Legislature(2015 - 2016)SENATE FINANCE 532
04/11/2016 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB101 | |
| SB201 | |
| SJR12 | |
| SB196 | |
| SB210 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 101 | TELECONFERENCED | |
| += | SB 200 | TELECONFERENCED | |
| += | SB 201 | TELECONFERENCED | |
| += | SJR 12 | TELECONFERENCED | |
| += | SB 196 | TELECONFERENCED | |
| += | SB 210 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 210
"An Act relating to the community revenue sharing
program; changing the name of the community revenue
sharing program to the community assistance program;
and relating to the municipal property tax exemption
on the residence of a senior, a disabled veteran, and
a widow or widower of a senior or disabled veteran."
10:21:43 AM
Co-Chair MacKinnon discussed the CS for SB 210, which had
been adopted on April 6, 2016. Public testimony had opened
on closed on the same date. She clarified that the
committee was considering bill version H.
10:22:11 AM
AT EASE
10:23:06 AM
RECONVENED
Vice-Chair Micciche discussed the fiscal note, from DCCED
(OMB component 2879); with appropriation and allocation to
Community and Regional Affairs. He shared that the note
showed $6.1 thousand of fiscal impact in FY 17 with no
additional costs, positions, or capital. He relayed that
the committee believed that the department could handle the
minor amount of work resultant from the bill, and it
intended to zero out the fiscal note.
Co-Chair MacKinnon asked for the support of the committee
to zero out the fiscal note. The fiscal note was amended to
zero. She informed that the committee would request the
Legislative Finance Division (LFD) to provide a forthcoming
zero fiscal note.
Vice-Chair Micciche relayed a concern from his district and
mentioned a spreadsheet that showed an increase in
community revenue sharing in some communities, and a larger
proportion of decrease of community revenue sharing in
other communities. He asked if Co-Chair MacKinnon could
explicate and confirm that no communities in the state
would receive an increase.
Co-Chair MacKinnon asked LFD staff to explain the breakdown
of how the state would assist communities under the bill.
ALEXEI PAINTER, FISCAL ANALYST, LEGISLATIVE FINANCE,
discussed the spreadsheet "FY 17 Community Revenue Sharing
Estimates," (copy on file). He explained that under the
status quo distribution of $60 million versus the proposed
distribution of SB 210 (under any amount), no community
would receive more funding under the formula in the
Community Revenue Sharing Program. The bill would change
the way that pro-rating worked, so if one were to compare a
pro-rated base in the status quo program to a pro-rated
base in the new program, it was true that some communities
would be better or worse off. He reiterated that when
compared to the original $60 million program, no community
would receive more funding under SB 210.
Vice-Chair Micciche thought that when some people had
initially looked at the calculations; it had showed an
actual increase for Aleutians East, False Pass, and some
other areas. He asked if Mr. Painter could explain the
logic of the bill and its relationship to the PCE program.
Co-Chair MacKinnon stated that there was a policy decision,
and referred to the SB 196, which had just passed from
committee. She explained that SB 196 had proposed a change
to the PCE Fund structure, in which excess earnings would
be diverted to the revenue sharing program. It was
estimated to be in the amount of $17 million for FY 17. She
considered the two bills to be interrelated.
10:27:36 AM
Vice-Chair Micciche stated that the bill being considered
(SB 210) would change the name of the program from
Community Revenue Sharing to Community Assistance. He
continued that the program funding had been reduced from
$60 million to $38.2 million, half of which was expected to
come from PCE Endowment Fund earnings.
Co-Chair MacKinnon stated that for FY 17, if the fund was
not re-charged, there would be $38,200,000 available under
the current stepdown in statute. She continued that under
SB 210, the pro-rated share would be changed. If there was
expected earnings on the PCE Fund, there would be $17
million to go to the Community Revenue Sharing Program.
Senator Hoffman stated that the governor's proposal was to
spend $50 million on the revenue sharing program in the
current year, and increase the amount to $60 million in
subsequent years. The committee was evaluating whether or
not the state could continue to fund the program at the
same high level. Since the state no longer had surplus
revenue to share, he thought the title change to the
Community Assistance Program was more appropriate. He
thought by changing it to a $30 million program, it would
not necessitate funding an additional $35 million in the
current year. He noted that the fund had $115 million, and
in order to get a three-year average the fund would have to
contain $150 million. Subsequently, the governor had
requested the additional $35 million. If the legislature
moved forward and reduced the program, the state would not
have to come up with $35 million, and there would be enough
funding already to cover a $30 million program. He did not
believe the state could continue on the path it was on. He
thought it was more likely that the program could survive
at the lower funding level. He noted that each legislature
would have to consider the financial conditions of the
state at the time.
10:31:00 AM
Vice-Chair Micciche thought it was unjustified to simply
end the program, and thought the bill was an appropriate
action. He referred to other bills that impacted
municipalities, and thought that SB 210 had a much smaller
impact. He thought that the bill was a healthy compromise.
Co-Chair MacKinnon stated that the bill was from the Senate
Finance Committee, and asked that any input be directed to
her office. She referred to discussion regarding the
definition of "community" and how large a community should
be. She recounted the same discussion pertaining to the
size of schools. She had heard conversation about
considering 50 residents to constitute a community, or
whether 11 members in a geographic area qualified for
community assistance of $96,000. She clarified that the
bill did not propose a change to definitions of community,
but noted that there was an anomaly in the Aleutians East
Borough that had a population of 39 and received state
assistance in the amount of $385,000.
Mr. Painter clarified that the population of Aleutians East
Borough was actually higher, and the 39 individuals were
those that did not live in an incorporated borough.
Co-Chair MacKinnon asked Mr. Painter to discuss why
Aleutians East would get extra compensation if communities
were already receiving funds from other sources.
Mr. Painter stated that there were boroughs with
incorporated communities that received the borough share of
the program.
Co-Chair MacKinnon clarified that the boroughs were
overlaid upon the city or village designations, and both
were getting assistance.
Mr. Painter answered in the affirmative.
Co-Chair MacKinnon asked Mr. Painter to create a
spreadsheet to illustrate the cities with the boroughs
overlaid atop, with associated revenues, to better
understand how the program gave assistance to the boroughs.
She thought the information would also be helpful in the
next committee of referral if the bill was successful on
the Senate floor.
10:35:04 AM
AT EASE
10:39:14 AM
RECONVENED
Senator Dunleavy thought that he would benefit greatly from
additional consideration of the bill. He wanted to discuss
some questions about the bill with staff from LFD.
Senator Olson referred to an earlier discussion about
communities that did not have city governments. He
commented that he would like a list of such communities,
the population, and how much money each community was
receiving from the revenue sharing program.
Co-Chair MacKinnon stated she would be happy to hold the
bill until the afternoon meeting.
Vice-Chair Micciche opined that there were a lot of
legislators that thought that it was time that the
communities with tax authority and/or a fund balance move
beyond community revenue sharing. He thought the bill was a
healthy compromise. He acknowledged that the program was
slightly advantaged to smaller communities that (in some
cases) had the revenue sharing program as its only state
support. He thought there were communities that objected to
the proportional differences. He thought it was a healthy
shift for larger communities that had a greater ability to
provide for themselves.
10:41:30 AM
Co-Chair MacKinnon stated that the conversation around the
creation and reduction of the revenue sharing program had
to do with Senator Hoffman's comments regarding the fact
that the state could no longer afford to share funding it
did not have. She pointed out that the governor was
proposing multiple ways to provide revenues through taxing
different industry groups and individual Alaskans. She
suggested that larger communities had the ability (provided
by the legislature) to tax themselves, and thereby had a
greater ability for self-determination. She noted that the
smaller communities, which had not already done so, still
had the opportunity to tax themselves.
Co-Chair MacKinnon relayed that some of her constituents,
as well as other residents, had asked that all of Alaska be
incorporated as boroughs so as to tax residents and
contribute to education and other activities funded by the
state. She thought the bill was a compromise. Instead of
eliminating all revenue assistance to communities with
taxing authority, the compromise was to reduce to a $30
million program and utilize earnings from the PCE Fund. She
referred to the suite of interlocked bills, including one
that concerned the Public Employees' Retirement System
(PERS) and the Teachers' Retirement System (TRS). The
committee had heard from a variety of people, including
those that were highly vocal and critical of the
legislature and cost-shifting. She discussed PERS and TRS
liability. She thought it was fair to say that more
conversation was needed on the topic. She agreed that
proportionally, smaller communities were protected in a
better way; and noted that if the previous bill went
forward, part of the PCE fund would help lower GF spend.
10:45:08 AM
Vice-Chair Micciche thought Co-Chair MacKinnon's remarks
were well stated. He related that he tried to be able to
put himself in other people's shoes. He referred to his 5-
year tenure as mayor of an Alaskan community. He thought as
mayor he would have taken issue with the proportional
change proposed in the bill. He acknowledged the difference
of his current role, as well as the changed fiscal climate.
He reiterated that the bill was an appropriate compromise,
especially considering a PCE Fund shift.
SB 210 was HEARD and HELD in committee for further
consideration.
Co-Chair MacKinnon discussed the afternoon schedule, at
which time the committee would do a full walk-through of
the capital budget. She noted that she would work to move
out SB 210 and SB 196 together so that they could travel
together. She reiterated that the two bills were a portion
of the same suite of bills.
10:46:37 AM
AT EASE
10:47:02 AM
RECONVENED
Co-Chair MacKinnon discussed the afternoon schedule.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 200 Public Testimony Nees.pdf |
SFIN 4/11/2016 9:00:00 AM |
SB 200 |
| SB 200 NEA Alaska Letter.pdf |
SFIN 4/11/2016 9:00:00 AM |
SB 200 |
| SB 210 Community Revenue Sharing Estimates.pdf |
SFIN 4/11/2016 9:00:00 AM |
SB 210 |
| SB 201 Responses to questions during SB 201 hearing SFIN 4.pdf |
SFIN 4/11/2016 9:00:00 AM |
SB 201 |
| SB 210 with $38.2 million vs Status Quo with $60 million.pdf |
SFIN 4/11/2016 9:00:00 AM |
SB 210 |