Legislature(2003 - 2004)
10/29/2003 05:10 PM House JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HJR 9-CONST AM: APPROPRIATION/SPENDING LIMIT [Contains discussion pertaining to HJR 4] CHAIR McGUIRE announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 9, Proposing amendments to the Constitution of the State of Alaska relating to an appropriation limit and a spending limit. Number 019 REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, speaking as the sponsor of HJR 9, noted that there have been several meetings already held. This bill is a tool to address the fiscal issues facing the state, and today is the time to hear from the public. Number 039 CHAIR McGUIRE opened up public testimony. Number 045 RONALD JORDAN, representing himself, noted that he has lived here 40 years. He said, "If a 90-day session can accomplish the same thing in 120 days without being called back into special session like previous governors have done, I'm all for it. I am all for [the constitutional spending limit]. Let's put a cap on it." CHAIR McGUIRE temporarily set aside HJR 9. HJR 9-CONST AM: APPROPRIATION/SPENDING LIMIT Number 093 CHAIR McGUIRE returned attention to HOUSE JOINT RESOLUTION NO. 9, Proposing amendments to the Constitution of the State of Alaska relating to an appropriation limit and a spending limit. CHAIR McGUIRE explained that HJR 9 is a potential component in a fiscal policy. Saying there would be no further public testimony on it, she asked for any further thoughts, noting that this resolution would be brought back up in January. She advised that there are many people who are skeptical about accepting use of the permanent fund without some guarantee of fiscal discipline on the part of the legislature. Can the legislature be self-disciplined, or do they need a law to provide discipline? "It's similar to the 90-day session bill in that should we want to end in 90 days we can at any point in time," she said. "There is certainly no constitutional requirement that we go 120 days, and yet we seem to." REPRESENTATIVE STOLTZ mentioned that the bill must be practical and work. There's a constitutional spending limit right now. He said he sees it as flawed, but the spending is well within this limit. Saying he anticipates the need for technical answers, he told members that constitutional amendments are serious business and that the process is fluid. CHAIR McGUIRE proposed using a case scenario to clarify the process. Number 150 REPRESENTATIVE HAWKER commended Representative Stoltz for his efforts at "crafting a truly extraordinarily difficult bill to put to language." He said he believes in some form of a constitutional spending limit as the cornerstone of a long-term fiscal policy for the state. He remarked: We've been through periods here of just having unbridled income, and we've obviously seen our ability to spend it as equally unbridled and, frankly, as a result of that, my experience around the state, particularly this summer doing the [House Special Committee on Ways and Means] community meetings, that we as a legislature lack credibility with the public in their belief that we actually have any inclination towards fiscal discipline and spending restraint. REPRESENTATIVE HAWKER said he feels that the crafting and language difficulties can be overcome. He told members: Care must be taken not to create a monster that either, frankly, serves no functional purpose, as our current spending limit, or threatens our ability to grow and expand the economy in this state - very, very difficult, but this bill is a political necessity if we are to look at creating a larger fiscal plan. Many of us might like to believe that the community would trust those of us who are elected officials to make the right decisions as we encounter specific circumstances unique to each legislative session. The practical necessity is, we do not enjoy that credibility with the public. And this bill is vital to beginning to establish that credibility as we go forward with some larger fiscal planning. Number 182 REPRESENTATIVE GARA recalled having debate about this bill in April or May and that he'd expressed concerns then. He said his present major concern is the failure of the state's recent federal review of [Alaska's] child protective system. He continued: The administration has said that of the ones that cost money, we're not going to adopt any changes because we haven't any money. And then I wonder, if we lock in next year's spending at this year's spending level - and the way that this actually works is that spending has to fall behind inflation, probably, - I wonder if that will always be the answer, that we just don't have the money to address the problems in our child protection system, the real problems that send more foster children to jail than we send to college. Certainly, I think that everyone at this table would agree to a spending cap where if you move forward to a point where you've solved your problems and you feel like you have a fair budget, I think people would agree to a spending cap from there. The question is, do we institutionalize the poverty and failure that we have in sections of our community like the children who are so much in need, the foster children, the abused children, the children in institutions who right now we are saying we are not going to help to the extent that it costs extra money over last year. Do we lock in that problem? Number 210 REPRESENTATIVE GARA asked Representative Stoltz, "Can you explain for us the mechanics of the existing spending cap that we have on the books right now and what it is and why it doesn't work?" REPRESENTATIVE STOLTZ responded that the bill started at the time the state was spending $15,000 per capita, a high percentage of spending due to the high quantity of oil. This was a faulty premise as to what a sustainable amount should be. A convoluted political situation created it during a special session, and then-Governor Hammond vetoed the capital project. Representative Stoltz said, "It was an imperfect process that yielded an imperfect type of constitutional amendment. When you index things, there's always a danger of what the escalation is going to be. In short, it has never been taken seriously as a spending limit because we were always underneath it." REPRESENTATIVE GARA commented that the budget right now is about $6 billion, but only $2 billion of that is general fund money, with the rest spent on the dividend and coming from federal money and other fund money. The old cap was $2.5 billion of general fund money, with adjustment for population growth and inflation. He asked Representative Stoltz what the state is allowed to spend today under the spending cap. Number 253 REPRESENTATIVE STOLTZ replied that the number is $6.4 billion and that "we are now meeting our constitutional mandate." REPRESENTATIVE GRUENBERG stated that with passage of the capital budget, HB 100, several provisions were designed to eliminate the need for the minority's votes, and this was accomplished by changing effective dates. These dates when certain appropriations were made triggered the mechanism for the three- quarters vote (indisc.) allegedly was avoided. He said he thinks that was unconstitutional and that the present resolution may contain the same defect. He then referred to [subsection (b), page 2] and said: It says that an appropriation that exceeds the limit under (a) of this section may be made for any public purpose upon affirmative vote of at least three- quarters of the members of each house of the legislature. I'm sort of talking myself out of my own argument here. It's exactly the opposite of the other thing, so I'm going to withdraw my comment. CHAIR McGUIRE asked Representative Stoltz what the definition of "public purpose" is, after referring to section (b). REPRESENTATIVE STOLTZ noted, "It would have to fall within the constitutional boundaries of what an appropriation be allowed to be made for." Number 295 REPRESENTATIVE GRUENBERG wondered: If there could be no circumstance under which this could be eliminated with less than a three-quarter vote of the legislature, in other words, only certain types of expenditures can be made with a three-quarter vote in violation of subsection (a). But under no circumstance could you get around the limit in subsection (a) with less than a three-quarter vote. Am I correct in that interpretation? CHAIR McGUIRE referred to page 1, Section 1, of the bill, which would amend Section 16 [of Article IX] of the state constitution. She pointed out that it outlines a series of nine exemptions, including an appropriation to meet a state of disaster as declared by the governor and an appropriation to the Alaska permanent fund. This subsection does not apply to these exemptions, she said. REPRESENTATIVE GRUENBERG stated: This is something that creative legislators and people who want to bust the cap will study for years, decades, maybe longer, so that what we have to do, if we are going to pass this thing in its present form, is see how a tricky, clever, conniving budget analyst could come up with a way, with or without a friendly lawyer, of getting around this. That's where the game's going to be played, I'm afraid. CHAIR McGUIRE said she wanted to clarify that Representative Hawker echoed her prior comment. She said: There's a certain amount of pressure that's being put on this committee from other members of the legislature. We all have a responsibility in our different committees, and we all serve at the will of our various caucuses. I'd like us to be prepared over the interim to focus on this particular resolution in some detail when we get back, and I'd like to do it early on so that we can be efficient and end in 90 days, but really so that we can get going on it before the budget and some of those other things come down. Number 352 REPRESENTATIVE GARA stated for the record that he urges a deliberative process because this is a constitutional amendment and he is not applying any pressure. REPRESENTATIVE GARA posed a question to Representative Stoltz: The way this spending cap is written - and the devil is always in the details - the amount of spending can only go up, on average, 1 percent a year, even if inflation is 3 percent, 4 percent, 5 percent. Or, back in the eighties when it was 10 percent, the amount can only go up 1 percent a year unless you've got three-fourths of both houses to agree, which would very rarely ever happen. So the way this one is designed, the amount of spending for our schools, for child protection services, will go down every year. And I look at schools, for example, and the school funding has gone down, in comparison with inflation, by about 5 percent over the last six years, and it went down another $10 million last year. And I'm wondering if this just requires that we keep spending less in real dollars on our schools if we adopt this. The amount of spending has to essentially to go up at a lower rate than the rate of inflation provision, and you can't even take into account new population increases. I'm wondering, do you believe that this will have a detrimental effect on our schools, or is there a way around that that is fair? REPRESENTATIVE STOLTZ responded that he's not against schools; this legislation forces prioritization. He noted that during the economic downturn of the 1980s, education was not cut because the legislature prioritized a definition of full funding of education. They cut employees, but education was not reduced and, in fact, in his recollection, there was an increase. CHAIR McGUIRE promoted using scenarios for clarification. She closed public testimony on HJR 9 and set it aside until January. [HJR 9 was held over.]
| Document Name | Date/Time | Subjects |
|---|