Legislature(2005 - 2006)BUTROVICH 205
02/10/2005 08:30 AM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SJR1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | SJR 1 | ||
SJR 1-CONST. AM: APPROPRIATION LIMIT
9:09:14 AM
CHAIR RALPH SEEKINS announced SJR 1 to be up for consideration.
SENATOR FRED DYSON, sponsor of SJR 1, said he prepared
amendments for SJR 1 and they are incorporated in a CS, version
F. One amendment on page 1, lines 8-9, says:
except as provided in this section, appropriations
made for a current fiscal year shall not exceed the
amount appropriated for the fiscal year two years
preceding the current fiscal year by more than the
product of that prior year's ...
The second change adds a new section on page 5, lines 7-10, as
follows:
(m) If the legislature, by law, declares that an
extraordinary circumstance exists, upon the
affirmative vote of at least two-thirds of the members
of each house, the legislature may pass an
appropriation that exceeds the appropriation limit
under this section to address the extraordinary
circumstance.
CHAIR SEEKINS asked if the standard procedure applies by leaving
language regarding vetoes and overrides out.
9:11:21 AM
SENATOR DYSON replied yes.
SENATOR HUGGINS moved to adopt CSSJR 1(JUD), version F.
CHAIR SEEKINS objected for purposes of discussion.
MR. LUCKY SCHULZ, staff to Senator Dyson, explained that
language saying "for the current fiscal year" is used
consistently throughout the rest of the document.
9:12:17 AM
CHAIR SEEKINS directed attention to page 4, line 27, and asked
if there were questions.
MR. SCHULZ explained that subsection (m) was added to give the
Legislature the ability to declare extraordinary circumstances.
9:14:48 AM
SENATOR FRENCH asked what is required to declare extraordinary
circumstances. Does he envision one bill passing through both
houses by a two-thirds majority and that bill would contain a
declaration that there's an extraordinary circumstance?
SENATOR DYSON indicated yes, that he anticipates that the
Legislature calls itself into session or, if it is in session,
the bill is introduced. If the bill passes, then there is a
declaration of extraordinary circumstances.
9:15:44 AM
SENATOR FRENCH clarified that it's one legislative vehicle that
requires the appropriation.
SENATOR DYSON agreed and said, therefore, it is exempt from the
constitutional limit on spending.
9:16:08 AM
SENATOR HUGGINS asked what, "(4) a plan for recovering the
amount of money appropriated under this subsection." on page 5,
lines 2-3, means.
MR. SCHULZ answered that the intent to provide for a plan to get
back to a normal level of appropriations and expenditures when
an extraordinary circumstance exceeds the limit.
For instance, if we're going to build a natural gas
line, there's rationale for spending the money if in
the future you see a return on the investment to get
us back to a better situation. It is essentially
saying you're going to have to demonstrate favorable
return on the investment for that short-range
circumstance.
9:17:43 AM
SENATOR HUGGINS asked if money was left over after going through
the process, was there a process to deal with it.
MR. SCHULZ didn't believe so.
SENATOR THERRIAULT pointed out that operating appropriations
couldn't live beyond the fiscal year; a capital appropriation
generally has five years and then lapses to the general fund.
9:19:47 AM
SENATOR HUGGINS asked if this is not applicable to an emergency.
SENATOR DYSON replied that is right.
CHAIR SEEKINS said the plan may be to increase taxes or use
funds from the earnings reserve. It doesn't mean that the plan
has to be executed at that time.
MR. SCHULZ explained the plan is requirement so that the
Legislature has a certain amount of information when it's
declared.
9:20:54 AM
SENATOR HUGGINS said the computation language on page 2, lines
4-10 is simple, but he is concerned that it is a mushy process
that would allow two different people to come up with two
different solutions.
MR. SCHULZ replied that the data used is procured from various
entities on a timely basis. It comes in at the same time as
population and inflation data. Some of it comes from a federal
agency and some from a state agency.
CHAIR SEEKINS said he thought it came from the Department of
Labor and Workforce Development. He explained that the CPI may
be a little more inflated because it is based on new
construction rather than on the selling price of homes in the
marketplace. Relating it to personal income is pegging it to the
overall financial experience of the people in the State of
Alaska.
SENATOR HUGGINS said his concern is that two different
mathematicians could substitute language in their equation and
come up with different answers when they should be the same.
CHAIR SEEKINS quipped, "I'm not sure we could ever do that."
9:24:00 AM
SENATOR DYSON explained that experts would provide that
information to the Legislature; it would deliberate and have to
agree on what the numbers are.
9:25:01 AM
SENATOR FRENCH asked for more information on the base number
that will be used.
SENATOR DYSON said spirited discussions had taken place on what
base number to use. They are moving away from using the rolling
five-year average and started this year with the February 10
budget estimate and the PERS/TRS issue.
9:26:52 AM
SENATOR FRENCH said if this measure passes, it would be on the
ballot in 2006. The Legislature would be working on the 2008
budget in the session of 2007 and it would then be using the
spending cap. He asked if the theory would be to look back to
2006 as the base number.
MR. SCHULZ answered that an established number would be used for
transitional purposes that give them the ability to look at the
expected PERS/TRS needs and others like it.
SENATOR FRENCH asked what the number is for a frame of
reference.
MR. SCHULZ replied that his crystal ball isn't very effective
right now, but he is currently using the governor's number of
$3.282 billion from 2006, because that is the best guess he has.
SENATOR FRENCH referred to the chart indicating a 6.35% annual
change and he asked if that is the difference between last year
and this year.
MR. SCHULZ replied that that is the difference between FY 05 and
FY 06.
SENATOR FRENCH asked if the spending cap had been in place,
would that great an increase have been allowed.
MR. SCHULZ replied that he thought so, but the House and Senate
argued over that number last year.
9:30:31 AM
SENATOR FRENCH restated his question.
If you took FY 04 actuals and used the formula that
this spending cap envisions...would you have been able
to get to a 6.35% increase in government spending this
year?
MR. SCHULZ replied, "I don't know, because we used a
transitional number and I have not applied it to what the
actuals were in FY 04."
9:31:03 AM
SENATOR DYSON said data indicates that the population is going
up 1.5% to 2.0% and inflation has increased 2% or 3%; adding
those for two years would be very close. The Governor did
something interesting with the budget by spreading spending
backwards and forwards, but this proposal would not allow as
much of an expansion as the governor is requesting.
SENATOR FRENCH said he saw $196 of growth in the FY 06 column,
which is far greater than any other number he sees in the
future. He sensed that his formula wouldn't allow such a big
expansion.
SENATOR DYSON explained that the formula is trying to anticipate
capital infusion.
9:33:03 AM
CHAIR SEEKINS said he thought it would lag behind a bump or a
decrease in population. He asked if there were further
questions. He removed his objection to adopting version F and
asked if there were any further objections.
SENATOR HUGGINS moved to pass CSSJR 1(JUD), version F, from
committee with attached fiscal note.
SENATOR THERRIAULT said he always reserves the right to look at
the financial implications and this may come back to the
committee.
CHAIR SEEKINS responded that he told the Senate President that
the sponsor and committee would like to reserve the opportunity
to request it back to look at the constitutional issues after
the Finance Committee was done. He saw no problem with that,
whatsoever. There were no further objections and CSSJR 1(JUD)
moved from committee. There being no further business to come
before the committee, he adjourned the meeting at 9:35:42 AM.
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