Legislature(2001 - 2002)
04/09/2002 08:06 AM House STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SCR 29 - HIRING FREEZE Number 2020 CHAIR COGHILL announced that the next order of business would be SENATE CONCURRENT RESOLUTION NO. 29, Relating to urging the Governor to institute a hiring freeze on state government. Number 2032 WENDY HALL, Staff to Senator Pete Kelly, Alaska State Legislature, presented SCR 29 on behalf of Senator Pete Kelly, sponsor. She told the committee that Senator Kelly put forth this resolution urging the governor to institute a hiring freeze for all the positions funded by the general fund. She said that Senator Kelly and his office feel that this is the most logical first step when facing a fiscal crisis. Right now the deficit stands at 46 percent of the general funds. This isn't a solution to the problem, but it would help. Number 2080 REPRESENTATIVE HAYES asked if the 858 full-time positions with the price tag of $115 million are all general fund money. MS. HALL replied she wasn't sure. REPRESENTATIVE HAYES asked if SCR 29 addresses bills in this legislative session that have fiscal notes to implement new employees or addresses just the governor's budget. MS. HALL answered that it would be every position funded through general fund money, except for health and safety positions such as firefighters. REPRESENTATIVE HAYES said there are bills addressing economic development to address shortages in departments for permitting, so just involving health and safety doesn't necessarily help the economic development. In order to move the state forward, some people will have to be hired to help with the permitting and economic development. If those positions are included in the freeze, the state would move backward, he commented. He asked if the sponsor had looked at that. MS. HALL replied that this isn't a permanent hiring freeze. She said that she doesn't see the gas pipeline coming in the next year or so. Obviously, if people are needed to build the pipeline, that would be an exception, or hopefully the hiring freeze would be over by then. Number 2280 REPRESENTATIVE CRAWFORD pointed out that the Department of Labor & Workforce Development is shorthanded right now. There are not enough people in Wage & Hour in Anchorage to do the job now. A lot of enforcement isn't being done because they are shorthanded. If there is a hiring freeze, then the work will still not get done. He asked what efficacy would this have by not getting the work done. MS. HALL said she wasn't familiar with the problems in the Department of Labor & Workforce Development. She indicated that this bill was primarily aimed at those departments where positions haven't been filled for six months to a year, and suggested that those positions perhaps weren't necessary. Number 2353 REPRESENTATIVE JAMES said that this is certainly just a statement to the governor that the legislature wishes he would do this. She doesn't find it to be very effective, she commented, except for making a statement, but it is a statement that is okay to make. She said her biggest concern is there is no date by which this is requested and no timeline. It is open- ended. She agreed that economic development issues are being looked at, but she doesn't expect any in the next few months; however, within six months or more, there may be some opportunities. Certainly if that is the case, something will have to be done. This resolution doesn't say it can't; it is just urging the governor to stop hiring for now. Based on that fact, she indicated that she can support this. Number 2542 REPRESENTATIVE STEVENS commented that he hoped the state won't have to face this issue, and that the legislature will address the fiscal gap and deal with the current revenue shortfalls. This resolution is saying if that isn't done, the hemorrhaging has to stop; money can't be spent when it isn't coming in. He expressed support for the resolution. Number 2579 REPRESENTATIVE FATE agreed the resolution sends a message to make the government more effective and efficient. He commented that he does not believe that a freeze, not cuts, would hurt the state in going ahead in developing its economy. It might be just the converse. He said that he doesn't believe a freeze would have a sudden impact, because it's the attrition that would begin to reduce the size of government. He expressed support for this resolution. Number 2749 REPRESENTATIVE WILSON asked if there are vacancies that aren't filled in various departments, whether the money sit there waiting for that person to be hired, so there is excess money in that department. Number 2776 JACK KREINHEDER, Chief Analyst, Office of the Director, Office of Management & Budget, Office of the Governor, told Representative Wilson that it tends to be case-specific and time-specific. If a position were vacant a whole year and funded through the capital budget, the money would lapse at the end of the year, so it wouldn't sit there in the department forever. If a position were vacant for a few months, the money could be available if the department was short on money for another position. The excess money for the vacant position might be used if it were in the same component of the department; money can't be transferred across on appropriations. Number 2844 REPRESENTATIVE WILSON asked how much money is represented by the 858 positions in the resolution. MR. KREINHEDER replied that he cannot give an exact number on that but will get back to her with a more specific answer. REPRESENTATIVE WILSON agreed with Representative Fate that this is something to look at. This is a way to at least put a halt to growth now, while there is such a budget deficit with the least destruction to the state. She said she thinks this is an excellent resolution. CHAIR COGHILL asked Mr. Kreinheder to answer Representative Hayes's question about how many of these positions are funded out of the general fund. MR. KREINHEDER answered that not all of the positions are funded out of the general fund, but he doesn't have the specific breakdown. The 858 figure is from the Division of Legislative Finance. The administration strives to have its numbers match the division's numbers, but there is a different set of numbers in this case, so it is difficult to reconcile it. As an example, he shows that approximately one-third of the new positions added for FY 03 would be either federally funded or self-supporting. CHAIR COGHILL said he understands that many of the Department of Labor & Workforce Development's new positions would be federally funded. MR. KREINHEDER agreed. Number 2963 REPRESENTATIVE FATE asked how many employees in state government are funded from the general fund. MR. KREINHEDER said he didn't have that number off the top of his head but would get back to Representative Fate. TAPE 02-37, SIDE B Number 2968 MR. KREINHEDER said the administration shows 536 new positions. The main reason for the difference is that the administration numbers look what agencies have in place compared with the governor's proposed FY 03 budget. The 858 number from the Division of Legislative Finance is from the FY 02 authorized budget enacted by the legislature. He commented that it is comparing apples and oranges. CHAIR COGHILL reminded the committee that there are many positions that were authorized but not filled. Number 2897 REPRESENTATIVE JAMES expressed her concern about the increased use of and dependency on federal funds. Number 2798 MR. KREINHEDER asked Ms. Hall if the resolution had a timeframe or would it be just a one-year hiring freeze. MS. HALL answered that it would be up to the governor's discretion after the deficit decreased. Number 2760 MR. KREINHEDER said the administration had a hiring freeze in 1999 when the oil price fell below $10 per barrel. The exact dollar amount that hiring freeze saved was not calculated, but there were some modest savings. He stated that the administration's viewpoint is that a hiring freeze is a short- term solution. Alaska's fiscal gap is not a short-term problem; it's a long-term problem. He emphasized that the focus needs to be on fixing the long-term problem with a long-term solution. MR. KREINHEDER referred to the hiring freeze as management by chance. It depends who decides to move or take another job and whether that position is a vital one. He said that is not a good way to do business for the long term. Number 2635 MR. KREINHEDER commented that although SCR 29 does have an exemption for health and safety, there is concern about the economic development impact. For example, biologists are needed to open fisheries, but the Alaska Department of Fish and Game (ADFG) is losing biologists to the federal government because the wages are more competitive with the 25 percent COLA [cost of living adjustment]. There are already problems with recruitment and retention, and a hiring freeze will only aggravate that. MR. KREINHEDER also noted that some positions in the Department of Revenue are vital for collecting revenue. If those positions were vacant, that could actually worsen the fiscal gap rather than help it. He said he presumes that state troopers would not be part of the hiring freeze, but asked about all the administrative staff that support those troopers. The department can't be run effectively without the administrative staff to provide the support and help hire new troopers, he stated. CHAIR COGHILL announced that the hearing on SCR 29 would be continued after the testimony on the confirmation hearing. SCR 29 - HIRING FREEZE CHAIR COGHILL announced that the committee would resume the hearing on SENATE CONCURRENT RESOLUTION NO. 29, Relating to urging the Governor to institute a hiring freeze on state government. . Number 1860 MR. KREINHEDER reported that he'd had a chance to check on the total number of state employees. As of October 2001, there were 23,500 part-time and full-time state employees, which includes the University of Alaska. Number 1753 REPRESENTATIVE WILSON asked if contracted employees were counted in that number. MR. KREINHEDER answered that he didn't believe so, but he would have to confirm that. Number 1669 REPRESENTATIVE JAMES said she thinks there is some benefit to a hiring freeze where it works, but she is not convinced that it works across the board. Number 1540 REPRESENTATIVE CRAWFORD agreed with Representative James. He said he thinks a blanket hiring freeze is bad policy. "If there are some jobs we don't want done, we ought to make that decision," he said. Number 1372 REPRESENTATIVE HAYES made a motion to adopt Amendment l, which read: Page 2, line 3, change "healthy" to "health" Page 2, line 3: Following "health" Delete "and" and insert "," Following "safety" Insert "and economic development" CHAIR COGHILL objected and said economic development could be anything. REPRESENTATIVE HAYES explained that there are some economic development bills in the legislative process and that the hiring freeze would not take those positions into consideration, which could cause a problem. Number 1219 REPRESENTATIVE JAMES agreed that economic development is broad, but it certainly has a purpose: it makes money. She suggested new wording. The resolution is only sending a message, she said. REPRESENTATIVE FATE suggested that what constitutes an emergency might be a part of the amendment. Number 1043 REPRESENTATIVE HAYES said he wasn't sure if economic development would fall into an emergency. Permitting for new oil leases is not such an emergency, but it would enhance economic growth. REPRESENTATIVE FATE asked what is going to be the least painful way to deal with the deficit. The situation in Alaska demands some sort of stricture on government spending, he stated. REPRESENTATIVE HAYES said he wants the message to be that Alaska is open for business. CHAIR COGHILL said he is inclined to leave the resolution as it is. Number 0606 REPRESENTATIVE JAMES made a motion to adopt an amendment to Amendment 1 and strike "and economic development" but maintain the technical change of "healthy" to "health." REPRESENTATIVE HAYES objected. Number 0380 A roll call vote was taken. Representatives Fate, James, Stevens, and Coghill voted for the amendment to Amendment 1. Representatives Crawford, Hayes, and Wilson voted against it. Therefore, the amendment to Amendment 1 was adopted by a vote of 4-3. CHAIR COGHILL asked if there was objection to Amendment 1. There being no further objection, Amendment 1 was adopted. Number 0305 REPRESENTATIVE HAYES explained that he doesn't necessarily have a problem with SCR 29. The five-year plan was introduced to reduce government, but it did not address the revenue side of things. The main issue he has with the resolution is that it is a simple solution to a complex problem, he commented. Last week some bill was passed out of committee to encourage folks to work for the state, but now the message is that no one is going to be hired anyway. REPRESENTATIVE FATE noted that the five-year plan reduced spending by cutting the budget. TAPE 02-38, SIDE A Number 0233 REPRESENTATIVE STEVENS asked Ms. Hall for clarification on the temporary positions referred to on page 2, line 2, of SCR 29. Number 0280 MS. HALL answered that those temporary positions would be paramedics and/or firefighters needed during the fire season in the summer and those needed for health and safety reasons. It doesn't necessarily mean the positions would be temporary; they would be full-time. Number 0326 REPRESENTATIVE CRAWFORD said he is opposed to any statement that says, "We're afraid to grow our state's economy." He added, "I believe ... this doesn't set our priorities, and it says we're closed for business." Number 0365 REPRESENTATIVE FATE moved to report SCR 29, as amended, out of committee with individual recommendations. REPRESENTATIVE CRAWFORD objected. A roll call vote was taken. Representatives Fate, James, Stevens, Wilson, and Coghill voted in favor of moving the resolution. Representatives Crawford and Hayes voted against it. Therefore, HCS SCR 29(STA) was reported out of the House State Affairs Standing Committee by a vote of 5-2.
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