Legislature(2001 - 2002)
04/16/2002 08:03 AM House STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SJR 37 - CONST AM: HIRING FREEZE [Contains discussion of SCR 29] CHAIR COGHILL announced that the next order of business would be SENATE JOINT RESOLUTION NO. 37, Proposing an amendment to the Constitution of the State of Alaska relating to officers and employees of the executive branch. Number 2166 SENATOR PETE KELLY, Alaska State Legislature, sponsor, presented SJR 37. He explained that the Alaska constitution specifies duties of the executive branch and the legislature, but on some [duties] it is fairly vague. In the past there has always been a challenge between the two branches of government. He referred to the other resolution asking the governor to institute a hiring freeze [SCR 29]. He recognized that there are some fiscal problems with the state, and that there might be some disagreement in this building as to how serious or how eminent they are. This resolution is asking the governor to take some active management steps. Any governor can say no to just about anything the legislature asks when it comes to the day-to-day management of the executive branch. He indicated that that is why there needs to be a hiring-freeze resolution in the constitution to give the legislature the authority to say: Look, we've got some problems. If you won't do it [on] your own, we, the people's branch, want to enact this form of fairly simple management, which is if you've got hundreds of millions of dollars' deficit, one of the first things you probably ought to do is look at reducing or freezing hiring, which this governor has not done. SENATOR KELLY said that the authority to do that is in SJR 37. Number 2274 REPRESENTATIVE JAMES said she struggles on this issue and wondered why this resolution would be necessary, since the legislature already has the power of the purse. SENATOR KELLY replied that the hiring freeze is a more specific management tool than just adding or subtracting from the budget. The legislature could reduce the budget, but it wouldn't stop the governor from hiring more people and reducing services, which has happened. Number 2375 REPRESENTATIVE JAMES said this seems to be a management decision, and it seems to her that the constitution delineates the management to be the administration. She asked for the rationale for this. SENATOR KELLY answered that the constitution either allows for something or it doesn't, and that's why the constitution has to be changed to cross those separation-of-power lines. He said he doesn't believe in crossing the lines of separation of power unless it is allowed for in the constitution. SENATOR KELLY explained that if some executive goes on a hiring binge when budgets are cut or oil revenues drop, those people hired are susceptible to layoffs. He said he likes the idea of a hiring freeze because it protects people from layoffs. If, during a financial drought, things are managed through available options, the positions that currently exist can be protected. He said that one of the reasons he wants to do this is to protect the people who are employed already. Number 2594 REPRESENTATIVE HAYES asked who would be responsible for the hiring freeze during the interim when the legislators were working at their private-sector jobs. He is concerned that the staff, who are not elected officials, will ultimately have more power, without the technical expertise, to do the day-to-day functions of deciding when a hiring freeze should be done. SENATOR KELLY replied that that would be a future question should the legislature ever decide to enact a hiring freeze. There won't be specific answers to those questions in the constitutional authority to enact a hiring freeze. He explained that years from now, there would be a resolution that would itemize those concerns, saying this is how it will be done. REPRESENTATIVE HAYES asked if any other states or companies are set up in the country whereby the board of directors has the authority over the CEO [chief executive officer] to direct management decisions. SENATOR KELLY replied that any company can have that authority over the CEO. One difference between the private sector and the government is that the legislature can't fire the governor. REPRESENTATIVE HAYES asked Senator Kelly if he thought this resolution was the first step in the fiscal problems or if a long-range fiscal plan should be looked at first. He said he is not sure this tool addresses the fundamental problem. Number 2793 SENATOR KELLY agreed that this is not going to cure the budget problems, but it is a piece of the puzzle, just like a constitutional spending limit is a piece of the puzzle; it's not going to cure the problem. There are a lot of things that can address the long-term financial problems. Any one of them is not the answer. Number 2833 REPRESENTATIVE HAYES referred to a bill passed in the House whereby the governor's staff would prioritize the most important things in the budget and then the legislature would prioritize it. He commented that it seemed as though there are safeguards in statute that this constitutional amendment is trying to address. He wondered why there needs to be a constitutional amendment when some of these issues can be done with statutory authority. SENATOR KELLY said that the problem with the bill that the House passed is why this constitutional amendment needs to be passed. The legislature does not have the authority to require the executive branch to enact a hiring freeze without a constitutional amendment; it doesn't have the authority to ask the executive branch to prioritize the budget without constitutional authority. Prioritization of the budget is not a hiring freeze. That's why it's needed, he explained. Number 2918 REPRESENTATIVE WILSON asked what would happen during a hiring freeze if an upper management position was vacant and no one under that position was qualified to step into that position. SENATOR KELLY said that would be another thing that would be handled in the future, should the legislature decide to enact a hiring freeze; some of those considerations could be made in the resolution at the time. He noted that those are the kind of detailed decisions that the executive would be expected to make. TAPE 02-41, SIDE B Number 2968 REPRESENTATIVE STEVENS commented that SJR 37 seemed like a tool that may be needed at some point. He said that Alaska has an unusual constitution because its governor has more power compared with other states' governors. He wondered if there are other states where the legislature can initiate a hiring freeze. He said he doesn't think this really takes power away from the governor because he can still have a hiring freeze; it just gives more oversight to the legislature. Number 2888 SENATOR KELLY said he hadn't seen anything like this in other states. They haven't seen the need to do this yet. He applauded the people who have been trying to work on a long- range fiscal plan, but said he thinks that the rules were changed since the statehood compact was written. He explained that Alaska was an unusual circumstance. Alaska was a resource state; it had a higher level of revenue that was supposed to come to it because Alaska would never have a population base to tax itself for the services. He commented that then the environmentalists happened. Right now Alaska should have been receiving the revenues from ANWR [Arctic National Wildlife Refuge] from ten years ago. A fundamental piece of the economic puzzle did not get put in place ten years ago as it was supposed to; now Alaska is suffering the consequences. He said he thought that the revenue gap was made worse by the governor who, in the face of that revenue gap, continued to add hundreds of millions of dollars almost every year to almost every budget, increased employees, and acted as if the problem didn't exist at all. SENATOR KELLY reiterated that this resolution won't affect the current governor, but wondered what would happen if in the future the governor will not manage the problem. He said he believes that the legislature has to have the authority to take action if a governor won't. The constitution gave the governor a lot of power and a lot of protection. In the founding documents, the fear wasn't that the people would be the problem; they [the crafters of the documents] were more afraid of a very powerful executive, so they took action to building fences around the executive, not around the people's branch of government. It probably isn't bad to put a bit of a fence around the executive branch in Alaska, particularly given the uniqueness of its financial situation, he commented. Number 2697 REPRESENTATIVE FATE expressed concern about this resolution's being a problem with the federal constitution and asked Senator Kelly if "Legal" [Legal and Research Services Division] had examined that issue. SENATOR KELLY answered that he doesn't have it from Legal that it is unconstitutional. He agreed that it is possible, but it is healthy for states to be probing those areas of the federal constitution as they relate to the states to see what power states have. The federal constitution is one of the bedrocks of states rights. It is possible that this won't fit under the federal constitution, but it's worth trying, he commented. Number 2599 REPRESENTATIVE JAMES noted that she struggles with this issue. She said in her ten years in the legislature she has watched the legislature in action on management issues; she finds a true lack of understanding of the true management of issues. She said she would hate to put this in the constitution so that it would allow a future legislature to actually shut things down, and she said she thinks that could happen. She expressed concern about the economic activities over the last few years and said she sees a definite chilling of any opportunities for Alaska to do anything. She commented that she isn't sure that this is the methodology to get where she believes Alaska needs to go. It is a serious issue. She noted that she is not convinced that the total dollars being spent are needed, but she can't put her fingers on where the changes need to be made because she's not in that position. She fears some retribution on issues, she said. Number 2447 REPRESENTATIVE CRAWFORD said he wasn't convinced that this is the tool needed. It seems to him that the people in the constitutional convention had a good idea about the separation of powers. He said he believes that the state government has worked well so far. An across-the-board hiring freeze has a tendency to affect one department over another, he noted. The legislature has the power to not fund a department now, but when there is a hiring freeze, for example, the DFYS [Division of Family & Youth Services], which has a high rate of turnover, would lose all its employees over about three years. He said he thinks it is a "meat ax" approach. If departments aren't doing their jobs, then the legislature shouldn't fund them. REPRESENTATIVE HAYES agreed that the Republican majority in the legislature has done a good job of controlling costs in the state. It seems as if the legislative branch has done its job in conjunction with the governor. The increases in the budget come from federal dollars and the permanent fund. He said he's not sure what this tool accomplishes. REPRESENTATIVE STEVENS commented that this says the public will have a chance to decide. Number 1996 JACK KREINHEDER, Chief Analyst, Office of the Director, Office of Management & Budget, Office of the Governor, explained that the other resolution by Senator Kelly, SCR 29, is an appropriate vehicle for expressing the legislature's desires, and the administration doesn't have a problem with that type of resolution. He said the administration takes this resolution much more seriously because it is a change in the balance of power. He said he has a lot of respect for the drafters of the constitution. MR. KREINHEDER commented that the main issue here is the question, "Does this rise to a level of a constitutional amendment?" He encouraged the committee to imagine the constitutional drafters debating this issue: "Shall we give the legislature the authority to order the governor to do a hiring freeze?" He thinks if the members look at it that way, it is certainly not something they would have considered adding to the constitution back at that time, and in the administration's view, is not appropriate now. MR. KREINHEDER agreed that there is a potential legal issue. The Department of Law has said that there is national case law in other states that a significant change in the balance of power between the legislature and the executive branch or the court system cannot be done by a constitutional amendment. It has to be through a revision to the constitution, which would have to be done in a constitutional convention rather than through an amendment placed on the ballot. Whether this rises to that level of a "significant change" is an open debate. Number 1810 MR. KREINHEDER referred to a case in an Eastern state where a constitutional amendment was overturned because the court determined it had to be done through a revision and not a constitutional amendment. MR. KREINHEDER said even if this passed, he thinks it would be difficult to enforce. There would have to be some kind of review and exemption process. Number 1691 REPRESENTATIVE HAYES asked how much a lawsuit would cost if there were one on this issue. MR. KREINHEDER replied he was reluctant to hazard a guess but could look into that. Number 1621 REPRESENTATIVE JAMES indicated that she tended to agree with the unconstitutionality. Crossing the line and making a constitutional amendment between the legislature and executive branch certainly is the people's decision to make. For the legislature to let the people decide, it would only have the opportunity to put it on [the ballot] as a constitutional amendment. She said that somehow she feels going to court to get a decision is something that is done all the time. She said she would be more enthusiastic about this issue just to get the answer, whether or not it is the proper thing to do. MR. KREINHEDER said that the idea of passing a constitutional amendment to resolve a question in court doesn't resolve the issue of whether a hiring freeze rises to the level of a constitutional amendment. MR. KREINHEDER wondered, if there were a Republican governor in office, whether this amendment would even be looked at. The Alaska constitution is going to be in place for hundreds and hopefully thousands of years, and he said, people need to be careful about "cluttering up the constitution" with things that are based a fairly temporary circumstances of who is governor and who is in the legislature. The constitution should be something that guides the state for a long time. Number 1373 CHAIR COGHILL said he agreed that they want to be careful with the structure of government. But there have been many key decisions handed into the hands of several governors that have significantly changed the State of Alaska without any "purview." The balance of power is certainly going to be a continuing discussion, and has been from the statehood compact until now. He said he personally feels that this is a worthwhile discussion because even though there are management issues to be resolved, certainly they have to work hand in hand. Even the power of the purse is somewhat limited because of the size of the executive branch. Number 1238 REPRESENTATIVE JAMES agreed that this debate is always going to be there. If there's a problem in the executive branch, the general public thinks the legislature can fix it. And that's not always the case, and not always should be the case, because there is the separation of powers. This is going to take a lot of thought on the part of the legislature. Number 1140 REPRESENTATIVE WILSON expressed concerns about the overall ramifications but said she is willing to move the bill on to the House Judiciary Standing Committee. Number 0961 REPRESENTATIVE HAYES reiterated his earlier concerns. He said the real crux of the issue is how the state should produce new revenue. CHAIR COGHILL said that asking the people for a shift in authority is not inappropriate. He also agreed that SJR 37 is not a panacea; it is a tool. Number 0512 REPRESENTATIVE CRAWFORD said he believes that this hiring freeze is a "smoke screen sort of issue" that keeps the legislature from getting to the most pressing issue: "We don't pay for government; we've had a free ride for 20 years, and it's time that the people of this state step up to the plate and share responsibility for the state government." Number 0395 REPRESENTATIVE STEVENS moved to report SJR 37 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, SJR 37 was reported out of the House State Affairs Standing Committee.
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