JAC Index 02062016pm1 Agenda: Committee discussion Budget shortfall measures Medical education funding General appropriations State capital construction Local govt. direct distributions Abandoned mine land funds School appropriations 2/6/2016 5:51:45 PM Chairman for the Day is Co-Chair Ross Roll call by Don Richards: Connolly via phone, Greear excused All others present. Begin with medical education funding, then budget shortfall, local govt, AML, school facilities 2/6/2016 5:53:20 PM Medical education funding LSO 273 1.2 draft Gruver: History of bill and changes. UW request, legislature approval. Tuition and fees to flow for direct expenditures. Question of charging tuition. Bill specifies what the expenditures from the endowment can be spent for. University concern of restrictiveness. Endowment expenditures capped 4% annually. Changes: Add JAC to report. Non-codified section saying you can only spend fees going forward, cannot go back. Open discussion: Perkins: page 3 lines 10-13 – investment income. Does that cover rotations or internships? Gruver: Intended for anyone under the program for the entire time they go through. Assay: special advisor at UW. Program staff concerns about the bill. 1. Include the word fees, on line 15 page 2. “portion of fees and tuition costs”. Perkins: ? Assay: response –clarification, cover costs of attendance. Perkins: full cost of attendance is not just tuition and fees. Assay: It would not be full cost of attendance. Books, medical supplies, Perkins: When you are adding gees, you are not adding medical supplies, other things that are in the list. Limited to tuition and fees. Is that your intent? Assay: No. contract student signs says all costs. Harshman: Statute says costs of attendance for the program, which is broad. Just having tuition may have narrowed it. Trying to codify for current practice. Do we want it to be cost of education? Assay: WWAMI says tuition. WYDENT says cost of education. Trying to make those the same. I am fine with cost of education. Wasserburger: Page 3 – Student thought this money was being used to help students who did not have enough money to go to a rural placement or take national board tests. Is the 4% going to cover the costs of students who need this money Assay: correct. Two streams of money, tuition payment that goes into endowment account and investment income. Concern of using 4% will reduce what can be spent. Wasserburger: 4.5% or 5% would be common practice? Assay: Currently it is 4.5%. Five year period for rolling average causes concern. Would rather do a 3 year average. Stubson: Rural training scholarships. Reason for modifying language. Assay: I believe the and was put in the wrong place when we sent the memo. Question about student moving in the 3rd or 4th year, called dislocation, to do training in rural areas. We use investment income to pay for those dislocation costs. Concern with the language. Add in pipeline development. DOCUMENT WITH LANGUAGE DISTRIBUTED. 2/6/2016 6:11:37 PM Ross: Series of amendments Assay: two amendments mirrored in both programs. Stubson: Pipeline development definition. student recruitment. Burns: better nomenclature Assay: programs that can be used before student is ready for medical or dental school Stubson: change to “student development” Assay: not a problem Harshman: rural training refers to the rural dislocation? Assay: I don’t believe it is dislocation to Seattle. Examples – helping a student in clinical training, does not have to be in a rural area. Burns: moved the bill Hastert; seconded the bill Work the bill: Wasserburger: page 3 line 19 – strike 4%, insert 4.5% Page 3 line 20 strike 5, insert 3 Hastert: second Discussion on amendment to take percentage rate up and average down. Harshman: against the amendment. Mirrors what was done in the Hathaway scholarship. Best practice to be able to guarantee what we say we are going to do. Wasserburger; the funding comes from the students. 12,400 each year Amendment failed. Burns: page 3, line 8 -13, page 6, lines 10-14 amend the bill to the language provided by Assay, excepting delete the word pipeline and insert the word student Amendment adopted 2/6/2016 6:19:32 PM Burns: page 2 line 15, page 5, line 17 Nicholas: friendly amendment. Pay all or a portion of the cost of attendance. Burns: agreed Gruver: Cost of attendance is a defined term, includes fees, both mandatory and not mandatory, tuition, room and board and incidentals. Perkins, Gruver – discussion of language Perkins: limiters in contract. Gruver: talking about what UW pays. UW can scale back or up. Cost of attendance – if contract between UW and Washington does not pay all those things, it will not be paid Ross: Amendment restated. Adopted Burns: both pages 2 and 5, correct. Obrecht: Connolly listening via computer, voting long distance. Richards: called roll – Assigned as a house bill. 2/6/2016 6:25:52 PM Ross: Budget shortfall measures LSO 145 1.3 Gruver: page 7 lines 4 -13 One percent severance tax. This provision just sets up the account. Page 6 – CREG group highlight. Page 11 – lines 4 – 10 – Traditionally available revenue sources. The governor can use existing funds. He cannot use funds available only by changing the law. This definition excludes existing funds. Funds, revenue coming in over 2 year period. You do not count savings, do not count the LSRA. Burns: question of language – double negative Gruver: No. d2 identifies sources, then backs out SPRA Burns: So are you now including? Gruver: no. You first include them, page 11, line 5 identifies revenues. Now you exclude those excluded in 10-13 Connolly: definition of traditionally available revenue sources. Governor cannot use LSRA in putting together budget like he did this year Gruver: no – cannot use savings to determine structural budget deficit. Perkins: page 6 – appointments. What if there is a deadlock on the appointment of the members? Gruver: you have the exact situation now and would probably not have a CREG. 2/6/2016 6:32:48 PM Gruver: Next change – page 19 – List of JAC recommendations to the legislature. Lines 13-15, something different over the long term, LSRA and other expendable funds. If you create something else that is not LSRA… Perkins: Gruver Harshman: Gruver: non exhaustive list, can include what you want to, must identify those Gruver: page 20 – identify the amounts available. New addition page 20 and 21 – recommended depletion rates. Page 21 on are all new. Go into specific and specifically say revenue stream can be interrupted in a general appropriations bill. If you have this in statute, my view is you have had that argument. Page 21 gets into 5% from PMTF. Line 16-22 allows you to intercept the 2.5% going to funds (not GF). You could intercept the GF but that makes no sense. In general appropriations bills for state government, you can interrupt that revenue stream. 2/6/2016 6:38:24 PM Public comment on the bill Bill moved and seconded. Roll call by Richards: Harshman: Rep. Stubson left a vote of aye Bill is a senate file. 2/6/2016 6:39:38 PM Ross: local government distributions LSO 351 1.1 Richards: management council asked JAC to consider moving this forward as both a house bill and senate file. 90M appropriation from LSRA to state lands and investments. Balance of bill is non-codified that mirrors. Dean Tempte passed out handout and fiscal note that demonstrates distribution to county and towns. Richards: Burns: ? Madden matrix Richards: action of committee. Have prepared language for revenue committee option. We do not have that language in the current draft. Burns: copy of distribution under the matrix Richards: would need to print that out Ross: Current funding modal for several bienniums. Hastert: Governor utilized certain amounts of LSRA money and had payback provisions. Our discussion was to payback by half. We modified that. What did we actually spend compared to what the governor recommended? Ability to repay. Method of paying back LSRA in our budget. Trying to get more for cities and counties. Richards: Governor recommended an additional 33 M via the county consensus be distributed. Governor included two payback provisions for use of LSRA. 100M per year statutory severance tax. Legislature is using same funds to backfill capital construction spending, backfill LSRA. Second method to pay back in gov. budget is via potential revenue investment earnings above the 2.5%. To the extent the state earns 5% or more. Those investment earnings are not profiled by LSO or CREG. Perkins: Other bill also affects also? Richards: I don’t believe so. Hastert: Ross: Open for public comment 2/6/2016 6:49:49 PM Obermueller: County Commissioners Organization director – request of 105 M for local governments for operational funding which is a 42% decrease from last biennium. Formula and madden matrix. Sent email to Burns that compares 90M under current formula and Madden matrix. County formula works almost exclusively on population. Ex: Niobrara County will be kicked out du to current inflexible traditional formula. Madden Matrix is supported by organization. Formula for counties and cities is different. We operate differently. Hastert: Can we get information on the matrix? 5 minute break 2/6/2016 6:54:21 PM 2/6/2016 7:04:58 PM Harshman: page 9, challenge Obermueller: page 15, revenue challenge allocation, hardship formula for counties. Cost of government, all counties start with $1.2M, receive more monies are populations increase. Hardship cases based on evaluation of property and sales tax. Scott Badley, WAM: $105M needed. Many towns are below 500 in population. Harshman: revenue challenged communities. 2 components Badley: 11% split between counties and municipalities, split per year, hardship counties/cities Harshman: counties would prefer Madden formula, cities are okay with current formula. Badley: modification of Madden formula Bill moved by Perkins, seconded by Burns. Harshman: amend to make counties Madden formula and will consider second year for cities, seconded. Failed. Hastert: $105M, seconded. Failed. Passed, will be presented in both houses. Abandoned mine land funds. 16LSO-0283, draft 1.2 Richards: Page 3, (i), $76,500,000 to DEQ, (ii), $162.3M to highway department, (iii). $1.3M to DEQ, air quality, (iv) $1.8M DEQ solid waste management, delete page 5, lines 14. Correction page 2, line 4, page 5, line 21 and page 6, line 2 and 11, changes to dates on page 8 and 9. Page 10, line 4, lines 9 thru 12. Bill moved and seconded. Harshman: page 2, line 4, seconded. Carried. Harshman: page 5, line 14-18, motion, seconded. Carried. Burns: page 5, line 21, change figure. motion and seconded. Carried. Harshman: page 6, line 2 and 11 motion and seconded. Carried. Harshman: page 8, line 18, Gray: language will work. Harshman: page 8, line 18 clarification, motion and seconded. Carried. Bill carried. 2/6/2016 7:42:46 PM Break 2/6/2016 7:54:38 PM School facilities appropriations Ross: 2 bills Landen, chairman, select committee on school facilities $207M for school facilities. Governor recommended $85M. School facilities combine 2 lists, capacity and condition lists be combined into a priority list. Hunt, vice chairman: $13M of current on-going, with $80M. cut expansion in Sweetwater County due to uncertainty in project. Ross: coal lease bonuses have funded prior, but dramatic drop. Major maintenance? Landen: first priority should be major maintenance on existing schools. How build schools without coal lease bonus $$? Both capacity and condition issues. Referred to revenue committee. Also will need to fund operations. $3.4B spent on new schools of coal lease bonus monies. $490M has been appropriated for new schools. 2/6/2016 8:12:09 PM Ross: Go through the bill – Matt Obrecht, Tania Hytrek Tania: Bill 338 and bill 146. Mechanism used in the past. This year includes planning, design, construction, unanticipated, land acquisition, school safety and security. Amendment is not in either bill. Burns: Amount of money available? Hytrek: 13,59,0468 dollars. Approximately $5million of coal lease money that is sequestered. (additional) Burns: 18 M must come from somewhere else? Hytrek: correct. 71.6 M under the Governor’s recommendation Hastert: After all of the other fund distribution, does the 13M include the holding account Hytrek: The only item we are discussing right now is the school capital construction account. Hastert: The holding account is available? Obrecht: After the 13M or 18M, the committee must identify which account you want to fund above that. Hastert: holding account in the neighborhood of ? Obrecht: 550M balance today but a majority will be transferred. Hytrek: Statute sets the account. Harshman: If we spend the PLF holding account on school cap con, it will be over in two years. Separate accounts and try to keep operations going. 250M deficient in 4 years even with our plan. If we get the full 5% we will be about even in 4 years. Property values go down and state portion of the guarantee goes up. Need to solve cap con problem, fund out of LSRA. How do we pay for it? This biennium, I think we have to take it out of the LSRA. It has to come out of savings. 2/6/2016 8:21:21 PM Ross: Invite Director McOmie to come up. McOmie: List from SFC – 2017-2018 BFY – 1-14-16 Explained how list was derived. Segments in list List 1 and 2 are security components, about 9M on the table. This is to supplement that. Secure entrances to the school, deterrence factor. Next section (priority 3 – 18). Break point of governor. State focused on capacity in the past. Select committee asked to prioritize capacity and condition. Down through line 42 is break point for select committee Lower are component, land, demolition, ancillary buildings. 2/6/2016 8:28:16 PM Harshman: Statewide surveyor of schools, do this in the spring McOmie: yes, required every 4 years, final draft dec. of this year or Jan of next. Harshman: condition rating or capacity? McOmie: condition primarily. Next year, work on both. Track capacity yearly using data provided by education department. Harshman: Condition study this year. Capacity is ongoing, can change quickly. LSO memorandum, methodology. McOmie: Harshman: directives provided by the select committee. List alternates between capacity, condition. I am on the select committee, chaired for 4 years. SFD priority, needs index priority, not every needs is a construction. Explain McOmie: Item 7. Park county remote school. Gave examples. Harshman: one through 18 are identical in both bills. 19-42 are the same but Governor drew line up higher. 43 on is where the select committee went. McOmie: Correct. Two bills are identical except for the dollars Harshman: 19 through the rest of the list, alternating capacity, condition. Number 25, 29 and 31 have asterisk so they are in progress projects. Hytrek: That is what the single asterisk designates, need a supplemental appropriation to finish the phase. Ex: Laramie county needs 2 M to finish construction on Freedom elementary school McOmie: delineated in the bills. Harshman: 19 through the end of the list alternates. Do the worst first. Does that follow what we have done the last few years with your rules? McOmie: Use higher capacity or higher condition – did not want to stop projects. Department looked based on select committee, Harshman: #19 is capacity issue. #20 is condition issue. 21 is capacity, same school. McOmie: different school Harshman: Sublette 9 is condition? McOmie: condition Harshman: If you did list off your dept. rules and not the select committee directive, would the list look the same? McOmie: It would have been based on capacity. Select committee asked us to look at capacity, condition. Harshman: Farther down would not be kids without seats but design, etc. McOmie: yes, there would be a mix. Gave example Ross: Obvious not selecting the select committee bill. How the hell am I supposed to know from this list what would work, given our current financial situation? McOmie: That is what the commission struggled with. Give us a prioritized list and let us work off the list based on the dollars. Difference in the governor and the select committee. Select committee set list at $206 M Perkins: Priorities one and two for security systems. McOmie: Hesitant to tell you exactly what they are because it becomes a security issue for the schools. Bigger block: Access, flow control in and out of the building. Communications. Exterior locks, classroom door locks. Burns: Multiple schools? McOmie: Every school in the state. Wasserburger: If we fund priority 1 and 2, is that the final dollar on school safety> McOmie: No it is not. 9 M from last biennium and this, with 60 M left. Harshman: Flex for major maintenance. Door locks could be argued to be major maintenance. Gives us some flexibility. McOmie: global picture – School districts do use major maintenance to augment money the department is putting in. Homeland security has approx.. 3 m per year. School grants. Education dept. is working with homeland security and SFD to provide for students and educators knowledge of what to do if incident occurs. 3.2 or 3.3 M per year from homeland security Harshman: capital projects? McOmie: yes. Explanation of process Nicholas: Are homeland security dollars matching or per need? McOmie: per need but we are coordinating with homeland security. Moniz: How do we make a decision here? Rationale for Governor’s line? McOmie: My understanding – dollars he felt he had available in this budget and was working off of the priority list. Committee review over the summer. One year funding within the biennium hoping for a future solution. Harshman: 25, 29 and 31 are single asterisk. 18. Why wouldn’t they be up with modular at the top? Finish what we started type of thing? 24 also. Finney: Intent is to move some of these projects through the pipe. Example: Albany. Priority 25 – district just fixed the site, not under design yet. We looked at projects funded and lifecycle to completion. Wasserburger: Have we ever had schools not receive funding even though they were in the process of being built? Finney: Yes, that has been done before. Massive projects, McOmie: if question is – have we started construction Hastert: Projects on top part of list are ready to go? McOmie: correct Ross: double asterisk 2/6/2016 8:56:37 PM McOmie: Nicholas asked what is your top priority. They said Carey jr high was their top priority. Asked to look at other schools. Asterik is to indicate difference, need mercer study, reviews by commission and departments, recommendations to governor, in the bill document. Nicholas: Meeting last week was they wanted to build a new school by east. McOmie: That is a result of the Mercer study for Carey Jr. High. 5 alternatives. 46M project for building. Funded at about 23M, not enough to build new. Where does the money come from? Nicholas: mercer study is to show the most economical way to deal with it? McOmie: Correct Break: 2/6/2016 9:00:36 PM 2/6/2016 9:15:22 PM Meeting restarted. Ross: Public comment on school facilities Janine Bay Teske – school board trustee from Teton County. Compliments to the committee. Complexity. Timing of school construction with WyDot work in Jackson. Harshman: how many kids in modular? Teske: Over 400. Please think about the consequences to the districts. Try to stay the course. 2/6/2016 9:19:50 PM Kirby Eisenhower: Campbell County. School board decision to open a second high school. Asterisk shows continuation of project. Asking for your support. Burns: What are these projects? Eisenhower: Sports field and tracks. 2/6/2016 9:21:54 PM Representative Freeman: Extension of Rock Springs High School. Acute capacity issues. Former storage areas are classrooms and offices. Use of alternative school to reduce capacity issues. Sweetwater one capacity issues. Modulars. Zoning and planning problems. Harshman: What is the capacity ranking for the high school there? Finney: at 98%, projected to 115% in 5 years. Harshman: ranking? Finney: #8 on the capacity. Hyteck: documentation in memo provided by Landon, page 4. McOmie: How can committee determine priorities? Sheet shows capacity and description. Harshman: This list is not this list. Finney: This is the foundation. You are missing the details. This list was presented to the select committee. Harshman: I do not recall the select committee saying to do the capacity, condition alternation. Intent was to go after the worst case, no matter if it was capacity or condition. 2/6/2016 9:32:34 PM Throne: Laramie county district 1. Carey Junior High. $4 million in site work. 10M spent to move the football field. SFC did not include Carey in the budget. 41 and 42 are listed as capacity for Laramie 1, could go either way. Cost effective remedy study. Ross: item 17, is that the design for Carey? I mean 26? Throne: I believe so. Ross: They need that first? Throne: Correct. They have 3.9 m in design money, need additional 1.2. Would have to come back in supplemental for construction. Ross: priority 41 and 42 are both Carey? Throne: I don’t think so. Landon: That is an elementary school. 23M set aside for that project is an elementary school amount but can be utilized for a middle school but is not enough money. 2/6/2016 9:39:48 PM Farmer: Wyoming School Association. Thanks for long term look, for future solutions. Every priority has a story. Costs increase in the future. Hastert: Road closures around the state. Ross: We can come back tomorrow and take further public testimony or do the bill now. Burns: This will be discussed on the floor of both houses. Harshman: I agree. Amount of money after major maintenance money, 13M, coal lease under sequester is how much? Richards: 3.4M in coal lease bonus money which will be sequestered in 2017. School foundation already received a portion of that. Harshman: We are at about 17M. How do we proceed? Two bills, concept? Ross: Quickest way is to decide what is in or out. Then they put the bill together, rather than working off of one bill. Nicholas: Carbon 1, number 13. Is #8 a capacity issue? Capacity chart shows 98% now and gain 2 or 3 students. How did that become a capacity issue? McOmie: Meets capacity issue but is higher because the design is done. Nicholas: Need will go down in next few years because of decrease in population. Harshman: different levels of capacity. What are the thresh holds? Troy Decker: School facilities dept. 1st 7 columns represent appropriations that the legislature has already approved. Next 3 columns are projects approved. Column 10. Last two columns- broke tie by next five years out capacity. Harshman: 10th column is what we are planning on doing. Decker: That is how the bill before you was prioritized. Harshman: What are those? Decker: Policy 20 – Harshman: To answer Nicholas question - #7 is higher than #8 because we have already spent money to design it. McOmie: We look at these numbers each year, numbers change yearly. Harshman: #11 capacity at Carbon one, 657,000 construction. Go to 13 and there is more construction. Finney: Two different schools in the same school district. 2/6/2016 9:53:35 PM Harshman: motion, dealt with major maintenance, funded department. I move to not include the top two projects but I do move we fund the 10% major maintenance. Motion adopted. Projects 3 – 12, project 18, single asterisk projects, 24, 25, 26, 29, and 31. Total is 15.281 M. Ross: friendly amendment to add 26. Harshman: it is in there. Burns: #36, Sheridan district field, is that design? Finney: planning study. Greear: request for an addition, number 28, land acquisition. Number can be reduced by 200,000. My understanding is 650,000. Harshman: That is on the amendment. – friendly amendment Hastert: Add number 15, handout page 4. Capacity issues. Ross: Dies for lack of a second Burns: Do we want to keep #11, given that it is not really a capacity issue. Harshman: I think it is. There are two separate schools Ross: with design money already. Burns: move to add 10 m to Sheridan school district 2 for the alternative school. Sheridan junior high school. The junior high was hosting the alternative school, which had to move to Highlands elementary. Look to number 330 Highland Park. Select committee had the wrong building. We want to build an alternative school at Sheridan college, would serve 4 districts. Nicholas: Do we know what the design costs would be? Burns: 10M for everything. Dropped off the list because the committee had the wrong information. Put it back on the priority list. Wasserburger: I offer 500,000 to Sheridan for design. Burns: Sheridan district 2 for alternative school. Land donated by Sheridan College. Greear: I think we should locked down what we have, then look at discussing if we are going to pony up 60 or 80 M in a supplemental budget. Ross: Motion on the floor – Motion failed. Harshman: Priority 3 through 12, single asterisk 18, 24, 25 and 26, 29 and 31, 28 for 650,000. Total 15,931,000. Vote on that. Willmarth: do you want to include any on anticipated funding? Harshman: Willmarth: If you add unanticipated new amount would be approx. 17 M Harshman: say not to exceed the amount we have. Ross: Motion adopted Hastert: #23 – Sweetwater 2 in green river, amount for roughly 4 M taken out. Put in 200,000 for repurposing. Ross: heard testimony from school superintendent. Where is the 4M? Willmarth” prior appropriation for these schools Ross: How do we do this amendment? Willmarth: can go back to the prior appropriations Ross: motion and second, approved. Richards: Reduce the unanticipated funding? Harshman: yes Harshman: global motion – set aside 80M out of the LSRA. That would be available for appropriation for next year. Include language for a task force. Will push burn rate up to 8%. Hyteck: Received a proposed motion for a task force forwarded by Nicholas. Harshman: move forward with the 80 M. Ross: 80 M out of the LSRA, not to spent the first year, pending further action Harshman: deadline of August or September. Hyteck: set aside mean transfer of money? Harshman: No – place holder. Ross: six to six – fails 2/6/2016 10:20:57 PM Wasserburger: move amendment for task force, would like to add in 5 members for senate and house, add in the chairman of the Select Committee on School facilities, on house side add in co-chairman of the school facilities. Ross: Will it affect the appropriation? Greear: Adding legislatures to the committee won’t do much good. Make sure we have more people from business, agriculture and minerals industry because they pay the taxes. Ross: Richards: Add 7500 dollars. Wasserburger: friendly amendment Ross: Motion passed. Stubson: amendment to delete the representative from UW, add from business or mineral community Adopted Greear: further amend to make one from agriculture and one from minerals Stubson: one from mineral industry, one from agriculture. Ross: adding one more. Burns: confusion. Stubson: My motion moved it from UW to business, so stayed at 17. Under Greear’s motion it is 18. Ross: Explanation Richards: $1400 for that person included. Greear: yes Ross: Motion failed. Previous passed. Now back on Harshman: page 2 Ross: amendment as amended passed. 2/6/2016 10:31:28 PM Harshman: Leave the vote open? Richards: Harshman: there is no direction for a new list? Burn: Motion that failed was the 80 M placeholder. Ross: Explanation Harshman: move to generate a new list over the interim to be available for the next legislative session and presented. Seconded Perkins: What is going to be different from any other list? Harshman: Because we will have a study of all the buildings in the state. Come back with a clear consensus on that. Perkins: on and against the motion Ross: Motion passed. Ross: conclude business for the day. Richards: Tentative time set aside for tomorrow morning or Monday upon adjournment. State capital construction and general appropriations Adjourned. 2/6/2016 10:37:44 PM