Legislature(1995 - 1996)

02/09/1995 09:10 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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  HCR  1 -  LONG RANGE FINANCIAL PLANNING COMMISSION                           
                                                                               
            Discussion   was   had   with    Senator   Pearce,                 
            Representative  Phillips,  Pat  Pourchot, and  Pam                 
            Neal.       An   amendment   suggested    by   the                 
            administration  was  moved by  Senator  Donley but                 
            failed on a vote of 5 to 2.  SCS CSHCR 1 (STA) was                 
            REPORTED OUT of committee with a $51.3 fiscal note                 
            from the Legislative Affairs Agency.                               
                                                                               
                                                                               
  CS FOR HOUSE CONCURRENT RESOLUTION NO. 1(FIN)                                
                                                                               
       Creating the Long Range Financial Planning Commission.                  
                                                                               
  SENATE  PRESIDENT  DRUE  PEARCE  came before  committee  and                 
  directed attention to SCS  CSHCR 1 (STA).  She  referenced a                 
  recommendation  from  Commonwealth  North  for  a  statewide                 
  effort involving  Alaskan citizens  in long-range  financial                 
  planning.  She further stressed need for a "soft landing" as                 
  Prudhoe  Bay revenues fall and  the state faces "huge budget                 
  deficits over the next ten years."                                           
                                                                               
  The   resolution   would   create   a  balanced,   statewide                 
  commission.  Pages 2  (lines 25-29) and 3 (through  line 24)                 
  present specific  areas of  commission review.   The  Senate                 
  State Affairs' version calls for nine public members:                        
                                                                               
       1.   Three chosen by the Speaker of the House                           
       2.   Three chosen by the Senate President                               
       3.   Three chosen by the Governor                                       
                                                                               
  The House-passed  version required unanimous consent  by the                 
  Governor,  Speaker,  and  Senate  President  for  all   nine                 
  members.   Concern arose that  that type of  consensus would                 
  involve a difficult  and lengthy  selection process and  not                 
  provide the needed  wide range  of diversification.   Senate                 
  State Affairs added a  provision requiring that  legislative                 
  appointments by  both the  House and  Senate consist of  one                 
  member of the majority and one member of the minority.                       
                                                                               
  Senator Pearce acknowledged  that work  to be undertaken  by                 
  the commission should be done by  the legislature.  She then                 
  added that a long-range plan could probably not be developed                 
  without participation by  the public.  The  resolution would                 
  allow the legislature to work with the public on development                 
  of new ideas for future budgeting.   Senator Pearce spoke to                 
  constituent concern that the state does not presently have a                 
  budgetary plan.  She referenced the Cremo Plan and the "safe                 
  landing  plan"  proposed  by  ISER.    There   has  been  no                 
  opportunity for review and discussion of these plans by  the                 
  public.                                                                      
                                                                               
  The  resolution  passed the  House  on a  vote  of 37  to 1.                 
  Senator Pearce noted support by the Alaska Municipal League,                 
  Alaska State Chamber  of Commerce, Common Sense  for Alaska,                 
                                                                               
                                                                               
  the National Federation of  Independent Businesses, Resource                 
  Development Council, etc.                                                    
                                                                               
  Senator   Zharoff   referenced   fiscal   note   information                 
  indicating  that  public  members  would  be  selected  from                 
  Fairbanks,  Anchorage,   and  Southeast.     Senator  Pearce                 
  explained that since  there is  no way  to anticipate  where                 
  public members  might come  from, a  regional diversity  was                 
  simply set  forth  by Legislative  Affairs.   She  said  she                 
  expected rural  members would  participate and  advised that                 
  the fiscal note could be revised to show membership from the                 
  four judicial  districts, if  that would  provide a  greater                 
  level  of  comfort.    Senator  Zharoff  stressed  need  for                 
  participation by people from rural Alaska.                                   
                                                                               
  Discussion followed regarding identification  of anticipated                 
  fiscal gaps and recurring revenue and expenditures.  Senator                 
  Pearce   spoke  to   projections   by  the   administration,                 
  Legislative Finance Division, the Oil  and Gas Division with                 
  the Dept. of Revenue, etc.                                                   
                                                                               
  REPRESENTATIVE   GAIL   PHILLIPS,   sponsor,   came   before                 
  committee.   In response to a question from Senator Zharoff,                 
  she  spoke  to need  for  involvement  of more  public  than                 
  legislative members.  A total of  nine was selected to "keep                 
  the committee from getting too big."  Senator  Zharoff asked                 
  how the public  members would  be selected.   Representative                 
  Phillips referenced lists  of people who have  been involved                 
  in state financial planning for some time as well as experts                 
  and volunteers.                                                              
                                                                               
  Senator Halford expressed his hope that membership would not                 
  be   weighted   toward   direct  or   significant   indirect                 
  beneficiaries of state spending.  More general beneficiaries                 
  should be well represented.                                                  
                                                                               
  Senator Rieger  voiced  support for  the resolution,  saying                 
  that  it  would  create  a  mechanism for  protecting  state                 
  reserves such as the earnings  of the permanent fund,  AHFC,                 
  AIDEA, etc.                                                                  
                                                                               
  PAT POURCHOT, Legislative Director, Office  of the Governor,                 
  next came before committee.  He  voiced support for the idea                 
  of  a  long-range  fiscal  planning  commission,  but  noted                 
  disagreement  regarding composition  of  the  members.   All                 
  members must have equal involvement in the process to ensure                 
  both the  function and credibility  of the commission.   The                 
  Governor's position is  that commission members  should work                 
  toward  consensus  and  avoid vote  count  situations.   The                 
  proposed fifteen-member commission could lead to an eight to                 
  seven  configuration.    Mr.  Pourchot  proposed   that  the                 
  commission consist of a structure that  does not include the                 
  typical tie-breaking vote.   He noted that when the  vote is                 
  eight  to  seven,  the  credibility  of commission  work  is                 
                                                                               
                                                                               
  greatly weakened.  He  pointed to an even number  of members                 
  on the PERS and TRS investment board and even representation                 
  of management and  employee interests.   In that  situation,                 
  members are forced to work together to reach consensus.  Mr.                 
  Pourchot  suggested  addition  of  another  public   member,                 
  appointed  by the Governor, for a sixteen-member commission,                 
  including  ten  public  members:    four  appointed  by  the                 
  Governor, three  by the Senate, and three  by the House.  He                 
  cautioned that lessening the Governor's role in selection of                 
  commission members might  force him  into a "less  proactive                 
  role in the ultimate recommendations of the commission."                     
                                                                               
  PAM NEAL, Alaska State Chamber of Commerce, next came before                 
  committee.    She  told  the   committee  that  the  chamber                 
  represents  approximately  700 businesses,  employing 80,000                 
  people.  She voiced support for the resolution and said that                 
  reduction  in   state  spending  and   long-range  financial                 
  planning  are   the  first  priorities   on  the   chamber's                 
  legislative  agenda.    The  chamber  is less  concerned  by                 
  composition of the  commission than the requirement  that it                 
  include:                                                                     
                                                                               
       1.   Statewide representation.                                          
       2.   Representatives   of   beneficiaries    of   state                 
  spending.                                                                    
       3.   Representatives of providers of state revenue (the                 
            business community).                                               
                                                                               
  Speaking to questions regarding need for the commission, Ms.                 
  Neal stressed that it would "help get this process rolling .                 
  .  . get something on the table that everybody can look at."                 
                                                                               
                                                                               
  Referencing commission costs,  Ms. Neal noted  that planning                 
  is  a  necessary  and  beneficial  process in  the  business                 
  community.  It thus justifies the expense.  The $51.3 fiscal                 
  note  is a  small  price  to pay  for  a solution  to  state                 
  deficits.                                                                    
                                                                               
  Co-chairman Halford  called for additional testimony  on the                 
  resolution.  None was forthcoming.  Senator Donley MOVED for                 
  adoption of the amendment suggested by the administration:                   
                                                                               
       Page 2, Line 6:                                                         
                                                                               
            Change  "nine  members  of  the  public"  to  "ten                 
  members                                                                      
            of the public"                                                     
                                                                               
       Page 2, Line 8:                                                         
                                                                               
            Change  "three"   to  "four"   appointed  by   the                 
  Governor.                                                                    
                                                                               
                                                                               
       Page 2, Lines 7 and 8:                                                  
                                                                               
            Include language specifying appointment of three                   
            public  members,  each,  by  both  the  Senate and                 
            House.                                                             
                                                                               
  End:      SFC-95, #3, Side 1                                                 
  Begin:    SFC-95, #3, Side 2                                                 
                                                                               
  Senator Rieger voiced support for the resolution without the                 
  proposed amendment.  Senator Zharoff spoke in support of the                 
  change, stressing need for  the sixteen-member commission to                 
  reach consensus.   Co-chairman Halford called for  a show of                 
  hands on the motion.  The motion FAILED on a vote of 2 to 5.                 
                                                                               
                                                                               
  Senator Rieger  MOVED  that  SCS  CSHCR 1  (STA)  pass  from                 
  committee  with individual  recommendations.   No  objection                 
  having been raised,  SCS CSHCR 1  (STA) was REPORTED OUT  of                 
  committee  with  a $51.3  fiscal  note from  the Legislative                 
  Affairs Agency.   Co-chairman Frank and Senators  Rieger and                 
  Sharp  signed  the   committee  report  with  a   "do  pass"                 
  recommendation.  Co-chairman Halford and Senators Donley and                 
  Zharoff signed "no recommendation."  Senator Phillips signed                 
  "do not pass."                                                               
                                                                               

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