Legislature(2017 - 2018)HOUSE FINANCE 519
04/10/2017 04:00 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB26 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 26 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 26(FIN)
"An Act relating to an appropriation limit; relating
to the budget responsibilities of the governor;
relating to the Alaska permanent fund, the earnings of
the Alaska permanent fund, and the earnings reserve
account; relating to the mental health trust fund;
relating to deposits into the dividend fund; relating
to the calculation and payment of permanent fund
dividends; and providing for an effective date."
4:03:33 PM
Co-Chair Foster indicated public testimony for SB 26 would
be heard and was limited two minutes per person.
^PUBLIC TESTIMONY
4:04:58 PM
LUANN MCVEY, SELF, JUNEAU, indicated she was a retired
schoolteacher. She urged members to minimize the number of
cuts to the state budget. She thought additional cuts would
substantially affect the quality of life for Alaskans and
would result in job losses in the state. She hoped the
legislature would hold public education harmless. She
relayed that budget cuts resulted in drastic reductions in
one-on-one time between students and teachers in the
classroom. It also resulted in reductions to support
services for students who struggled. In terms of education,
there would be an impact in the future. She was pleased to
see HB 111 pass in the House. She wanted to see the oil and
gas companies appropriately taxed. She favored a cap on the
Permanent Fund Dividend (PFD) and a personal income tax.
She also wanted to see the people in small villages held
harmless.
4:08:03 PM
LAURA STATS, SELF, JUNEAU, spoke in favor of CSSB 26 (FIN).
She had observed several of the House Finance Committee
hearings. She appreciated all of the work of the committee
to create a budget for Alaska's citizens. She particularly
liked Section 19 of the bill and read the conditional
language it contained. She thought the language provided a
more comprehensive budget plan. She had read, in Senator
Gardner's newsletter, that the tax subsidies would amount
to $1.37 billion when the state would earn production taxes
of $87 million. In conclusion, she wanted to see a
comprehensive budget plan passed that represented the
citizens of Alaska rather than corporations.
4:11:27 PM
LUKE HOPKINS, SELF, FAIRBANKS (via teleconference), spoke
in favor of CSSB 26 (FIN). He was a former North Star
Borough Mayor. He asserted that it was very important that
Alaskans had a PFD in the amount of $1250. He agreed with
the sunset date provision as well. He thought it was only
one of the components of a comprehensive fiscal plan under
consideration. He believed the proposed cuts were
manageable, versus the heavy cuts proposed previously. He
also agreed with the restructuring of the oil tax
structure. He thought the bill addressed some of the
dysfunction he had seen in producing a comprehensive fiscal
plan. He did not favor draining the state's savings. He
spoke to the conditional language in Section 19 of the
bill. He favored broad-based revenue measures. He also
supported school funding. He thanked the committee.
4:14:44 PM
LYNETTE CLARK, CHAIRMAN OF THE ALASKA INDEPENDENT PARTY,
FAIRBANKS (via teleconference), spoke in opposition of CSSB
26 (FIN). She believed the bill was unnecessary and that
dollars were available in the Constitutional Budget Reserve
(CBR). She also favored additional reductions to the
budget. She opined that taking money from the Permanent
Fund (PF) and the PFD's was a form of tyranny. She strongly
urged members to oppose CSSB 26 (FIN). She did not want a
sales tax, an income tax, or a cap on the PFD. Instead, she
wanted to see more cuts to the budget and other revenue
means. She noted tax revenues from marijuana sales. She
thought the percentage numbers would fill the need for a
final vote. She asked the legislature not to plunge the
state into a deeper recession. She mentioned a referendum
and the possibility of recalling legislators. She indicated
that the representatives would be removed from office
through a vote of the people. She urged members to vote
"no" on the legislation.
4:19:05 PM
MIKE COONS, SELF, PALMER (via teleconference), spoke in
opposition of CSSB 26 (FIN). He relayed that Senator Kelly
had stated that the PFD was Alaska's largest expense. He
believed that the reason for the PF was to keep the
government from spending all of the oil revenues. He
continued that 25 percent of the PF was meant for the
people of Alaska for their mineral rights. Over the years,
the legislature chose not to tap the PF earnings, which he
thought was good. Instead of getting into the PF earnings
in a responsible way the House of Representatives wanted to
spend a huge hunk of the earnings, add an income tax, and
maintain government spending. He did not believe the bill
was fixing the problem. He also felt the bill blatantly
discriminated against rural Alaska. He urged members to
vote down the bill.
4:21:11 PM
DAVID OTNESS, SELF, CORDOVA (via teleconference), spoke in
opposition of the bill. He was disappointed that the
legislature had allowed the state to reach its current
circumstances. He did not believe the legislation reflected
the vision of those people who created the PF. He felt the
actions of the legislature were cheapening the legacy of
the vision of Alaska's future. Other countries looked to
Alaska as an example. He spoke of the state's present oil
resources but did not think there was any hope of
expansion. He avowed that it was reprehensible that the
state was going to raid the PF.
4:23:49 PM
STEVE ST. CLAIR, SELF, MAT-SU (via teleconference), opposed
CSSB 26 (FIN). He thought the enactment of the bill should
not be contingent on any other bills. He continued that all
bills should stand on their own merit. He furthered that
CSSB 26 took money out of the hands of Alaskans and placed
it into the hands of government. He thought government
needed to encourage competition within the private sector
in order for Alaska to get out of a recession. He agreed
that the most regressive tax was reflected in the proposed
changes to the dividend. The Senate claimed to have reduced
the budget by $250 million. Alaskans will see their
dividends reduced by almost $750 million - 3 times the
amount government was reduced. He thought government needed
to be reduced to the point equal to the amount Alaskans
were being asked to give up in the form of their dividends.
He urged members to vote no on CSSB 26 (FIN).
4:26:04 PM
ABBY ST. CLAIR, SELF, MAT-SU (via teleconference), spoke in
opposition of CSSB HB 26. She believed the people of Alaska
had enough skin in the game. The legislature had introduced
budget cuts of less than $300 million but was demanding
that Alaskans give up approximately $700 million via their
PFDs. She referred to Page 6 lines 14-20 of the bill, which
stated that SB 26 would become law after the broad-based
income tax and HB 111 were passed. She thought each bill
should stand on their own. She mentioned having grown up in
the village of Shishmaref and spoke of the high cost of
living in rural Alaska. Many Alaskans relied on the PFD to
help pay for heating oil, clothing, and mechanical repairs.
She noted that the average household had a mere income of
$29 thousand per year according to citydata.com. She
thought that taking any portion of the PFD would make it
more difficult to survive in bush Alaska. She reemphasized
that Alaskans had already made enough sacrifices and urged
members not to consider any changes to the PFD. She was
holding legislators' feet to the fire to balance the
budget. She reminded members that they represented Alaskans
rather than the governor.
4:28:31 PM
STUART SCHMUTZLER, SELF, HOMER (via teleconference), spoke
in opposition of CSSB 26. He liked the idea of a personal
income tax. He thought there were several workers that did
not have to pay taxes, which he thought was wrong. He
thanked the committee.
4:30:18 PM
DAVID NEES, ALASKA POLICY FORUM, ANCHORAGE (via
teleconference), spoke in opposition to CSSB 26. He
reported that the forum had originally scored SB 26 with a
-4 rating in its freedom index. He reviewed the details of
the scoring. He noted that in all of the documents from the
House and the Senate there was no economic impact study of
the legislation. He thought it was curious that the fiscal
note was zero. He mentioned the contingency language in the
newest version of the bill. The forum's score card of -4
equaled D-. The Alaska Policy Forum opposed the bill.
Representative Wilson asked if there was a new fiscal note.
4:32:45 PM
AT EASE
4:33:45 PM
RECONVENED
Co-Chair Foster clarified that there was a new fiscal note
forthcoming. The new note would be available online on
BASIS.
4:34:21 PM
MICHAEL CHAMBERS, MISSION CRITICAL ALASKA, ANCHORAGE (via
teleconference), spoke in opposition to CSSB 26. He did not
think members listened to the testimony of the citizens of
Alaska and anticipated a referendum to reverse the
legislation, if passed. He also suggested that members that
voted in favor of SB 26 would also be on the referendum. He
mentioned that Commissioner Hoffbeck had recently stated
that the reason the governor went after the PFD was because
it was the largest amount of accessible money. He also
relayed that Senator Pete Kelly had referred to the PFD as
the government's largest spend. The senator's statement
assumed that the PFD belonged to government. He asserted
that it did not. He agreed with Clem Tillion that the acts
of the legislature equated to theft. Government was the
state's largest spend and Alaskans were not getting value
for their dollars. He encouraged citizens to attend a
Mission Critical Alaska event. He relayed a specific date
and time of an upcoming event in Palmer. He thanked the
committee.
4:36:08 PM
ORIN SEYBERT, SELF, ANCHORAGE (via teleconference), spoke
in favor of CSSB 26. . He thought there was confusion about
the PFD and the PF clarifying they were two separate items.
He asserted that only the earnings from the PF should be
used rather than the PFD. He would be the first person to
protest removing the PFD from the owners of the state. He
believed in a personal income tax and encouraged members to
move forward with the tax. He also supported additional oil
taxes. He noted that with a battery of attorneys, oil
companies would assert that they would leave Alaska, but he
did not believe it. However, the companies wanted certainty
about the tax rate. He encouraged the legislature to set a
high tax rate high for oil companies and maintain it. He
thanked the committee.
4:39:31 PM
LAURA BOMNER, SELF, ANCHORAGE (via teleconference), spoke
in support of the House version of the bill. She noted a
couple of specific sections that she liked. She had lived
in Anchorage since 1975. She appreciated the opportunity to
speak.
4:41:14 PM
PAMELA SAMASH, SELF, NENANA (via teleconference), spoke in
opposition to CSSB 26. She talked about having provided
positive ideas to the committee. She thought her
suggestions had been ignored. She mentioned that the state
should support marriage and provide counseling. She urged
members to vote against the legislation.
4:44:04 PM
AT EASE
4:44:12 PM
RECONVENED
PAUL D. KENDALL, SELF, ANCHORAGE (via teleconference),
opposed CSSB 26. He read a letter having to do with the
federal government. He spoke of the legislature convening
in Anchorage. He posed the question about who really owned
Alaska's resources. He mentioned Public Retirement issues.
He mentioned a federal plan. He noted there was a public
betrayal. He spoke to items outside of the legislation. He
urged members to come together in Anchorage.
4:48:20 PM
JENNIFER MCNICHOL, SELF, SITKA (via teleconference),
supported CSSB 26 because it called for a balanced
approach. She was concerned about public school funding and
any additional cuts. She agreed with a balanced approach
that included a Permanent Fund restructuring. She thanked
the committee for hearing her testimony.
4:50:24 PM
TODD SMOLDON, SELF, WILLOW (via teleconference), spoke in
opposition of CSSB 26. He thanked minority members for
their efforts in offering amendments. He noted the PF was
created for a rainy day. He spoke of the balance in several
savings accounts. He noted that it was sad that the
majority and minority could not come up with a compromise
plan. He very much opposed the legislation in its current
form. He stated that the state was spending $4 billion to
pay for government. He thanked the committee for hearing
his testimony.
4:53:30 PM
Co-Chair Foster noted the committee had been joined by
Representative Thompson.
4:53:45 PM
GARVAN BUCARIA, SELF, MAT-SU (via teleconference), spoke in
opposition of CSSB 26. He suggested cutting the governor's
gasline project. He also opposed a state income tax and the
use of the CBR. He did not want the existing PF system
changed.
4:55:09 PM
ALYSE GALVIN, SELF, JUNEAU, supported portions of CSSB 26.
She reminded members they were representing the entire
State of Alaska. She supported a reworking of the PF
earnings as contained in the bill and recognized that it
was one piece of a fiscal solution. She also favored the
tie-ins contained in the bill. She thought it was important
that if the legislature was going to change the PF, that an
equitable approach be taken, one that was fair to families.
She noted having spoken with the commissioner of the
Department of Revenue who shared with her that the state
was losing millions of dollars by not making decisions. The
commissioner spoke of resulting losses from the previous
year of about $66 million. She thought the amount would be
higher in the current year. She urged members to make
decisions immediately.
4:58:27 PM
BRENDA TAYLOR, SELF, JUNEAU, spoke in favor of CSSB 26. As
a parent and teacher, she appreciated the model the
legislature was exhibiting. She thanked the committee and
encouraged a comprehensive plan.
4:59:38 PM
JOAN JOHNSON, SELF, FAIRBANKS (via teleconference), spoke
in opposition to CSSB 26. She thought government spending
needed to continue. She urged members to encourage
investment in the state. She wished the legislature the
best.
5:00:42 PM
MICHAEL JESPERSON, SELF, ANCHORAGE (via teleconference),
opposed the legislation because of the conditional language
included. He did not like the power play of a threat in the
bill.
5:02:00 PM
KAREN PERRY, SELF, CHUGIAK (via teleconference), spoke in
opposition of CSSB 26. She indicated the PF belonged to the
people of Alaska. She disagreed with Senator Pete Kelly
that the PFD was the largest expense in the budget. She was
emphatic that legislators needed to be representatives of
the people. She thought that cutting the PFD decreased jobs
and threatened the economy. She noted some specific items
in the bill. She asked about ghost positions in the budget.
She urged members to vote "no" on CSSB 26.
5:05:06 PM
WILLIAM POPEL, SELF, ANCHORAGE (via teleconference), spoke
in opposition to CSSB 26. He arrived in Alaska in 1966. He
asserted that the allotted time of 2 minutes was not enough
time for citizens to provide their valuable input on a
complex bill with huge ramifications. He suggested a
minimum of 3 minutes. He questioned the legislature's
appropriation limit of $4.1 billion and thought the amount
should be lower. He added that a lower figure should also
include paying the state's debt obligations and money for
capital projects. He thought the legislature should get a
handle on state spending. He read a list generated by the
citizens group, Mission Critical, of several budget items
that were over and above constitutional expenditures. He
also pointed out that restructuring the PFD distribution of
25 percent of the amount calculated did not meet former
Governor Jay Hammond's 50/50 plan, which was the most
desirable split for essential government services and the
PFD distribution. He believed that the maximum amount of PF
earnings to be spent on essential government services by
his formula split would restrict government spending while
continuing a tremendous economic stimulus package by
private citizens for the overall Alaska economy. The split
of 75/25 limited the people instead of limiting government.
He also noted that the conditional language did not
guarantee a PFD distribution. Current law specified that
the PFD "shall" be distributed. He thought capping the PFD
was the worst thing to do to the economy. He also urged a
vote by the people to use the PF.
Co-Chair Seaton noted that the committee was hearing public
testimony for the House Committee Substitute for SB 26,
version U.
5:08:58 PM
ERIC MIDDLEBROOK, SELF, BETHEL (via teleconference), spoke
in favor of the bill and of tying the legislation to the
passage of the oil tax bill reducing oil tax credits. He
thought cutting too much from the budget would result in
hurting the economy. He alleged that a healthy state
government led to a healthy economy. He felt like he was
being asked to pay for someone else's dinner at a
restaurant when they should pay for their own. The oil
wealth in Alaska belonged to everyone in the state. He
thought cutting the PFD was a regressive course of action
but favored a personal income tax.
5:12:04 PM
ROSS MULLINS, SELF, CORDOVA (via teleconference), had been
a resident of Cordova since 1963 and was a commercial
fisherman for 37 years. He had been forced out of business
after the Exxon Valdez oil spill. He thought the House
Finance Committee was a very reasonable group. He also
supported HB 111 and HB 115. However, he opposed CSSB 26
because of its limited scope and conditional language. He
did not think the Senate would support HB 111. He hoped the
committee would continue. He thought any further cuts to
the bone of the budget would force seniors out of the
state. He thanked the committee for hearing his testimony.
5:16:08 PM
DEAN KASISCHKE, SELF, SEWARD (via teleconference), spoke in
opposition of CSSB 26. He opposed using the PF. He thanked
the committee.
Co-Chair Seaton indicated that there was no one else
online. The committee would be "at ease" until 6:00 pm.
5:17:38 PM
AT EASE
5:59:24 PM
RECONVENED
PAT HOLMES, SELF, KODIAK (via teleconference), believed in
an income tax. He was reluctant to see the Permanent Fund
tapped but thought it was probably necessary. He also
advocated for a head tax. He commended the legislature for
its work. He and his wife were retired and would find a way
to pay an income tax.
Co-Chair Seaton asked Mr. Holmes if he wanted to comment on
the oil tax component.
Mr. Holmes thought the richest industry in the state should
pay its fair share. He thought the cuts that had been
implemented were impacting the smaller communities
negatively. He advocated for less credits for oil
companies.
Co-Chair Foster relayed that the committee would be "at
ease" until 6:30 pm.
6:06:22 PM
AT EASE
6:30:01 PM
RECONVENED
Co-Chair Foster indicated there were a few more folks
wanting to testify.
6:30:20 PM
KURT SCHMIDT KASISCHKE, CITIZEN'S OF ALASKA, DELTA JUNCTION
(via teleconference), spoke in opposition of CSSB 26. He
thought additional cuts should be made. However, education
was being attacked which he thought was foolish. He
believed cutting spending as well as reducing tax credits
were in order. He did not believe cutting the PFD was the
right action to take. He mentioned a pending court case. He
thought the money that was taken last session should be
returned to the citizens of Alaska. The dividend was set
aside for the people of Alaska for its resources.
6:33:22 PM
PAM GOODE, SELF, RURAL DELTANA (via teleconference),
opposed CSSB 26. She thought the bill was much worse than
the previous version. She opposed changing the PFD
calculation, opposed HB 111, and opposed taking the
people's PFD. She also asserted that last year's dividend
should be restored to the people.
6:35:05 PM
STACY TURNER, SELF, ANCHORAGE (via teleconference), opposed
CSSB 26. She depended on the PFD for extracurricular
activities for her 5 children.
6:35:47 PM
JAMES SQUYRES, SELF, RURAL DELTANA (via teleconference),
spoke against CSSB 26. He thought it was acceptable to use
some of the earnings reserve without changing the PFD
calculation. However, he felt a POMV went too far. He
agreed with eliminating the refundable oil and gas credits,
but he believed HB 111 went too far. He also suggested that
any type of income tax went too far. He favored cutting
more expenses including the legislative lounge, the
Medicaid extras, and a portion of the base student
allocation. He agreed with Senator Dunleavy's plan and
advised members to talk to him.
6:36:59 PM
JESSIE CHANDLER, SELF, FAIRBANKS (via teleconference),
opposed CSSB 26. She thought the government continued to
take more out of the pockets of hard working Alaskans. She
offered to sit down with any of the committee members at
her kitchen table to show them how she balanced her
checkbook. She thought government needed to continue to
reduce its spending. She opined Alaskans had more skin in
the game than government. She noted that $750 million had
been taken from Alaskans. She asserted that until the
government reduced its budget by the same amount, no
changes should be made to the dividend or the calculation
formula. She was certain the Department of Revenue would be
happy to accept any dividends that Alaskans were willing to
give up. She emphasized that for many Alaskans they had to
choose between heating their homes and feeding their
children. She concluded that the bill was about government
rather than Alaskans.
6:38:48 PM
DEBRA KIM, SELF, ANCHORAGE (via teleconference), spoke in
opposition of CSSB 26. She relayed that as a senior citizen
cuts to the PFD hurt seniors substantially. She also
thought that people in rural Alaskan villages were also
inequitably affected. She suggested that the whole world
was watching to see what actions the legislature would
take. Other places that had oil pipelines were looking to
see how Alaska conducted its business. She reiterated her
opposition to the bill.
Co-Chair Foster reminded folks that they could submit their
testimony in writing to housefinance@akleg.gov.
Co-Chair Foster reviewed the agenda for the following day.
He reminded members that amendments for CSSB 26 were due by
Tuesday, April 11, 2017 at 11:00 a.m.
CSSB 26 (FIN) was HEARD and HELD in committee for further
consideration.
Co-Chair Foster recessed the meeting to a call of the chair
[Note: the meeting never reconvened].
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB26_Oppose_041017_1.pdf |
HFIN 4/10/2017 4:00:00 PM |
SB 26 |