04/24/2003 07:10 AM House W&M

HJR  9-CONST AM: APPROPRIATION/SPENDING LIMIT                                                                                 
                                                                                                                                
Number 1420                                                                                                                     
                                                                                                                                
CO-CHAIR  WHITAKER  announced that  the  next  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.                                                                                       
                                                                                                                                
CO-CHAIR WHITAKER determined  that no one in the  room or on-line                                                               
wanted to testify.                                                                                                              
                                                                                                                                
CO-CHAIR  WHITAKER  noted  for  the  record  that  Representative                                                               
Gruenberg had joined the meeting.                                                                                               
                                                                                                                                
Number 1444                                                                                                                     
                                                                                                                                
CO-CHAIR  HAWKER   commented  that   since  the   committee  last                                                               
discussed  HJR  9,  he  has  had  many  conversations  about  the                                                               
structure of  the resolution.   He said  that if  this resolution                                                               
results  in a  constitutional amendment,  it will  be one  of the                                                               
legislature's  most significant  accomplishments.   The  [Alaska]                                                               
Constitution  is  truly  the  backbone   of  the  way  the  state                                                               
operates.  The  budget is how the government  satisfies the needs                                                               
and priorities of the people of Alaska.                                                                                         
                                                                                                                                
CO-CHAIR HAWKER  pointed out that  the original version of  HJR 9                                                               
was particularly restrictive.   It provided a flat  basis for all                                                               
future appropriations  with no escalating provision.   Each year,                                                               
the legislature could  raise the amount spent over  the base year                                                               
by 2 percent with a three-quarters  vote of the legislature.  But                                                               
then, the next year the legislature  would have to go back to the                                                               
base  line and  perhaps could  increase it  2 percent  that year.                                                               
Under  the  [original] HJR  9  the  legislature  could have  a  2                                                               
percent increase  over a base year.   The base year  would be the                                                               
current budget, which  would be in effect for the  next 10 years.                                                               
Given  the inflationary  pressures  and the  desire for  economic                                                               
growth,  the original  resolution  might be  too constrictive  to                                                               
maintain a budget, even at the current level.                                                                                   
                                                                                                                                
Number 1710                                                                                                                     
                                                                                                                                
CO-CHAIR HAWKER  added that  he will  not offer  specific changes                                                               
today, but  that he and  others have considered various  means of                                                               
making  HJR  9  more  flexible  as  it  caps  expenditures.    He                                                               
suggested  the committee  consider some  increments such  as:   1                                                               
percent increase  with a  simple majority  vote, an  additional 2                                                               
percent with a two-thirds vote,  and perhaps an another 2 percent                                                               
increase  with  a  three-quarters  vote, for  a  potential  total                                                               
increase  of five  percent.    A three-quarters  vote  is a  huge                                                               
hurdle, he acknowledged.   The stair step concept  would retain a                                                               
very rigid commitment to the  people to control expenditures, but                                                               
it   would  allow   for  a   reasonable  growth   of  government,                                                               
particularly  in  response to  things  the  legislature does  not                                                               
always control.   For  example, the  education budget  is formula                                                               
driven, and the  legislature does not have the ability  to cut 15                                                               
percent across  the board.   That  would not  be good  policy, he                                                               
stated.   There  are other  formula programs,  such as  Medicaid,                                                               
that  the legislature  wants to  constrain, but  it is  a billion                                                               
dollars, and the state has no  control over it.  He concluded his                                                               
comments by encouraging  the committee to add  flexibility to HJR
 or whatever mechanism is used.                                                                                                
                                                                                                                                
Number 1910                                                                                                                     
                                                                                                                                
CO-CHAIR WHITAKER noted  there will be public testimony  on HJR 9                                                               
tomorrow and next week.  With  the support of the majority of the                                                               
members, he said  he intends to move HJR 9  out of committee next                                                               
week.  He  invited interested people to bring  their concerns and                                                               
comments forward.                                                                                                               
                                                                                                                                
Number 2006                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG stated that  for government to function,                                                               
there  must be  sufficient flexibility  in a  spending limit;  he                                                               
said legislators  cannot begin to  know what will happen  [in the                                                               
future].                                                                                                                        
                                                                                                                                
[HJR 9 was held in committee.]