city funds would go toward.
City Manager Rod Swope cautioned the Assemblymembers on approving the increase. He said many groups have not come to the city asking for more money because they know the city has no extra money and is facing a $7.8 million deficit over the next two fiscal years.
“We are currently in contract negotiations,” Swope said. “We are holding the lines on those discussions. We do not have the money for salary and wage benefit increases at this time. It’s not gloom and doom, but I don’t see an opportunity for that in future years. To grant a request like this, even though it’s valid, will be putting us in a very difficult position. This amount is very close to a salary increase one of the unions is looking for. My responsibility to help you make the most informed decision you can.”
The committee ultimately moved the entire JEDC budget request to the Pending List, awaiting more information on their budget.
• Contact reporter Sarah Day at 523-2279 or at email@example.com.