03/02/2017 03:30 PM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB26 | |
| SJR2 | |
| SB48 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 2 | TELECONFERENCED | |
| += | SB 48 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 26 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
March 2, 2017
3:32 p.m.
MEMBERS PRESENT
Senator Mike Dunleavy, Chair
Senator David Wilson
Senator Cathy Giessel
Senator John Coghill
Senator Dennis Egan
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 26
"An Act relating to the Alaska Permanent Fund Corporation, the
earnings of the Alaska permanent fund, and the earnings reserve
account; relating to the mental health trust fund; relating to
deposits into the dividend fund; relating to the calculation of
permanent fund dividends; relating to unrestricted state revenue
available for appropriation; and providing for an effective
date."
- MOVED SB 26 OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 2
Proposing an amendment to the Constitution of the State of
Alaska relating to an appropriation limit.
- HEARD & HELD
SENATE BILL NO. 48
"An Act creating a fund in the Department of Public Safety;
providing for payment of certain medical insurance premiums for
surviving dependents of certain police officers or firefighters
who die in the line of duty; and providing for an effective
date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 26
SHORT TITLE: PERM. FUND: DEPOSITS; DIVIDEND; EARNINGS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/18/17 (S) READ THE FIRST TIME - REFERRALS
01/18/17 (S) STA, FIN
02/07/17 (S) STA AT 3:30 PM BUTROVICH 205
02/07/17 (S) Heard & Held
02/07/17 (S) MINUTE(STA)
02/16/17 (S) STA AT 3:30 PM BUTROVICH 205
02/16/17 (S) Heard & Held
02/16/17 (S) MINUTE(STA)
02/21/17 (S) STA AT 4:30 PM BUTROVICH 205
02/21/17 (S) Heard & Held
02/21/17 (S) MINUTE(STA)
02/22/17 (S) FIN AT 1:30 PM SENATE FINANCE 532
02/22/17 (S) -- MEETING CANCELED --
02/28/17 (S) STA AT 3:30 PM BUTROVICH 205
02/28/17 (S) Scheduled but Not Heard
03/02/17 (S) STA AT 3:30 PM BUTROVICH 205
BILL: SJR 2
SHORT TITLE: CONST AM: APPROPRIATION LIMIT
SPONSOR(s): STATE AFFAIRS
01/27/17 (S) READ THE FIRST TIME - REFERRALS
01/27/17 (S) STA, JUD, FIN
02/14/17 (S) STA AT 3:30 PM BUTROVICH 205
02/14/17 (S) Heard & Held
02/14/17 (S) MINUTE(STA)
03/02/17 (S) STA AT 3:30 PM BUTROVICH 205
BILL: SB 48
SHORT TITLE: INS. FOR DEPENDS. OF DECEASED FIRE/POLICE
SPONSOR(s): COGHILL
02/03/17 (S) READ THE FIRST TIME - REFERRALS
02/03/17 (S) STA, FIN
02/14/17 (S) STA AT 3:30 PM BUTROVICH 205
02/14/17 (S) Heard & Held
02/14/17 (S) MINUTE(STA)
03/02/17 (S) STA AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
PENN R. PFIFFNER, Chairman
Taxpayer's Bill of Rights (TABOR) Committee
Lakewood, Colorado
POSITION STATEMENT: Testified in support of SJR 2.
BARRY POULSON, Emeritus Professor of Economics
University of Colorado
Boulder, Colorado
POSITION STATEMENT: Testified in support of SJR 2 with added
provisions.
MATTHEW MITCHELL, Senior Research Fellow
Mercatus Center at George Mason University
Arlington, Virginia
POSITION STATEMENT: Testified in support of SJR 2 and provided
suggestions on fiscal policies.
CHRISTA MCDONALD, Staff
Senator Mike Dunleavy
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reviewed the CS for SB 48.
PAT HOLMES, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in support of SB 48.
BRANDY JOHNSON, representing self and family
Fairbanks, Alaska
POSITION STATEMENT: Testified in support SB 48.
DAVID PRUHS, City Council Member
City of Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 48.
PAULA JOHNSON, representing self and family
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 48.
KATHIE WASSERMAN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 48.
SUSAN HECKS, Executive Director
Southern Region Emergency Medical Services Unit (EMS) Council,
Inc.
Division of Public Health
Alaska Department of Health and Social Services
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 48.
ACTION NARRATIVE
3:32:47 PM
CHAIR MIKE DUNLEAVY called the Senate State Affairs Standing
Committee meeting to order at 3:32 p.m. Present at the call to
order were Senators Giessel, Wilson, Egan, Coghill, and Chair
Dunleavy.
SB 26-PERM. FUND: DEPOSITS; DIVIDEND; EARNINGS
3:33:26 PM
CHAIR DUNLEAVY announced the consideration of SB 26.
3:33:37 PM
CHAIR DUNLEAVY closed public testimony for SB 26.
3:33:41 PM
SENATOR GIESSEL moved to report SB 26, version 30-GS1690\A, from
committee with individual recommendations and attached fiscal
note(s).
CHAIR DUNLEAVY asked if there were objections.
3:33:55 PM
SENATOR WILSON announced that he objected.
CHAIR DUNLEAVY asked if he wished to speak to his objection.
SENATOR WILSON answered yes. He noted that "not wanting to do
harm to the local economy" was addressed by economists in other
presentations. He asserted that he could not in good conscience
pass SB 26 due to the devastating effect a reduced permanent
fund dividend has on the local economy.
CHAIR DUNLEAVY asked Senator Wilson if he maintained his
objection.
SENATOR WILSON answered yes.
SENATOR GIESSEL asked Chair Dunleavy to clearly articulate what
the committee was voting on.
SENATOR EGAN concurred with Senator Giessel.
CHAIR DUNLEAVY clarified that the committee was voting on
whether to move SB 26 out of committee. He noted that Senator
Wilson had objected and maintained his objection.
SENATOR GIESSEL asked if a "yes" vote meant to move the bill and
a "no" vote meant not to move the bill.
CHAIR DUNLEAVY answered correct.
SENATOR EGAN asked if he could still sign the bill "no
recommendation."
CHAIR DUNLEAVY answered yes.
He asked for a roll call vote.
A roll call vote was taken. Senators Giessel, Egan, and Coghill
voted in favor of moving SB 26 and Senator Wilson and Chair
Dunleavy voted against it. Therefore, the motion to move SB 26
from committee passed by a 3:2 vote.
CHAIR DUNLEAVY announced that SB 26 moved from the Senate State
Affairs Standing Committee.
3:35:53 PM
At ease.
SJR 2-CONST AM: APPROPRIATION LIMIT
3:37:42 PM
CHAIR DUNLEAVY called the committee back to order. He announced
the consideration of SJR 2.
He welcomed invited testimony and announced that Mr. Penn
Pfiffner from the TABOR Foundation will be the first to address
the committee. He detailed that Mr. Pfiffner is a state
representative from Colorado's legislature and has served for
eight years. He detailed that Mr. Piffner's major bills included
the enhanced sentences for dangerous pedophiles, the state's
full restitution policy, repealed the capital gains tax
revision, created performance-based pay for state employees, and
wrote major deregulation bills. He added that Mr. Pfiffner has
taught college economics part-time for 13 years, earned a
master's degree in finance from the University of Colorado, and
currently serves as the chairman of the TABOR Committee and its
sister organization the TABOR Foundation.
3:38:49 PM
PENN R. PFIFFNER, Chairman, Taxpayer's Bill of Rights (TABOR)
Committee, Lakewood, Colorado, testified in support of SJR 2. He
opined that SJR 2 will receive pushback from people who want to
see bigger and bigger government without restriction. He
suggested that SJR 2 be recognized as a spending limitation
rather than a repeat of Colorado's TABOR. He pointed out that
Colorado's TABOR is more ambitious with a larger reach. He noted
the differences between TABOR and SJR 2 as follows:
· SJR 2 is state-only where Colorado's TABOR has a
restriction on every level of government.
· SJR 2 has no restriction of debt.
· SJR 2 has 14 exceptions.
· SJR 2 is silent on the rebate of taxes that are collected
above the cap.
· SJR 2 does not have election provisions.
He remarked that resetting a spending cap with SJR 2 makes a
great deal of sense because there is not much point of having a
cap that is ineffective.
3:41:13 PM
He contended that Alaska's effective appropriations cap will
mirror that of Colorado's positive experiences. He said the
overarching concept is to strike a healthy balance between
family budgets and public goods which results in citizens and
elected officials asking the right questions. He opined that
having a good spending limitation forces people to ask questions
that are related to prioritizing within a given budget rather
than trying to fund wild dreams. He set forth that the value of
everyone living within a budget extends to government with smart
and fair measures that limits taxes and expenditures limitations
such as SJR 2.
He said Colorado has seen a very successful economy and noted
that the state did not have a successful economy before 1992. He
stressed that he was not suggesting causation as much as
recognizing that some of TABOR's opposition claimed that it
would damage the state's economy. He pointed out that Colorado
has a roaring economy.
MR. PFIFFNER noted that Colorado has program stability by
recognizing the natural inclination for government to grow too
fast in good times and to over promise and set up the base that
is far too high when fiscal challenges come. He said Colorado
has seen its fiscal crises limited, especially when compared to
states such as California and Illinois, states that have grown
their budgets immensely and then had to adjust to fiscal
challenges.
3:44:21 PM
He addressed typical challenges to government limitation where
budgets and K-12 spending will be damaged. He disclosed that
Colorado's fiscal and spending policies have compared favorably
to its neighboring states. He added that naysayers have said
Colorado does not have enough money, but noted that Colorado is
one of four states that spends more on a local basis than on a
state basis.
3:47:43 PM
He addressed SJR 2 and opined that some things have been done
that he thought would help gain support and allow citizens to
understand the measure better. He opined that there really is no
issue about rebasing to a lower level. He disclosed that
Colorado has dealt with a troubling aspect through the courts to
its voter approval requirement for new taxes where "fees" are
used. He said SJR 2 avoids the "fee" problem. He added that
states with successful expenditure limitations place them in
their constitution and SJR 2 does that. He summarized that SJR 2
takes the right step as a good and effective measure.
CHAIR DUNLEAVY stated that he wanted to contrast what Colorado
has done and what SJR 2 tries to accomplish. He asked if
Colorado's TABOR exists on both state and local levels.
MR. PFIFFNER answered correct. He pointed out that Colorado's
TABOR pertains beyond what Chair Dunleavy queried. He detailed
that Colorado has more than 3,400 special districts, mostly for
road, water and sewer, in addition to library and cemetery
districts.
3:51:42 PM
CHAIR DUNLEAVY noted that SJR 2 strictly pertains to state
spending. He asked if in Colorado, any type of revenue measure
must be voted on by the people.
MR. PFIFFNER described Chair Dunleavy's query as an
overstatement. He explained that new taxes, sunsetting taxes and
an increase in tax rates must be approved by voters, but fiscal
policy modifications that do not result in an increase in
revenues are exempt. He added that pension plan funding and
items that deal with fees are also exempt.
CHAIR DUNLEAVY asked if the same guidelines apply to local and
district levels as well.
MR. PFIFFNER answered correct. He detailed that local districts
specify their need for more debt or raising taxes and pointed
out that local measures have passed more than 80 percent of the
time.
3:54:24 PM
BARRY POULSON, Emeritus Professor of Economics, University of
Colorado, Boulder, Colorado, testified in support of SJR 2 with
added provisions. He detailed that he is also an advisor to the
American Legislative Exchange Council (ALEC). He disclosed that
Chair Dunleavy asked him to address Colorado's "Taxpayer Bill of
Rights" (TABOR) and experience with "Tax and Expenditure Limits"
(TEL) in other states.
He explained the Colorado's history with TELs as follows:
· Colorado was one of the first states to introduce a TEL in
the 1970s.
· Colorado's TEL in the 1970s was not effective because state
legislators chose to exempt major parts of the budget from
a limit.
· Colorado's spending was not constrained in the 1980s and
the state was a lot like California where government
spending grew more rapidly than the private economy.
· Colorado's TABOR constitutional amendment initiative was
enacted in 1992.
He said TABORs turned out to be one of the most effective tax
and spending limits in the country through substantive
constraints and procedural constraints. He detailed that
substantive constraints limit the growth of spending by any
jurisdiction to the sum of inflation plus population growth. He
added that any revenue above the limit must be rebated to
taxpayers. He specified that procedural constraints require
voter approval for any increase in taxes, tax-base, or increase
in debt.
He disclosed that Colorado's TABOR resulted in surplus revenue
in the late 1990s where over $3 billion was rebated to
taxpayers. He added that the TABOR set the stage for significant
tax reductions at all levels of government where Colorado ended
up with one of the best business tax climates that resulted in
the state experiencing the second highest rate of economic
growth of any state in the country.
3:58:27 PM
MR. POULSON detailed that Colorado ran into problems with TABOR
in 2001 when the state experienced a sharp recession with an 18
percent fall in revenue that resulted in the "ratchet effect"
where surplus revenue was rebated to taxpayers prior to the
state fully recovering from the recession. He disclosed that a
referendum in 2005 resulted in a timeout for TABOR from 2005
through 2009 and TABOR was applied again in 2010. He pointed out
that Colorado's economy recovered well from its recession and
the state is now growing more rapidly than most other states. He
opined that Colorado's positive tax climate has been a
significant factor in the state's rapid recovery and economic
growth.
He addressed procedural limits in TABOR regarding voter approval
for increased taxes, tax-base, and debt at all level of
government. He said for two decades, Colorado citizens have been
voting on hundreds of measures proposing increased taxes and
increased debt. Measures at the municipal level have passed
about 50 percent of the time, but at the state level taxpayers
have been more stringent. He disclosed that only two minor-tax
increases and a debt increase have been approved over the past
two decades. He set forth that citizens have been able to
constrain the growth of government significantly at all levels
and especially at the state level because of both the procedural
limits and the substantive limits in TABOR.
He reiterated that he serves as advisor to ALEC and disclosed
that model legislation for tax and spending limits was drafted
by ALEC using Colorado's TABOR as a model. He detailed that
refinements were made in ALEC's model legislation to include
providing for an emergency fund and a capital fund via surplus
revenue. He added that additional surplus revenue is rebated or
offset by tax cuts.
4:02:39 PM
He opined that Alaska's TEL is poorly designed and as a result
the limit has increased more rapidly than state revenue so the
TEL never constrains anything. He said a TEL must be carefully
designed to achieve a desired result. He concurred with Mr.
Pfiffner that SJR 2 appears to be a well-designed tax and
spending limit that will be much more effective than the TEL
that Alaska currently has in place. He opined that imposing the
limit on appropriation based on population growth and inflation
will constrain the growth of state spending very effectively in
addition to providing a much more stable spending growth over
the business cycle. He said Alaska, like many energy states, has
revenue volatility that results in spending volatility. He said
SJR 2 is an important step in the right direction. He added
Alaska's emergency fund and capital construction fund should
also assist in what the state is attempting to achieve.
4:04:27 PM
MR. POULSON addressed problems that Alaska might expect with SJR
2 as follows:
· TELs often put pressure on the state to fund programs with
fees.
· SJR 2 only constrains spending at the state level.
He suggested that the state address "fees" by having a very
strict definition of user fees and distinguish user fees from
taxes so that the state is sure to only restrict tax revenues
and expenditures. He added that unfunded mandates should be
limited by the state on local governments and suggested that the
restriction be included in SJR 2.
He recounted that he has suggested in the past that Alaska
legislators consider requiring a procedural limit that would
require voter approval for increased taxes and debt. He noted
that he has been told that his suggestion was a step too far. He
said legislators should reconsider his voter-approval suggestion
as either part of SJR 2 or as separate legislation. He asserted
that the procedural limits that require voter approval for
increased taxes and debt have proven to be very important in
Colorado and other states. He opined that the procedural limits
really do allow citizens to determine how much government they
want and how much they are willing to finance in terms of
government spending. He pointed out that outside of the U.S.,
citizens of Switzerland have been voting on increased taxes and
debt for more than a century and they have created one of the
strongest fiscal systems in the world.
4:07:50 PM
CHAIR DUNLEAVY asked that Mr. Poulson explain how TABOR has
either negatively or positively impacted Colorado's private
economy.
MR. POULSON replied that he often answers Chair Dunleavy's
question by contrasting Colorado and California. He explained
that Colorado and California had very similar government
spending patterns in the 1980s where government spending grew
much more rapidly than the state economy; in fact, both states
introduced tax and spending limits. He disclosed that California
gutted their tax and spending limits by shifting many state
programs and expenditures off budget to avoid tax and spending
limits. California ultimately experienced a continued rapid
growth of government spending where the state ended up with high
deficit and debt levels where their economy has underperformed
over the last two decades comparted to Colorado. He said his
experience is that with an effective tax and spending limit in
place, Alaska can create a better business-tax climate with the
right incentives created for business investment and growth, a
scenario that Colorado continues to do due to the success of
constraining government growth.
4:09:57 PM
CHAIR DUNLEAVY asked if Colorado's improved business climate is
due to businesses not having to worry about a predatory tax
regime.
MR. POULSON answered yes. He disclosed that Colorado's tax
climate rates among the top-ten states in terms of business
climate. He opined that TABOR allows citizens to decide how much
taxes they are willing to pay, how much spending they are
willing to incur, and how much government they want and are
willing to pay for.
CHAIR DUNLEAVY asked Mr. Poulson to address Colorado's debt and
how it relates to having TABOR in place.
4:12:33 PM
MR. POULSON admitted that the state has figured out a way around
debt limits. He explained that Colorado's original constitution
prohibited any new debt without citizen approval. He detailed
that state and local governments have used non-general
obligation debt; for example, certificates of participation
designate a specific revenue stream to pay off debt and the
courts have ruled that the debt is not a general obligation debt
and therefore not subject to the TABOR limit or to the original
constitutional limit. He said Colorado has not necessarily
constrained debt in the way that many might anticipate, but the
state has limited debt compared to what would have occurred
without TABOR. He revealed that Colorado has proposed five
different measures over the last two decades to increase debt
and only one measure has passed. He remarked that TABOR has been
important, but has not been 100-percent successful in
constraining debt.
4:14:06 PM
CHAIR DUNLEAVY asked Mr. Poulson if TABOR's restraint on
Colorado's growth of government has placed more money in
citizen's pockets and encouraged new business development.
MR. POULSON answered yes.
CHAIR DUNLEAVY pointed out that SJR 2 is not based on ALEC's
model legislation, but rather a modification of the existing
constitutional amendment that has been in place in Alaska since
1982 and reaffirmed in 1986. He reiterated that the amendment
was a result of increased government spending when the state
started to receive large sums of oil revenue in the 1970s;
however, the formula would require $10 billion in unrestricted
general funds to hit the limit. He said the idea is to revisit
the constitutional amendment to reflect today's new realities to
restrain government's growth and encourage investment from other
industries. He emphasized that the discussion on SJR 2 will
continue.
4:16:22 PM
MATTHEW MITCHELL, Senior Research Fellow, Mercatus Center at
George Mason University, Arlington, Virginia, testified in
support of SJR 2 and provided suggestions on fiscal policies. He
disclosed that the Mercatus Center has been studying fiscal
policies and institutions that govern them for several years. He
detailed that the Mercatus Center has consulted decades of peer-
reviewed academic research in addition to their own analysis
using comprehensive data sets and the best empirical techniques
that are available.
He set forth that there are three lessons to concentrate on:
1. Rules matter and rules are often a better alternative to
everyday politics:
· Sustainable solutions to budget problems require
institutional change versus short term remedies.
· Institutional change:
¾Changes to the rules that shape the political
legislative and budgeting process.
¾States with good institutions or good rules are
more likely to make good budgetary decisions.
2. Rule details make a big difference and small changes can
set states on very different paths:
· Characteristics that make for a good tax and
expenditure limit (TEL):
¾Effective TELs have a statistically significant
effect on state spending as measured by per
capita spending.
¾Effective TELs target spending rather than
revenue. Alaska's TEL targets spending.
¾Effective TELs limit budget growth via formula
that looks at the sum of inflation and population
growth. Alaska's TEL is focused on inflation and
population growth.
¾Effective TELs are codified into the
constitution, as is Alaska's.
¾Effective TELs require a super majority or public
vote to be overwritten, as is Alaska's. A lot of
states have tax and expenditure limits that can
simply be overwritten with simple majority vote.
¾Effective TELs prohibit unfunded mandates to
lower governments, Alaska's does not.
¾Effective TELs immediately refund any revenue
collected more than taxpayers' limits, Alaska's
does not. Returning money does not provide the
state with a chance to spend as well as giving
people some "skin in the game" in terms of tax
and expenditure limits.
· Use an appropriate base by picking a year that is
neither extraordinarily high in revenue,
extraordinarily tight, or a recession year. The base
should be founded on a year where spending was deemed
prudent. The base should not be "just the previous
year" in order to avoid the "ratcheting effect."
Alaska's TEL is based on 1981 and the Legislature
should make sure the year is appropriate.
3. Alternative rules for fiscal budgeting other than tax and
expenditure limits:
· Item reduction vetoes are effective. States that have
item reduction vetoes spend less. Alaska has item
reduction vetoes.
· Separate spending and taxing functions into two
separate committees in each chamber. States with
separate taxing and spending committees spend between
$300 and $400 less per person and tend to spend more
prudently.
4:26:48 PM
MR. MITCHELL noted that there are some rules that do not always
work the way people think they will. He pointed out that states
that have biannual budgets spend significantly more than states
that have annual budget cycles. He detailed that states with an
annual budget cycle spend $120 less person per year.
CHAIR DUNLEAVY asked Mr. Mitchell to identify a "model state"
that have separate taxing and expenditure committees that seems
to work well.
MR. MITCHELL replied that Arizona, Colorado, Utah, and Nevada
have separate taxing and spending committees.
4:29:06 PM
CHAIR DUNLEAVY held SJR 2 in committee.
4:29:26 PM
At ease.
SB 48-INS. FOR DEPENDS. OF DECEASED FIRE/POLICE
4:30:03 PM
CHAIR DUNLEAVY called the committee back to order. He announced
the consideration of SB 48, and noted that the bill has a
committee substitute (CS).
4:30:11 PM
SENATOR GIESSEL moved to adopt the work draft CS for SB 48,
version O.
CHAIR DUNLEAVY objected for discussion purposes.
4:30:31 PM
CHRISTA MCDONALD, Staff, Senator Mike Dunleavy, Alaska State
Legislature, Juneau, Alaska, reviewed the CS for SB 48. She
summarized the changes from the CS as follows:
· Changed the term "police officer" to "peace officer" in
order to extend the benefits to probation and correctional
officers.
· Consistently uses the term "major medical" throughout the
bill's work draft.
· Changed the annual deadline for the commissioner to
determine the amount of money sufficient to pay premiums to
December 15.
· Eliminates the gap of coverage by removing the requirement
for the surviving dependent having to apply to the
commissioner. After the date of death of a peace officer or
firefighter, the commissioner will have 30 days to
determine continued eligibility.
· Requires annual determination of continued eligibility by
the commissioner. The commissioner may require a surviving
dependent to provide relevant information to determine
continued eligibility.
· Clarified the term year-round by replacing it with,
"Fulltime position for which the state or municipality paid
or expected to pay the employee for 12 month each year."
· Established that a surviving spouse becomes permanently
ineligible for premium payments upon receiving 10 years of
premium payments, becoming eligible to receive major
medical insurance, or by reaching the age of 65, whichever
of those come first.
· Removed the word "immediately" to clarify that the
municipality may elect to participate in the fund at any
time.
· Expanded the definition of "firefighter" to, "An employee
of the state or municipality whose primary duty is to
perform fire suppression services."
· Replaced the definition of "police officer" with a new
definition for "peace officer."
4:32:37 PM
CHAIR DUNLEAVY removed his objection and announced that the CS
was adopted without objection.
SENATOR COGHILL, sponsor of SB 48, explained that the CS is a
result of trying to find ways to bring the bill in consistent
language; for example, the use of the terms, "medical" and
"major medical," the two terms have different meanings. He
specified that "major medical" was coverage without eye care and
dental care.
He opined that the care should be continuous, but with
limitations. He said he did not know if 10-year eligibility is
perfect, but determined that the period is consistent across the
U.S. as well as being used in a previous bill. He added that he
did not want the youngsters caught up in the 10-year limitation
by providing eligibility until age 26 or if insurance is
obtained from a job.
SENATOR COGHILL asserted that the legislation allows for the
best way to provide immediate care. He remarked that he was
disturbed when he heard that the month a trooper died his family
found out that they were without health insurance.
He provided additional details on SB 48 as follows:
· The presumption is coverage is provided until the
commissioner determines that there is an eligibility
problem, an easier determination for a commissioner to
make.
· Expands to correctional officers because they transport
dangerous criminals to and from jail.
· Allows municipalities to figure out a way to retroactively
pick up those that previously had the unfortunate
circumstances found in the bill.
· Requires the commissioner to annually tell the Legislature
what is in the fund.
· The fund rolls over and grows rather than being swept back
into the Constitutional Budget Reserve (CBR); however,
appropriation is up to the Legislature.
· Annual review by the commissioner determines continued
eligibility due to marriage, turning 65, or hitting the 10-
year mark. The review by the commissioner is a way to make
sure that there is communication.
· Changed eligibility from year-round employee to fulltime
employee. Providing coverage for a person that does
dangerous, fulltime work for 5 months or 8 months is
appropriate.
He summarized as follows:
It's a little different approach then what the other
body is doing, but I'm trying to stay independent and
just think through, "Okay, if I was a mayor and I had
to hire them, how would I deal with this thing?"
because what we are doing is we are actually paying a
premium for somebody to get an extended benefit, which
I think is entirely appropriate, but it should have
some limitations and I'm trying to decide the best
limitations that we can do and still make sure that
people are being taken care of well, it's just a way
to honor people the best way we can.
4:38:44 PM
SENATOR GIESSEL noted that in section 1, page 3, lines 6-9, the
sentence says, "On the day employee's death, the employee was
employed by the state or a municipality that was elected to
participate in a permanent fulltime position for which the state
or municipality paid or expected to pay the employee for 12
months each year." She asked if an individual worked in a
seasonal position for only four months that had an unfortunate
loss of life would be eligible.
SENATOR COGHILL clarified that a permanent-fulltime employee
would be covered. He noted that he would verify if a permanent
employee that worked seasonally would be covered.
SENATOR WILSON commented that he appreciated the change from
"police" to "peace officer" so that correctional and probation
officers are included.
SENATOR COGHILL explained that the focus is on people who are in
unpredictable and dangerous circumstances to make sure families
are not left high and dry. He conceded that fallen firefighters
or troopers have other benefits, but health care was a dramatic
empty spot. He explained that he was made aware when the wife of
a fallen trooper, constituents of his, was left languishing. He
said he made a commitment to do whatever he could to find the
best way to move forward. He explained that the coverage is
outside of the Public Employee Retirement System (PERS) because
the coverage cannot actuarily work in Alaska. He said the good
news is the state has too few people, but the bad news is there
are people that need coverage and the state must make sure they
are taken care of. He specified that the fund allows both
municipalities and the state to add into the fund that can be
drawn out immediately to pay the premiums for health care.
4:42:31 PM
CHAIR DUNLEAVY opened public testimony for SB 48.
4:43:23 PM
PAT HOLMES, representing self, Kodiak, Alaska, testified in
support of SB 48. He asked that Fish and Game field-staff be
considered for coverage as well. He disclosed historical
fatality records for Fish and Game field-staff.
4:46:45 PM
BRANDY JOHNSON, representing self and family, Fairbanks, Alaska,
read the following statement in support of SB 48:
I am testifying in support of SB 48 on behalf of
myself, my three daughters, my deceased husband, Scott
Johnson, surviving families of past and future line-
of-duty state troopers as well as law enforcement
officers in the State of Alaska.
On May 1, 2014, my husband, Scott Johnson and Gabe
Rich were murdered while in the performance of their
job in Tanana, Alaska. Scott's job was that of a
sergeant with the Alaska State Troopers, he had worked
as a state trooper for over 21 years with a total of
over 23 years vested in the public employee's
retirement system. He could have retired with 20 years
of service; however, Scott and I decided that he
should work another 5 years to gain the medical
benefits for our family after the 25-year mark as a
Tier II employee, it was while trying to obtain this
promised benefit goal that Scott was ambushed and
killed. Scott would have retired this past October
with major medical benefits for himself and our
family.
I had asked the state troopers assisting me after
Scott was killed if my family still had health
insurance, I initially was told that I was set for
life by one lieutenant; however, that was not the
case. I was later told that my family's benefits would
expire at the end of the month. I was disappointed and
angry, my choices were to pay $1,150 per month for the
retirement, major medical health care that he would
have received in a year and a half at no cost as a
retirement benefit, or $1,700 for full-coverage
[Consolidated Omnibus Budget Reconciliation Act]
(COBRA). What is frustrating is the person who shot my
husband to death and his father, who desecrated my
husband's dead body, while incarcerated have medical
care available at no cost to them as their families
also have free health care. I felt Scott's last three
years of service were all for nothing.
Scott always took his responsibilities very seriously
to protect the people of Alaska. I believed upon his
death the state would also take responsibility to now
take care of his family; graciously, the State of
Alaska has these two and a half years until the gap in
law could be resolved. Our family has paid the price
for this benefit. We have paid into the PERS
retirement system. We have paid with the endless call-
outs whether it be K-9, [Special Emergency Reaction
Team] (SERT), or one of the many other specialized
emergency responses Scott was involved with; this is
called, "To give of yourself for the sake of others."
I am here today asking for your support of SB 48; this
bill is more than what I have advocated the
Legislature for as a health benefit. SB 48 provides
full-coverage health insurance that takes care of
young surviving families that need the well-child
check-ups. The retirement health-care plan was not a
long-term solution; it was a band-aide so to say and a
safety net in case of a major-medical emergency. SB 48
will ensure that another surviving spouse does not
have to experience what I have; they will have the
assurance that their children will be taken care of if
there was a health emergency.
I would like to state my concern over one word in the
legislation, the word is "may" on page 3, line 27. As
a surviving spouse, I wouldn't want to hear "may elect
to participate." I have been left wondering about so
much in regard to life. By changing one word to
"shall" would provide a great sense of security and
comfort to past and future surviving spouses.
Thank you for your time and your consideration of this
important legislation.
4:50:36 PM
SENATOR COGHILL noted that Ms. Johnson had referenced the bill's
older version prior to the CS.
SENATOR GIESSEL pointed out that the language Ms. Johnson
referenced was on page 4, line 6.
4:51:47 PM
DAVID PRUHS, City Council Member, City of Fairbanks, Alaska,
testified in support of SB 48. He shared that the City of
Fairbanks also had a tragedy with the passing of Officer Brandt
where his insurance terminated immediately. He disclosed that
the City of Fairbanks took it upon itself to fund Mr. Brandt's
family's insurance for 2016, 2017, and most likely in 2018. He
noted that he did not review the CS for SB 48. He said he was
concerned about unfunded mandates to the City of Fairbanks and
possibly for carrying the cost of insurance to the Brandt family
through 2038. He asked that he have an opportunity to meet
privately with Senator Coghill to find a solution. He added that
the City of Fairbanks is talking about having a specific
insurance policy in its contracts with police officers to have
their insurance premiums funded throughout the life of their
spouses and for children up to the age of 26.
SENATOR COGHILL replied that SB 48 is not a mandate. He
explained that the bill has an opt-in for municipalities that
allows for a retroactive "look back." He detailed that the fund
is managed by the state, but the municipalities would have to
fund. He suggested that Mr. Pruhs review the bill's CS.
4:54:14 PM
PAULA JOHNSON, representing self and family, Fairbanks, Alaska,
read the following statement in support of SB 48:
Good afternoon, my name is Paula Johnson. Scott was my
brother in-law for almost 22 years until he was
murdered in the line of duty in Tanana, Alaska on May
1, 2014. Upon Scott's death, he was past his 20 years
with the state and could have retired prior to May 1,
2014. Prior to Scott's passing, he stood in his house
in a personal conversation and told me he is choosing
to put the extra five years in so he could retire with
full medical benefits for his family. Scott prided
himself in taking care of his family being the sole
wage earner so Brandy could stay home and raise their
three girls, this was very important to him and
Brandy. If Scott had not died in the line of duty on
May 1, 2014, he would have already retired and his
family would have full medical benefits. To fund SB 48
is the right thing to do for the family of slain
officers.
4:55:45 PM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League,
Juneau, Alaska, testified in support of SB 48. She said AML
appreciates that the bill is not an unfunded mandate. She noted
that many municipalities are behind in their worker's
compensation bills and new bills will simply not be paid. She
opined that every municipality seems to have had a police or
firefighter tragedy, but have "stepped up to the plate" and in
turn made communities stronger.
4:57:56 PM
SUSAN HECKS, Executive Director, Southern Region Emergency
Medical Services Unit (EMS) Council, Inc., Division of Public
Health, Alaska Department of Health and Social Services,
Anchorage, Alaska, testified in support of SB 48. She explained
that the State of Alaska is divided into seven-EMS regions and
the Southern Region EMS Council is one of the seven. She stated
that she was representing the seven regions. She added that the
EMS Regional Coordinators/Directors support SB 48 in addition to
her testimony. She stated that she supported the definition
change of "firefighter," but remarked that there was one aspect
missing from the bill regarding EMS personnel. She explained
that there are many EMS personnel who are not firefighters, but
they are also exposed to the same dangerous situations. She
asked that EMS personnel be included in SB 48.
5:00:49 PM
CHAIR DUNLEAVY stated that he would hold SB 48 for future
consideration, and public testimony would remain open.
5:01:34 PM
There being no further business to come before the committee,
Chair Dunleavy adjourned the Senate State Affairs Standing
Committee at 5:01 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 48 - DOA Fiscal Note.pdf |
SSTA 3/2/2017 3:30:00 PM |
SB 48 |
| SB 48 - DPS Updated Fiscal Note.pdf |
SSTA 3/2/2017 3:30:00 PM |
SB 48 |
| SB 48 - Letter of Support Teamsters Local 959.pdf |
SSTA 3/2/2017 3:30:00 PM |
SB 48 |
| SB 48 - Brandy Johnson Testimony.pdf |
SSTA 3/2/2017 3:30:00 PM |
SB 48 |
| SJR 2 -Mitchell, Mercatus Testimony.pdf |
SSTA 3/2/2017 3:30:00 PM |
SJR 2 |
| SB 48 - Mayor Matherly Letter of Support.pdf |
SSTA 3/2/2017 3:30:00 PM |
SB 48 |
| CS SB 48, Version O.pdf |
SSTA 3/2/2017 3:30:00 PM |
SB 48 |
| SB 48 - STA CS Summary of Changes.pdf |
SSTA 3/2/2017 3:30:00 PM |
SB 48 |