Legislature(2019 - 2020)ADAMS ROOM 519
05/23/2019 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB1005 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB1001 | TELECONFERENCED | |
| *+ | HB1005 | TELECONFERENCED | |
| += | SB 19 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
FIRST SPECIAL SESSION
May 23, 2019
9:00 a.m.
9:00:25 AM
CALL TO ORDER
Co-Chair Wilson called the House Finance Committee meeting
to order at 9:00 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Tammie Wilson, Co-Chair
Representative Jennifer Johnston, Vice-Chair
Representative Dan Ortiz, Vice-Chair
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Ben Carpenter (via teleconference)
Representative Kelly Merrick (via teleconference)
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
MEMBERS ABSENT
ALSO PRESENT
Alexei Painter, Analyst, Legislative Finance Division; Joe
Geldhof, AK Permanent Fund Defenders, Juneau; Vikki Jo
Kennedy, Self, Juneau; Representative Sarah Vance; Senator
Mia Costello; Representative Adam Wool; Senator Bert
Stedman; Representative Chuck Kopp; Representative David
Eastman;
PRESENT VIA TELECONFERENCE
Melody McCullough, Self, Wasilla; Robbi Douglas, Self,
North Pole; Chris Eichenlaub, Self, Eagle River; Linda
Timothy Wood, Self, Palmer; James Squyres, Self, Rural
Deltana; Ed Martin Jr., Self, Cooper Landing; Dave Maxwell,
Self, Palmer; Bert Houghtaling, Self, Big Lake; Mike Coons,
President, Greater Alaskan AMAC Action, Palmer; Mike
Alexander, Self, Big Lake; Kim Nelson, Self, Fairbanks;
Bernard Campbell, Self, Wasilla; Bonnie Thumma, Self,
Fairbanks; Paula Gallagher, Self, Homer; Adam Hykes, Self,
Homer; Roxanne Lester, Self, Fairbanks; Randy Griffin,
Self, Fairbanks; James Walsh, Self, Kasilof; Deborah
Holland, Self, Anchorage; David Hurn, Self, Wasilla;
Pattrice Illguth, Self, North Pole; Gary McDonald, Self,
Anchorage; Ronald Seaman, Self, Kodiak; Thomas Griffith,
Self, Salcha; Gail Limbaugh Moore, Self, Soldotna; Ben
Britten, Self, Fairbanks; Tanya Kitka, Self, Kodiak; Paul
Rugloski, Self, Homer; Stephen Duplantis, Self, Anchorage;
William Topel, Self, Anchorage; Teresa Storch, Self,
Kodiak; Abby St. Clair, Self, Wasilla; Jennie Katchatag,
Self, Unalakeet; Diane Macrae, Self, Anchorage; Anna
Walters, Self, Anchorage; Garet Abbot, Self, Ketchikan;
Amonte Wallace, Self, Anchorage; Frances Bennett, Self,
Anchorage; Lorraine Ergnaty, Self, Wasilla; Gordon Johnson,
Self, Juneau; Maynard Willburn, Self, Craig; Sally Johnson,
Self, Palmer; Timothy Ingraham, Self, North Pole;
Antoinette Bradley, Self, Wasilla; Daryl Schierholt, Self,
Wasilla; Lloyd Dan Hollingsworth, Self, Anchorage; Edward
Bias, Self, Palmer; Kelley Cizek, Self, Soldotna; Greg
Collins, Self, Homer; James Gentry, Self, Anchorage;
Coliwitichec Gentry, Self, Anchorage; Kimberly Clark-Thiry,
Self, Anchor Point; Corbin Arno, Self, Homer; Lynn Lowrey,
Self, Wasilla; Bill Iverson, Self, Soldotna; Vivian
Swanson, Self, Soldotna; William Brown, Self, Wasilla; Faye
Sarren, Self, Anchorage; Michael Dukes, Self, Wasilla;
Debra Kuse, Self, Wasilla; Dean Camery, Self, Eagle River;
Barbara Baughn-Bookey, Self, Kenai; Sharon Gherman, Self,
Soldotna; Bill Price, Self, Wasilla; Clem Tillion, Chair,
PFD Defenders, Halibut Cove; Joseph Ward, Self, Palmer;
David Witt, Self, Palmer; Morma Harrison-Davis, Self,
Palmer; George Pierce, Self, Kasilof; Raymond Hill, Self,
Anchorage; Nancy Hill, Self, Anchorage; Lynda Myers, Self,
Anchorage; Dr. Diana Chadwell, Self, Delta Junction;
Patrick Schlicting, Self, Delta Junction; Garvan Bucaria,
Self, Wasilla; William Kenyon, Self, Cordova; Liz Senear,
Self, Cordova; Herman Morgan, Self, Aniak; Elizabeth Holm,
Self, North Pole; Kim Short, Self, Houston; Leslie
Hvamstad, Self, Houston; Williams Lambert, Self, North
Pole; Carolyn Porter, Self, Palmer; Christine Robbins,
Self, Fairbanks; Mike Prax, Self, Fairbanks; Sally Foly,
Self, Anchorage; Kathy Miller, Self, Kenai; Adam Cardwell,
Self, Willow; Chuck Derrick, Self, Fairbanks; John Rathbun,
Self, Fairbanks; Mark A. Ames, Self, Fairbanks; Dixie
Banner, Self, Wasilla; Valerie Nabinger, Self, Anchorage;
Tina Minster, Self, Sterling; Robert Heatherington, Self,
Fairbanks; Eric Knowlton, Self, Wasilla; Monique Duncan,
Self, North Pole; Ervin Malcuit, Self, Wasilla; Marcy
Sowers, Self, Wasilla; Emily Florian, Self, Wasilla;
Charles Lester, Self, Delta Junction; Patrick Martin, Self,
Wasilla; Lorna McAninch, Self, Anchorage; Sandra Delong,
Self, Juneau; Anthony Baiocchi, Self, Wasilla; Marie Culp-
Washburn, Self, Kenai; Troy Scott, Self, Anchorage; Jeff
Nelson, Self, Wasilla; Bruce Williams, Self, Wasilla; Ken
Brown, Self, Soldotna; Steward Spence, Self, Homer; Kristen
Bush, Self, Eagle River; Christopher Nugent, Self, Wasilla;
Mark Prentice, Self, Kenai; Rob Kinney, Self, Willow;
Timothy Mayberry, Self, North Pole; Sarah Ann Jackson,
Self, Juneau; Walter Rose, Self, Nome; John Lisenbee, Self,
Anchorage; Gerry Balluta, Self, Ketchikan; Stephanie Clay,
Self, Anchorage; David Hurn, Self, Wasilla; Rachel
Colvard, Self, Anchorage; Jeb Stuart, Self, Wasilla; Roy
Sumner, Self, Wasilla; Bob Barndt, Self, Eagle River; Allen
Cruce, Self, Palmer; Barbara McMahan, Self, Fairbanks;
Jonathan Lovejoy, Self, North Pole; Pierre Aiman, Self,
Chugiak; Jeanne Sullivan, Self, Wasilla; Lila Jensen, Self,
Anchorage; James Macrae, Self, Kasilof; Aaron Benjamin,
Self, Talkeetna; Jeannie Pierce, Self, Wasilla; Durainey
Rawls, Self, Nikiski; Dale Austermuhl, Self, Fairbanks;
Crystal McKenzie, Self, Anchorage; Elizabeth Sweet, Self,
North Pole; Ken Seagle, Self, Anchorage; Laura White, Self,
North Pole; Kevin Macan, Self, Juneau; Robbie Campbell,
Self, Kenai; David Mignon, Self, Anchorage.
SUMMARY
HB 1005 APPROP: PERMANENT FUND DIVIDEND; CBR
HB 1005 was HEARD and HELD in committee for
further consideration.
HOUSE BILL NO. 1005
"An Act making special appropriations for the payment
of permanent fund dividends; making appropriations
under art. IX, sec. 17(c), Constitution of the State
of Alaska, from the constitutional budget reserve
fund; and providing for an effective date."
9:01:20 AM
Co-Chair Wilson indicated that for the previous 3 years,
the statutory formula had not been followed. During the
time, a percent of market value (POMV) passed the
legislature. It provided an annual draw of 5.25 percent of
the average balance of the Permanent Fund (PF) which was
the average of the first 5 of the previous 6 years. When
the legislation passed, the split between government
services and dividends was not established. The bill was an
attempt to start the conversation. The amount of each
payment was based on a 5-year average of the PF
performance, and the Permanent Fund Dividend (PFD) was
calculated with the following steps. First, funds were
added to the statutory net income from the current and
previous 4 fiscal years. The amount was multiplied by 21
percent, divided by 50 percent, then divided by the number
of eligible applicants.
Vice-Chair Johnston MOVED to ADOPT the proposed committee
substitute for HB 1005, Work Draft 31-LS1015\S (Bruce,
5/22/19)(Copy on file).
Representative Sullivan-Leonard OBJECTED. She did not
believe the bill was the proper vehicle for the PFD
disbursement.
Co-Chair Wilson reported that the committee would review
what was in the working document. She referred to version S
of HB 1005, Section 1 which appropriated $1.44 million from
the Earnings Reserve Account (ERA) to the dividend fund.
Section 2a repaid appropriations from the budget reserve
fund to the sub-funds and accounts from which the funds
were transferred. Section 2b appropriated $500 million from
the Constitutional Budget Reserve (CBR) fund to the
dividend fund. Section 2c allowed borrowing out of the CBR
to cover expenditures. Section 3 specified that
appropriations made in Section 1 and Section 2b were for
the capitalization of the fund and did not lapse. Section 4
contained contingency language in which appropriations made
in Section 1 and Section 2b were only enacted into law if
the dividend calculations were changed and put into statute
(which would require additional legislation). Section 5
specified an effective date of July 1, 2019.
9:03:46 AM
Co-Chair Wilson invited Mr. Painter to provide further
detail on HB 1005.
ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
provided a PowerPoint presentation comprised of two bar
charts developed by the Legislative Finance Division (copy
on file). The first chart on slide 1 showed the PFDs paid
over the previous 3 years to the dividends proposed under
the formula in HB 1005. In FY 20 there would be a larger
dividend. He highlighted that in future years the dividend
would be between $1500 and $1750. The spikes were due to
the volatility in past earnings that caused it to jump
around.
Vice-Chair Ortiz understood that the committee was looking
at projections for the future based on the passage of
HB 1005. He asked if the projection in FY 21 and FY 22
reflected the impact of the amount of reductions in the ERA
in lost income. He asked if the numbers reflected the draw.
Mr. Painter replied in the negative. He noted that the bill
might not currently reflect the final version of the draw.
As structured, it would cause a budget surplus, which he
did not think was the intent of the legislature. The chart
was simply an illustration of the formula.
Representative Sullivan-Leonard considered the past
calculations for the dividend. She asked if the chart
showed the actual dividends paid in FY 17, FY 18, and
FY 19. She did not think it was a clear depiction of what
the dividend should have been with the calculation that was
currently in statute. She asked if the figures were
available for comparison. Mr. Painter replied he could
provide the figures.
9:06:42 AM
Vice-Chair Johnston asked if he could approximate the full
dividends and the cost of the funds to the ERA going
backwards. Mr. Painter did not recall the calculations off
the top of his head.
Vice-Chair Johnston asked for further follow-up to the
committee to see the loss of earnings reflected by full
dividends.
Co-Chair Wilson added that her office would work with LFD
to get the information to committee members.
Mr. Painter turned to the chart on slide 2 which showed the
projected balance of the PF principal and the ERA if the
POMV draw was followed without any draws above the amount.
It would grow with inflation going forward.
Vice-Chair Johnston requested an additional slide in the
future showing the royalty deposits compared to the current
ERA. Mr. Painter asked Vice-Chair Johnston if she was
wanting the information from the inception of the fund.
Vice-Chair Johnston responded, "Yes."
Representative Josephson asked if the slide reflected what
was projected under SB 26 [Legislation passed in 2018
regarding the appropriation limit, the Permanent Fund, the
dividend, and the ERA] without adjustment. Mr. Painter
replied in the affirmative.
Representative Wilson reminded members that there was an
objection on the motion.
Representative Sullivan-Leonard MAINTAINED her OBJECTION.
Representative Josephson asked for a brief explanation of
changes.
9:09:34 AM
AT EASE
9:10:13 AM
RECONVENED
Co-Chair Wilson reviewed the changes in the work draft.
There were changes made in the contingency language on page
2, Section 4, line 19 to reflect a POMV and an automatic
transfer from the ERA. She referred to page 2, line 21
indicating the word "transfer" was deleted, and the word
"appropriation" was inserted. She pointed to line 22 in
which "earnings reserve" was deleted and "general fund" was
inserted. She explained that the change reflected an
automatic transfer which helped the legislature stay within
the POMV and not taking extra distributions. Next, she
referred to line 23 in which "AS 37.13.140" was deleted and
"AS 37.13.140(a)" was inserted and where the calculation of
the PFD could be found. She explained that AS 37.13.140(b)
was the POMV calculation. She clarified that the committee
was not voting to pass the bill out. Rather, the committee
was voting to put version S before the committee as the
working document.
Co-Chair Wilson indicated her intent to keep public
testimony open to allow everyone to speak to the bill.
Representative Josephson asked for verification that the
motion would spend about $700 million or $800 million less
than the original version. He thought that was the impact.
Co-Chair Wilson replied that the bill would fully fund a
$3,000 dividend with a portion from the ERA and a portion
from the CBR. The change was to avoid taking any more out
of the highest producing account. The Constitutional Budget
Reserve made about 2 percent versus the ERA which made
anywhere from 6 percent to 9 percent. The bill funded a
full PFD for the current year.
Representative Sullivan-Leonard MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Josephson, Johnston, Knopp, LeBon, Foster,
Wilson
OPPOSED: Sullivan-Leonard, Tilton, Merrick
The MOTION PASSED (7/3).
Representative Carpenter was absent from the vote.
9:13:21 AM
Co-Chair Wilson OPENED public testimony.
MELODY MCCULLOUGH, SELF, WASILLA (via teleconference),
spoke in opposition to HB 1005. She did not want any change
to the PFD. She supported a full PFD payout. She thought
Alaskans were tired of having their money taken away. She
used her PFDs to support her grandchildren which helped
significantly. She also used the monies to pay her fuel
bills. She was in support of HB 1002. She urged members to
listen to their governor.
9:17:06 AM
ROBBI DOUGLAS, SELF, NORTH POLE (via teleconference), did
not support cutting the PFD. She relayed the definition of
theft. She stressed that the value of the dollar was
relative to how many a person had. She could not compete
with a lobbyist that made $1 million per year. She stated
that paybacks were horrible if a person was on the wrong
end. She supported the governor. She thought there were
ramifications for stealing what did not belong to another
person.
9:18:54 AM
CHRIS EICHENLAUB, SELF, EAGLE RIVER (via teleconference),
spoke in opposition to HB 1005. He thought the legislature
was breaking the law when it reduced dividends. He stated
the PFD formula had been working for 40 years, he did not
want a change. He mentioned a recall effort which he
believed was akin to awakening a sleeping giant. He thought
the actions of the legislature were dishonorable. He wanted
the legislature to honor its agreements.
9:20:57 AM
LINDA TIMOTHY WOOD, SELF, PALMER (via teleconference),
testified in opposition to the bill. She encouraged members
to remove sections 2, 3, and 4 of the bill. She thought the
legislature should listen to the people of Alaska. She
thanked members for the opportunity to speak.
9:21:59 AM
JAMES SQUYRES, SELF, RURAL DELTANA (via teleconference),
spoke against HB 1005. He supported a full PFD under the
current statute. He believed the legislature had broken the
law in the previous 3 years. He questioned whether the bill
was a legally committee-sponsored bill. He made reference
to an Alaska statute. He thought the footprint of
government was too large. He believed the structure would
quickly outgrow the Band-Aid the legislature was trying to
apply. He supported a full PFD and thought that the issue
should be placed before the people of Alaska for a vote.
9:22:54 AM
ED MARTIN JR., SELF, COOPER LANDING (via teleconference),
testified against the bill. He stated that his father had
worked hard to get a vote on the ballot in 1999. At the
time 83 percent of the people did not want their dividend
touched. He opined that times had changed. However, the
money in the ERA belonged to the people created by the
investment of 25 percent of the mineral wealth in the
state. It was set aside for the Permanent Fund to invest
and return a dividend to the people. He stressed that the
CBR was not crafted to pay out PFDs. He thought the
legislature's failure to follow the state statutes had led
to an either-or situation. He asked the legislature to
start following the law. He made reference to an article in
the Anchorage Daily News. He stated the will of the people
would show up sooner or later. He stated that too many
people depended on the PFD.
Co-Chair Wilson clarified that the article in the Anchorage
Daily News described what the bill did. It did not state
that a person would not receive a full PFD. In the bill a
person would receive a full PFD because it would follow
statute. The bill in its current form would change the
statute which would dictate the new amount.
9:26:07 AM
DAVE MAXWELL, SELF, PALMER (via teleconference), opposed to
HB 1005. He stated that if the legislature did not get its
job done, residents in Palmer looked forward to the
legislature coming to Mat-Su to be in the room. He spoke in
support of the governor. He wanted to obligate the
legislature to support what the people of the state wanted.
He did not believe the legislature was coming up with good,
solid options. He wanted to go back to HB 1002 and did not
support HB 1005. He encouraged members to get their job
done.
Co-Chair Wilson asked testifiers to stick to the bill
subject.
9:29:23 AM
BERT HOUGHTALING, SELF, BIG LAKE (via teleconference), did
not support the bill. He did not support the claim that the
bill was best for all Alaskans. He thought the bill was
deceptive, as it would provide a full PFD for the first
year, but would decrease the amount each year after the
first. He wanted to see the Permanent Fund protected in the
constitution, the formula to stay the same, and the
legislature to keep its hands off the PFD. He wanted to see
the budget further reduced. He referenced Kaktovik, Alaska
as an example of a location that was trying to get Alaska
National Wildlife Refuge (ANWR) open to have their own oil
revenues. He thought the town of Kaktovik was admitting to
living off of government handouts. He did not support
taking money from the CBR and the ERA to pay the PFD. He
thought the legislature was not following statute. He
supported HB 1002, HB 1003, and HB 1004.
9:32:00 AM
MIKE COONS, PRESIDENT, GREATER ALASKAN AMAC ACTION, PALMER
(via teleconference), testified in opposition to the bill.
He stated that the PFD was paid out of the ERA. He strongly
argued against paying the PFDs from the CBR. He asked the
legislature to maintain the CBR for emergency use as it was
intended. He stressed that the legislature needed to follow
the rules. He did not support remarks made by Co-Chair
Wilson related to the past PFD under the Walker
Administration justifying the reduction. He hoped the
governor would veto the bill, as it violated statute. He
asked the committee to fully fund the PFD solely from the
ERA. He supported the removal of Section 2 of the bill and
any other language in Section 3 and Section 4 that were
related to Section 2. He also wanted changes made to
Section 1 that would provide a full PFD appropriation.
Additionally, he supported HB 1001 and HB 1002, the
governor's bill.
9:34:23 AM
MIKE ALEXANDER, SELF, BIG LAKE (via teleconference),
opposed the bill. He voted for Mike Dunleavy, no taxes, a
full PFD, getting retroactive PFD monies, and a budget
reduction of $1.6 billion. He considered the bill to be a
bait-and-switch effort. He did not understand how the
legislature could think most Alaskans were unintelligent.
He thought the legislature was stealing from Alaskans
including future generations.
9:35:42 AM
KIM NELSON, SELF, FAIRBANKS (via teleconference), did not
support the bill. However, he supported HB 1001 and HB
1002. He believed HB 1005 was a bait-and-switch bill. He
thanked members for their time.
9:36:47 AM
Co-Chair Wilson clarified the correct email addresses where
written testimony could be sent.
9:37:04 AM
BERNARD CAMPBELL, SELF, WASILLA (via teleconference),
opposed HB 1005. He expressed his disappointment in Senator
Wilson referring to a previous conversation with him. He
suggested that if government officials thought money was
available, they were entitled to it. He stressed there was
a ballot box which people would use to express their
disapproval. He restated his opposition to the bill.
9:38:36 AM
Co-Chair Wilson believed Mr. Campbell was referring to
Senator Wilson who was not present at the meeting, as it
was a meeting of the House Finance Committee. She wanted to
ensure that words were not being put in the mouth of a
senator.
9:38:57 AM
JOE GELDHOF, AK PERMANENT FUND DEFENDERS, JUNEAU, shared
that the group included Clem Tillion, Jack Hickel, Juanita
Cassellius, and Rick Halford. He did not believe the
committee members were diabolical or engaged in treachery.
He did not believe any of the members lacked honor. He
understood they were between a rock and a hard place. Some
of the hard places had been created by past actions of the
legislature. Some rocks existed because some legislators
refused to accept the idea that there were other tools for
building a sustainable budget. He posed the question as to
what to do when between a rock and a hard place. He
reported that the Permanent Fund Defenders were absolutely
committed to protecting the Permanent Fund and to having a
full PFD. However, given the political and financial
realities that legislators faced, it was difficult. He had
a couple of recommendations. First, he did not think
HB 1005 was acceptable because it took funds from the CBR.
He thought the public would view the idea as gimmicky and
unacceptable. There were very high expectations of
receiving the full statutory dividend. He thought what the
legislature should do, pointing to the red bars in the
chart, was not in the bill. He suggested transferring a
very large portion of the funds in the ERA to the corpus,
or trust, of the Permanent Fund. Second, he suggested the
legislature should pay the full PFD for the current year.
He indicated that what the legislature did in the outyears
would be a matter of excruciatingly political choice. He
reiterated that paying the full PFD in the current year and
transferring a large sum from the ERA to the corpus of the
Permanent Fund made sense presently and for future
generations. The Permanent Fund Defenders believed that the
formula for paying the Permanent Fund should be placed in
the constitution. He continued that putting it in statute
as the measure did in the bill would not be liked by the
public. It would be vetoed by the government or rejected
through the referendum process. He understood what the
legislature was trying to do. However, it was a "dog that
won't hunt." He urged members to reduce the red bars by
moving the lion's share of the ERA into the Permanent Fund
and pay the full PFD in the current year. He reminded
members of their constitutional obligation to pass a
budget.
9:42:53 AM
Co-Chair Wilson clarified that CBR funds had been utilized
in the bill because, unlike in other years, when the
percent of market value (POMV) was passed, 5.25 percent had
already come out of the ERA. Normally the draw would not
have happened until an operating budget was passed.
Presently, the state had to look for other funding to
ensure there was enough money for operating costs and the
dividend.
Vice-Chair Johnston pointed out that often the term
Permanent Fund Dividend and the Permanent Fund were used
interchangeably. She posed a clarifying question to Mr.
Geldof. She asked if he wanted a constitutional amendment
that placed the POMV in the constitution.
Mr. Geldhof answered that the Permanent Fund Defenders was
an organization that protected the Permanent Fund and the
Permanent Fund Dividend. The position of the organization
was that the existing statutory formula that contemplated
the payout based on a 5-year rolling average was the
provision that should be embodied in the Alaska
Constitution.
Vice-Chair Johnston asked if he was saying the current
formula should be in the constitution.
Mr. Geldhof answered in the affirmative. The formula had
endured for 40 years and had resulted in huge benefits to
the state's economy and to individuals. It had lifted
people out of poverty. The organization thought it was
worth continuing. He understood there were enormous
pressures on all legislators to fund the budget and, the
money had to come from somewhere. The legislature had run
through almost all of the money in the CBR and the
Statutory Budget Reserve (SBR). The ERA was presently the
target.
9:45:46 AM
Vice-Chair Johnston thought she was getting a mixed signal.
She suggested that in Mr. Geldof's scenario there might not
be enough funds in the ERA to fully fund the dividend. She
asked how he would deal with the situation.
Mr. Geldhof answered that it was the firm belief of the
Permanent Fund Defenders that the funds in the ERA and the
Permanent Fund were funds belonging to the public and were
funds derived from the decision collectively made to put 25
percent of the funds into a reserve or trust fund. In the
sense that the citizens received a dividend, the
organization's position was that it should flow. There was
no guarantee that the people of Alaska would receive any
amount. If the state experienced 6 consecutive years of bad
market performance, the citizens of Alaska would not
receive a PFD. Everyone shared in the formula. He suggested
that in no way should citizens mandate a guaranteed income.
He reiterated they were talking about a public wealth -
when the markets did well, the citizens also did well.
There had been a couple of occasions where the state went
through difficult economic times and citizens had to
tighten their belts.
Vice-Chair Johnston stated she had seen posts and
discussions about people having a sovereign right to
receive a dividend. She asked if he could provide
clarification.
Mr. Geldhof assumed she was speaking about an individual.
He asked if he was correct.
Vice-Chair Johnston affirmed. The statement confused her
from a legal aspect. She commented that a sovereign meant
there was a king and queen. She asked Mr. Geldof if he was
an attorney.
Mr. Geldof confirmed he was an attorney.
Vice-Chair Johnston asked him to define "sovereign right"
as it pertained to the PFD.
Mr. Geldhof believed that the term came from a person who
had spent too much time on the internet. He suggested that
there were high expectations of receiving a PFD. There had
been a recent frenzy whipped up directed at legislators to
fulfill. He suggested that to fulfill the expectation, the
legislature needed to embody a formula in the constitution
that worked for Alaska's citizens and state government. It
would help to avoid an annual fight and threats about the
consequences of not fulfilling what the people wanted. He
suggested that legislators were working in a rugged
environment. He appreciated all of the people involved in
the organization. The provision in the bill presently with
the contingencies would further alienate and confuse the
public. He thought some hard choices would have to be made.
It was difficult because the chief executive had taken a
major tool away. The legislature was stuck with taking
money out of the Permanent Fund or making massive cuts. He
reiterated the need to move as much of the money in the ERA
into the corpus of the Permanent Fund, because then the
money was truly safe. The only other thing the legislature
would have to worry about was making sure the corporation
was properly inflation-proofing the fund.
9:50:28 AM
Co-Chair Wilson reminded members the testifier was not on
the witness stand.
Representative Knopp thank the testifier for his testimony.
He reported that there were 2 bills being vetted that would
transfer either 8 billion or 12 billion into the corpus. He
thought there was agreement that monies needed to be moved
to the trust. He acknowledged Mr. Geldof's comments about
paying out a full dividend would be adhering to a full
dividend. He provided some background around the Permanent
Fund Dividend formula. He thought the Permanent Fund
Defenders had to acknowledge that when the legislature
passed SB 26, there was going to be a need to change the
formula. It sounded as if the organization was
acknowledging the need for a new formula.
Mr. Geldhof replied that the issues surrounding the formula
were multiple. People had asked the organization numerous
times what its position was on the POMV. He suggested that
because the public was familiar with the existing statute
and because the formula had worked for so long, the
organization had taken the position that the formula needed
to be placed inside the constitution. There was a trust
issue, not related to a particular legislator. However, the
public, after the Wielechowski case, understood that unless
the formula was placed into the constitution, it would
always be up for grabs.
Mr. Geldhof continued that the trouble with the POMV was
that if it was more than about 4.125 or 4.2 percent in a
100-year cycle, it would be unsustainable. He commented
that 5.25 percent might look good right now, but at some
point, it would not work. It was recommended to build a
POMV on a 100-year average rather than a 10-year average.
If a POMV was going to be used, the percentage would need
to be closer to 4 percent. The split on 4 percent could be
debated thereafter. He reiterated that the public had a
lack of trust with there being no permanency in the
formula. Having the formula in statute was not enough to
satisfy the public, as statutory law could be easily
changed. He advised the committee to pass a budget, pay a
full dividend, and put a large sum of money into the corpus
of the Permanent Fund.
Co-Chair Wilson reminded members the discussion was about
HB 1005. She thought the discussion was good.
9:56:55 AM
Representative Josephson was disappointed. He had worked
with Mr. Geldhof on cruise ship reform that they had both
opposed. He did not think the group had added much to the
discussion because they were not offering a solution. He
asked why he was more concerned about a $40 million cut to
the Alaska State Ferry System than Mr. Geldhof seemed to
be. His question was rhetorical.
Co-Chair Wilson clarified Representative Josephson was
going off topic. She stated that Mr. Geldhof had offered
the solution of maintaining the current PFD statute and
transferring a large sum of $10 billion to $12 billion from
the ERA to the corpus of the Permanent Fund. She did not
think that a person could read within his testimony what he
felt was or was not important in the operating budget. She
directed Representative Josephson to limit his questions to
HB 1005.
Representative Josephson commented that the most
conservative body in the building could only cut $200
million. The state needed to cut an additional $1.4
billion. He asked Mr. Geldhof what he would cut.
Co-Chair Wilson clarified that Representatives question
did not pertain to HB 1005.
Representative Josephson thought his question was valid
because Mr. Geldhof wanted the legislature to fully fund
the dividend. He wanted to know how Mr. Geldhof would fully
fund a dividend.
Co-Chair Wilson indicated the question did not pertain to
the current bill being addressed. They could have a
discussion outside of the committee meeting.
Mr. Geldhof thanked the committee.
Vice-Chair Ortiz asked for verification that Mr. Geldhof
was not supportive of the bill in its current form.
Mr. Geldhof affirmed.
Vice-Chair Ortiz noted that his testimony encouraged the
legislature to payout the full PFD under the formula and
pass a budget. He wondered if his suggestion was to include
the PFD as part of the budget.
Mr. Geldhof replied that the legislature had some
interesting strategic and tactical choices to make. There
was agreement that moving large sums from the ERA into the
trust was a savvy financial move and sound political move.
Passing a budget with or without a capital budget or the
allocation for the Permanent Fund Dividend at whatever
level was a separate question. He recommended giving
thought to enacting an operating budget without a Capital
Budget and without the Permanent Fund Dividend deferring
those items until the governor had gone through the veto
process. The landscape would clear up significantly by
doing what the legislature was constitutionally required to
do to pass an operating budget that included moving a
large sum from the ERA to the Permanent Fund corpus.
10:01:31 AM
Vice-Chair Ortiz joined Representative Knopp in his belief
that it would be a good thing to put a substantial portion
of the ERA into the principal. He asked if moving a large
sum into the corpus left the legislature in a position
where it was unable to pay out a full PFD the following
year.
Mr. Geldhof acknowledged the potential, similar to the
possibility of not having enough money if the markets were
to tank. The calculus was whether the citizens of Alaska
would understand that the legislature placed money,
otherwise accessible through a majority vote, into trust.
He believed the public would like the move. He also
believed they understood that by transferring the funds,
there might be a risk of a guaranteed PFD payout. On
balance, he thought they would understand. He urged members
to stop eyeing the ERA and lock it up. The risk of being
shorted on a dividend by putting money into trust would be
understood. Whereas, the public would be angry if there
were short funds and the legislature deflected a large
portion of the ERA monies out of their shortened PFD and
into things they did not consider valuable whether that was
ferry services, social workers, or paved roads. He argued
that there was no downside to moving money into the corpus.
Co-Chair Wilson thanked Mr. Geldhof for the conversation.
10:04:59 AM
BONNIE THUMMA, SELF, FAIRBANKS (via teleconference), asked
about HB 1005. She understood that a full dividend would be
paid out the first year. She wondered what the payout would
be in the outyears.
Co-Chair Wilson pointed to contingency language on page 2,
lines 19-22. The language reflected a change of the
dividend fund of an amount equal to 25 percent of the
income available for distribution. In other words, it would
follow the current statute for the first year but would
change the formula in the out years. In order to make the
change, another bill would also have to be enacted changing
the formula.
Ms. Thumma opposed HB 1005. She fully supported the
original formulation for the dividend. She asked members to
honor Alaskan citizens. Many relied heavily on the PFD
helping with the high cost of living in Alaska and
particularly in Alaskan villages. She thanked the
committee.
10:07:38 AM
PAULA GALLAGHER, SELF, HOMER (via teleconference), strongly
opposed HB 1005. She thought the bill was disgraceful. She
asserted that the people had already spoken with their vote
for Governor Dunleavy. She offered her support for HB 1002.
She expected the legislature to do its job. She thought it
was the little people who typically got hurt. She thanked
the committee for its time.
Co-Chair Wilson noted that Representative Sarah Vance was
present in the room.
10:08:43 AM
ADAM HYKES, SELF, HOMER (via teleconference), did not
support HB 1005. He supported HB 1002, HB 1003, and HB
1004. He believed that ownership of resources shared in
common, above or below ground, belonged to the people of
Alaska. He supported the governor's proposal for a full PFD
as well as payment for prior PFDs. He advocated for a
restoration of trust between citizens and legislators. He
believed it was the legislature's job to defend and promote
the general welfare of the public. However, it did not mean
providing for the general welfare of the people. Alaskans
could take care of themselves just fine.
10:10:19 AM
ROXANNE LESTER, SELF, FAIRBANKS (via teleconference), spoke
in opposition to HB 1005. She believed government, rather
than the PFD, should be reduced. She wanted to see a full
PFD restored. She urged members to do what was right for
the people of Alaska. She argued that the formula had
worked for the last 40 years and did not need to be
changed. She commented that people were hurting because of
the PFD reduction which was reflected in Alaskas economy.
10:11:13 AM
RANDY GRIFFIN, SELF, FAIRBANKS (via teleconference),
indicated he would support HB 1005 under certain
conditions. He really supported a PFD that fit within an
honest and sustainable budget. He wanted to see the
operating budget, the capital budget, and the PFD combined
to match sustainable honest revenues. He suggested that the
more the budget was trimmed, the larger the PFD could be.
He did not believe the PFD should exceed a balanced budget.
He was a blue-collar worker and could use the PFD. However,
over the previous 4 years, he had donated his PFD checks
back to state government. He would be doing the same thing
in 2019 unless there was a balanced budget. He reported
that if a private company had a loss, they would not give
out a dividend. If a company experienced a surplus, they
might give out a dividend. He thought the government should
follow the same example. He supported HB 1005 under the
condition that there is a sustainable balanced budget. He
strongly believed that the state should not exceed the draw
limit of 5.25 percent, as it was not sustainable. He did
not want to see the limit of ERA spending violated. He
suggested that the only other legal place to draw funds was
from the CBR. He did not think dipping into savings was a
good idea, but at least the source was an honest one. He
reiterated his support for the bill. He advocated for a
sliding scale for the PFD distribution. He thanked the
committee.
10:14:57 AM
JAMES WALSH, SELF, KASILOF (via teleconference), spoke
against HB 1005. He advocated for HB 1002, the full payout
of the PFD. He did not support anything less than the full
statutory amount required by law. He thanked the committee
for taking his comments.
10:15:44 AM
DEBORAH HOLLAND, SELF, ANCHORAGE (via teleconference),
spoke against HB 1005. She read a portion from Jay
Hammonds book, Diapering the Devil:
I believe the best, perhaps the only way, to meet our
constitutional mandate to manage our natural resources
for the maximum benefit of all the people was to grant
each citizen an owners share of Alaskas resource
wealth to be used as they, not the government, felt
was for their maximum benefit. To accomplish this
objective, I propose that 50 percent of all mineral
lease bonuses, royalties, and severance taxes be
deposited into a conservatively managed investment
account each year. One half of the accounts earnings
would be dispersed among Alaskan residents, each of
whom would receive annually one share of dividend
earning stock. The other half of the earnings would be
use for essential government services.
Ms. Holland read more from Governor Hammonds book:
Our greatest challenge with the Permanent Fund and a
fiscal plan was assuring that each provides a maximum
benefit for all Alaskans, not simply a favored few at
a cost to the many. That is a hard goal to cross with
so many hands outstretched in hopes of receiving a
slice of the pie.
Ms. Holland was calling because she did not support
HB 1005. However, she supported Governor Dunleavy bills,
HB 1001 and HB 1002. She urged members to stop thinking of
the Permanent Fund as their private banking account.
10:17:42 AM
DAVID HURN, SELF, WASILLA (via teleconference), opposed
HB 1005. He supported HB 1002. He believed the citizens of
Alaska had spoken when they elected Governor Dunleavy. He
thought that legislators were not doing their jobs. He did
not approve of the Socialist propaganda surrounding the
PFD. He urged members to follow the law that was put in
place 30 years prior. He accused members of breaking the
law by stealing the PFD from Alaskans for 3 consecutive
years. He wanted to see the peoples money returned.
10:19:02 AM
PATTRICE ILLGUTH, SELF, NORTH POLE (via teleconference),
opposed HB 1005. She believed the state budget should be
reduced and that Alaskans should live on a budget too. She
thought state government should be held to the same
standard of having to live within a budget. She appreciated
the opportunity to testify.
10:19:38 AM
GARY MCDONALD, SELF, ANCHORAGE (via teleconference), did
not support HB 1005. He wanted the PFD left alone. He
encouraged the legislature to make additional cuts. He
agreed with the terminology used by a previous testifier.
He was tired of the legislature attempting to change the
dividend.
10:20:51 AM
RONALD SEAMAN, SELF, KODIAK (via teleconference), spoke in
opposition of HB 1005. He was a disabled deckhand and
Veteran. He needed a full PFD, as it helped him financially
to get through each winter. He thought if the dividend
check and the formula were to be changed, it should be done
by the vote of the people. He thanked the committee.
10:21:27 AM
THOMAS GRIFFITH, SELF, SALCHA (via teleconference), did not
support HB 1005. He had been a resident of Alaska since
1980. He, like other people had mentioned, had put his PFD
to good use. He shared that his son had put himself through
college. He was now a productive citizen in the medical
field in Anchorage. He wanted the PFD left the way the law
was written. He supported HB 1002 and wanted the formula to
stay as it was. He wanted the payout to come from the ERA
rather than the CBR. He used the PFD for building his home
and for buying car tires in the winter. He disagreed with
the notion that the PFD was a government handout. It was
not a government welfare program. It was the way the
founders dispersed Alaskas mineral wealth to the citizens
of the state. He stated it was no one's business to weigh
in on how people spent their PFDs. He was counting on the
PFD for some of his retirement income. He thought the
legislature needed to listen to its constituents. He had
voted for the governor, as did 75 percent of voters.
Alaskans wanted fiscally responsible spending in the state.
He thought the state should curtail its spending. He
thanked the committee.
10:24:51 AM
Co-Chair Wilson addressed the proposal to take $500 million
from the CBR. There was an anticipated surplus of $600
million that would go into the CBR.
10:25:19 AM
GAIL LIMBAUGH MOORE, SELF, SOLDOTNA (via teleconference),
testified in opposition to HB 1005. She fully supported
HB 1002. She wanted a full PFD payout with no future cut.
10:25:41 AM
BEN BRITTEN, SELF, FAIRBANKS (via teleconference),
testified against HB 1005 and in favor of HB 1002. He
thanked the committee.
10:26:03 AM
TANYA KITKA, SELF, KODIAK (via teleconference), strongly
opposed HB 1005. She supported HB 1002, 1003, and 1004. She
wanted to see citizens paid a full PFD and paid back the
amount taken from Alaskans over the past few years. She
also wanted the formula kept intact. She stated in the
previous year the legislature changed the statutory formula
to the 5 percent POMV formula. She asked if she was
accurate.
Co-Chair Wilson replied in the negative. She answered that
the formula remained in place and in a different section
there was a POMV draw of 5.25 percent. The two were not
connected.
Ms. Kitka appreciated the clarification. She wanted to keep
the statutory formula in place where 50 percent of the
earnings went to paying the PFD over an average of 5 years,
and the other 50 percent went to help pay for government
services. She reported that her kids had a substantial
college savings. Her 17-year old was getting ready to go
away to college and the fund would help her on her way. Her
5-year-old would not likely benefit as much. She hoped to
see the formula put into the constitution. She suggested
that if the formula was not put into the constitution it
would remain a political sticking point for years to come.
She thought the formula should be taken out of the mix of
debate. She had heard about the Supreme Court ruling.
Although it passed, she wondered if it was morally right.
There had been a significant amount of anger expressed
during public testimony. She was getting tired of having to
call in to testify. She wanted to see an end to the issue.
She appreciated the members consideration in the matter.
Co-Chair Wilson reminded testifiers that the committee
would hear further testimony at 5:00 p.m.
10:29:24 AM
PAUL RUGLOSKI, SELF, HOMER (via teleconference), testified
against HB 1005. He was tired of revisiting the issue. He
fully supported the governor and thought the legislature
should follow suit. He wanted a full PFD. He thought how
the PFD would be funded in the future was a separate
matter. He wanted the statutory formula in the constitution
leaving any changes up to the vote of the people. He
supported the position of Representative Vance and Senator
Mike Shower. He strongly encouraged the committee to follow
the governor's recommendation.
10:31:23 AM
STEPHEN DUPLANTIS, SELF, ANCHORAGE (via teleconference),
opposed HB 1005. As he understood it, the PFD was a payout
for the mineral rights on his land. Representative Johnston
had asked whether it was a sovereign right that Alaskans
receive a payout. He wondered where the government's right
was to take hold of the people's mineral rights. He thought
the point of the PFD was to give Alaskans a share of the
states resources. He mentioned property taxes were going
up in Anchorage. He thought the legislature needed to
rethink the issue. He believed the legislature should
listen to the people and encouraged additional cuts to the
state budget. He supported the governor.
10:33:42 AM
WILLIAM TOPEL, SELF, ANCHORAGE (via teleconference),
opposed HB 1005. He thought it was a bait-and-switch scheme
rather than paying a full PFD each year. He urged members
to stop their support for HB 1005 and redirect their
support to HB 1002. He thought the legislature needed to
pay a full PFD annually as authorized by Alaska law. He
referred to his previous written testimony dated March 24,
2019 for further insights as to why the continued capping
of Alaskans PFDs was more detrimental to Alaskas economy
than other forms of taxation. He asked members to vote no
on HB 1005 and yes on HB 1002.
10:35:23 AM
TERESA STORCH, SELF, KODIAK (via teleconference), spoke in
opposition to HB 1005. She thought the bill was essentially
to help bail out the oil companies for unconscionable
actions and bad business practices. She felt that the oil
companies had the State of Alaska over a barrel. She did
not support PFD cuts. She stressed that the middle class
was disappearing. She shared that the PFD was critical for
individuals raising children in rural Alaska. She thought
many people were leaving the state. She referenced
individuals considering how they were going to make it due
to cuts. She wondered if the idea was to have only wealthy
people in the state.
10:38:40 AM
ABBY ST. CLAIR, SELF, WASILLA (via teleconference), opposed
HB 1005 because it changed future statutory calculations
from 50 percent of the income available to 25 percent as
written in Section 4 of the bill. She shared that many
Alaskans were on a fixed income and relied on the PFD. She
asked for the removal of Section 4 to keep the formula at
50 percent.
10:40:02 AM
JENNIE KATCHATAG, SELF, UNALAKEET (via teleconference),
testified in opposition of B 1005. She supported a full
PFD. She thought the legislature should put the people
first. She supported HB 1002. She thought the legislature
was trying to steal money from future generations.
10:41:28 AM
DIANE MACRAE, SELF, ANCHORAGE (via teleconference), opposed
HB 1005. She supported HB 1002. She thought the legislature
wanted to take money from the PFD to cover increased state
spending. She shared personal information about medical
costs. She supported the governor and wanted to cut the
waste. She often spent the PFD on her husband's medical
needs. She did not support socialized medicine. She wanted
a smaller, respectful government. She supported putting the
PFD formula in the constitution.
10:44:28 AM
ANNA WALTERS, SELF, ANCHORAGE (via teleconference),
testified in opposition to HB 1005. The Permanent Fund
Dividend was used for things like fuel to enable hunting
for food. She was against the proposed change to the
formula. She thanked members for the chance to provide her
testimony.
10:45:27 AM
GARET ABBOT, SELF, KETCHIKAN (via teleconference), did not
support the legislation. He believed a cap on the PFD was
essentially a regressive and unfair tax on Alaskans. He was
opposed to the proposed statutory changes to the dividend
formula. He urged the legislature to fully restore the PFD
and sever the PFD from the state budget process altogether.
10:46:54 AM
AMONTE WALLACE, SELF, ANCHORAGE (via teleconference),
testified against HB 1005. She had been a resident of
Alaska since 1980. She spoke to the effectiveness of the
PFD formula in use for over 40 years. She supported
HB 1002. She supported the governor and wanted a full PFD.
She encouraged the legislature to cut the budget and avoid
another special session. She urged members to support
HB 1002.
10:48:27 AM
FRANCES BENNETT, SELF, ANCHORAGE (via teleconference), did
not support the bill. She thought the legislature should
start making the hard decisions about cutting programs. She
was aware the choices would be difficult but necessary. She
noted the legislature had spent $14 billion from the CBR in
the last number of years and believed it was time to make
the tough decisions. She thanked the committee.
10:49:59 AM
LORRAINE ERGNATY, SELF, WASILLA (via teleconference),
opposed HB 1005 and supported HB 1002. She had children
with college loans that needed to be paid. She hoped the
legislature would do the right thing.
10:50:51 AM
GORDON JOHNSON, SELF, JUNEAU (via teleconference), spoke in
opposition of HB 1005. He supported HB 1002. He voted for
Governor Dunleavy to protect the PFD and to enact fiscal
responsibility.
10:51:31 AM
MAYNARD WILLBURN, SELF, CRAIG (via teleconference),
testified against HB 1005. He thought the bill would allow
the legislature to overfund the budget. He supported
HB 1002, HB 1003, and HB 1004 - bills that would protect
the Permanent Fund. He supported the governor and his
effort to maintain a full PFD payout. He asked about the
actions of Governor Walker around the PFD.
Co-Chair Wilson replied that in the first two years the
money that had not been paid out was kept in the ERA and in
the third year it had been spent on government services.
Mr. Willburn continued that he wanted the Permanent Fund
protected. He thanked the committee.
10:54:42 AM
SALLY JOHNSON, SELF, PALMER (via teleconference), opposed
HB 1005. She thought it was not for legislators to be
considering. She stressed it was the people's money. She
supported cuts to the budget, not the PFD. She supported
protecting the PFD in the constitution. She supported
HB 1002. She did not like having to call over and over to
testify on the same point. She thought there was a
significant amount of government waste.
10:55:54 AM
TIMOTHY INGRAHAM, SELF, NORTH POLE (via teleconference),
was against the bill. He wanted a full PFD. He did not
support putting money into the hands of the legislature. He
strongly supported HB 1002.
10:57:30 AM
ANTOINETTE BRADLEY, SELF, WASILLA (via teleconference),
opposed the legislation. She did not support any bill that
would steal from Alaskans. She supported cuts to the budget
and thought the legislature had wasted millions of dollars.
She did not believe the legislature was listening to the
people. She did not trust the legislature. She asked the
legislature to restore the PFD that had been stolen by the
former administration. She thought the legislature was
wasting the public's time.
10:59:03 AM
DARYL SCHIERHOLT, SELF, WASILLA (via teleconference),
opposed HB 1005. He wanted the PFD left alone. He urged
members to support the governor. He asked the legislature
to do its job and cut the budget. He did not appreciate
having to call in multiple times on the same issue.
11:00:06 AM
LLOYD DAN HOLLINGSWORTH, SELF, ANCHORAGE (via
teleconference), spoke against HB 1005. However, he
supported HB 1002. He thought the legislature should learn
how to run a business and become familiar with the concept
of not spending money it did not have. He provided an
example of excessive spending a sewer project in Ugashik
that served only 12 people requiring regular maintenance.
He did not think a sewer system for 12 people was
necessary. He reiterated his opposition to HB 1005. He
urged members to spend money wisely.
11:01:29 AM
EDWARD BIAS, SELF, PALMER (via teleconference), did not
support HB 1005. He indicated Alaskans voted for Mike
Dunleavy for a reason. He was in full support of HB 1002.
11:02:18 AM
KELLEY CIZEK, SELF, SOLDOTNA (via teleconference), opposed
HB 1005. She asked when the public could call in to testify
on HB 1002.
Co-Chair Wilson clarified that HB 1002 was not currently
before the House Finance Committee. The bill was currently
before the House State Affairs Committee.
Ms. Cizek asked when the bill would be heard in the House
Finance committee.
Co-Chair Wilson replied that once the House Finance
Committee received the bill a hearing would be noticed.
Ms. Cizek asked if the current bill had gone before other
committees.
Co-Chair Wilson responded that the Speaker of the House
assigned committees for each bill. She invited Ms. Cizek to
offer her testimony on HB 1005.
Ms. Cizek was opposed to HB 1005. She did not appreciate
having to call in multiple times on the same issue. She
thought the session allowed the legislature to circumvent
the normal process. She thought the current process was
sneaky. She did not have confidence the legislature would
vote the way the people wanted. She thought they were
trying to take Alaskans money by taking their PFDs. She
reiterated her frustration with having to be on hold for
more than 1.5 hours.
11:06:00 AM
VIKKI JO KENNEDY, SELF, JUNEAU, did not support funding the
Alaska Aerospace Corporation. She did not support taking
money from the PFD. She was opposed to HB 1005. She fully
supported Representative Vance's legislation [HB 1002]. She
urged members to get their job done and to protect the
people's PFDs.
11:08:46 AM
Co-Chair Wilson clarified that the Alaska Aerospace
Corporation did not have any funding in the current budget.
Ms. Kennedy thought it was on page 25 of HB 39.
11:09:19 AM
GREG COLLINS, SELF, HOMER (via teleconference), voiced his
strong opposition to HB 1005. He believed members of the
legislature thought they knew how to spend his money better
than he did. He was a small business person. He spoke of
the benefits to the economy resulting from the PFD. Many
people benefited from receiving their PFD. He advocated
that Alaskans should be allowed to spend their money as
they saw fit. He strongly opposed HB 1005.
11:11:14 AM
JAMES GENTRY, SELF, ANCHORAGE (via teleconference), opposed
HB 1005. He was a disabled Veteran and really counted on
his PFD check every year. He supported HB 1002 and wanted
to see the original formula placed into the Alaska
Constitution. He did not appreciate having to be on hold
for so long. He urged members to leave the PFD alone and to
cut the budget.
11:12:11 AM
COLIWITICHEC GENTRY, SELF, ANCHORAGE (via teleconference),
spoke in opposition to HB 1005. She supported Governor
Dunleavy. She wanted the PFD formula placed into the Alaska
Constitution so that legislators could not make changes to
it without the voice of the people.
11:13:09 AM
KIMBERLY CLARK-THIRY, SELF, ANCHOR POINT (via
teleconference), was strongly against HB 1005. She was
tired of having to call in to testify on the issue. She did
not support taking the PFD away from the people and using
it to fund the government budget. It was her understanding
that the PFD was not part of the budget. She asked what
would happen when the PFD was gone. She stressed that the
people were tired of representatives ignoring what they
were saying. She asked the legislature to do the will of
the people and pay a full PFD. She also wanted the
legislature to pay back past PFDs and to place the formula
into the constitution. She urged members to get government
spending under control. She reiterated her opposition to
HB 1005, her support for HB 1002, and her support for
Governor Dunleavy.
11:16:12 AM
CORBIN ARNO, SELF, HOMER (via teleconference), testified
against HB 1005. He thought state spending needed to get
under control before the legislature started stealing
people's money. He thought it was the time for the state to
live within its means. He stated that the PFD money was not
for the legislature to spend. He thought it was the
people's money. He hoped the legislature listened to the
people of Alaska.
11:17:30 AM
LYNN LOWREY, SELF, WASILLA (via teleconference), reported
that it was her third time testifying on the issue. She was
opposed to any change to the PFD. She strongly opposed
HB 1005, as she saw it as a bait-and-switch piece of
legislation. She stated it was expensive to live in Alaska
and the PFD gave people extra help. She needed the money to
live. She supported the governor and HB 1002. She wanted
the legislature to do right by the Alaskan people - to
restore the people's PFDs.
11:19:34 AM
BILL IVERSON, SELF, SOLDOTNA (via teleconference), spoke in
opposition of HB 1005. He noted his support for HB 1002. He
did not want to have to call in again to testify in support
of HB 1002. He suggested that the economy had been
significantly hurt by the theft of the PFD to the Alaskan
economy. He hoped to see the legislature take fiscal
responsibility and to get its house in order. He thanked
the committee.
11:20:35 AM
VIVIAN SWANSON, SELF, SOLDOTNA (via teleconference), spoke
in opposition to HB 1005. She was a retired citizen and was
receiving Social Security monies. She depended on her PFD
each year. She did not want any changes made to the PFD
without a vote of the people. She wanted to receive a full
PFD currently and in years to come. She voted for Governor
Dunleavy because she believed he would help save the
Permanent Fund.
11:21:44 AM
WILLIAM BROWN, SELF, WASILLA (via teleconference), opposed
HB 1005. He was a business owner. Every year he witnessed
the legislature taking the people's PFDs. He asked the
committee to stop trying to take Alaskan's PFDs. He urged
members to shrink the budget.
11:22:59 AM
FAYE SARREN, SELF, ANCHORAGE (via teleconference), spoke
against HB 1005. She voted for Governor Dunleavy because
she trusted him, unlike the legislature. She did not think
he would take money from Alaskans. She implored the
legislature to quit trying to take the people's money away
from them.
11:24:25 AM
MICHAEL DUKES, SELF, WASILLA (via teleconference), opposed
HB 1005. He supported HB 1002 that he believed had been
buried by the House Majority. He believed part of the
problem was that the legislature had an addiction to
spending. He noted the $14 billion that was spent over 4
years from the CBR. He argued that state spending was
unsustainable. He disagreed with the inference of either a
PFD or a tax, or a PFD or the government - he believed it
was a false choice. He thought taking the PFD in the
previous 3 years had been a tax on every Alaskan. The
Alaskans that felt the effects of the reductions the most
were the ones in the lowest 50 percentile of the income
bracket. He noted that every year the legislature had taken
the dividend, 8 percent of Alaskans had been pushed below
the poverty line. He thought the actions were unforgivable
and unsustainable - continuing to bulk up government on the
backs of some of the lowest income earners in Alaska.
Currently, the government already received the lion's share
of all of the money. State government already received 75
percent of all oil royalties and 100 percent of corporate
taxes and property taxes. The state also took half of the
remaining 25 percent of royalties that were invested. The
proposal in HB 1005 would take another half of the 25
percent of investment earnings. He wondered how much was
enough. He wondered if it would be when the entire PFD was
gone. He believed eventually the state would take all of
the PFD monies and then impose taxes as well.
Mr. Dukes reiterated that he thought state government had
an addiction to spending. There was a danger in the CBR
draw posed in the bill. It lent more credence to the fact
that the dividend was nothing more than a government
payout. The amounts of the previous PFDs were in the ERA.
He argued that the payments belonged in the hands of
Alaskans. There was a source of funding for the PFD in the
current year. He also asked about what happened with the
bill containing contingency language. He thought it was a
problem to have a contingency, changing the formula, as a
condition of passing the bill. He asserted that the
legislature needed to follow the law. He argued that there
was already a statute in place and believed HB 1002 was not
needed. If there were to be a change in the PFD formula, he
suggested letting the change occur during a regular session
when the people of Alaska could properly weigh in. He also
believed an advisory vote of the people was necessary. He
believed about 80 percent of Alaskans would oppose a change
to the formula, similar to a previous advisory vote taken
in 1999.
11:28:11 AM
DEBRA KUSE, SELF, WASILLA (via teleconference), spoke in
opposition to HB 1005. She supported the governor and
Representative David Eastman. She wanted to see the
legislature stay on budget. She did not believe government
should be touching money that did not belong to it. She was
disappointed there had been no special session in Palmer or
Wasilla. She was part of the working poor who could not
make it to Juneau during session. She believed elections
belonged to the people. She was disappointed that she had
to call in to testify. She quoted Abraham Lincoln who
stated that elections belonged to the people. She wanted
the legislature to let the people decide.
11:30:55 AM
DEAN CAMERY, SELF, EAGLE RIVER (via teleconference), was
opposed to HB 1005. He was very disappointed with the House
of Representatives. He argued that legislators were not
elected to join coalitions. Since the House coalition was
formed members had been trying to govern against the will
of the people. He was one of the 146,000 people that voted
for Governor Dunleavy to get the state's fiscal house in
order and to get the Permanent Fund out of the hands of the
legislature. He wanted legislators' greedy paws off of
money belonging to Alaskans. He believed a close door
session in which members examined their conscience and to
do what was right for the State of Alaska. He restated his
opposition to HB 1005.
11:32:46 AM
BARBARA BAUGHN-BOOKEY, SELF, KENAI (via teleconference),
was opposed to HB 1005. She voted for Governor Dunleavy.
She expected the budget to be reduced and the PFD not to be
touched. She expected a full payout including the prior
years that were taken from Alaskans. It would allow people
to stay afloat. She noted some good uses of the PFD. the
PFD allowed her to put appropriate tires on her car for the
winter and other essential things. She mentioned that she
had seen many people leave the state. She thought the state
was a difficult state to live in. The Permanent Fund
Dividend helped to subsidize the cost of living in Alaska.
She supported HB 1002, HB 1003, and HB 1004.
11:35:06 AM
SHARON GHERMAN, SELF, SOLDOTNA (via teleconference),
strongly opposed HB 1005. She was aware of what the
intention of the PFD was because she had spoken with
Governor Hammond years prior who had told her that the
legislature would spend, and the PFD would disappear unless
the people of Alaska controlled it. Alaska was the only
state that provided ownership of income from its natural
resources. She supported Governor Dunleavy because of his
plan to refund the PFD monies previously stolen from
Alaskans. She also believed the formula should be placed
into the Alaska Constitution. She did not think the
legislature had the right to take the dividend away from
the people. She advocated for a balanced budget and
additional cuts. The issue was not about whether citizens
needed the PFD money more than state government. It had to
do with whether the legislature had the right to take the
PFD. She opined that the legislature did not have a legal
or moral right to do so. She expected the legislature to
honor the will of Alaska's people.
11:36:52 AM
BILL PRICE, SELF, WASILLA (via teleconference), was against
HB 1005. He thought the legislature was taking from the
people. He reasoned that taking the PFD was a tax, although
the legislature was pretending that it was not. He argued
that the PFD was not a socialist payment. He thought the
legislature was not willing to cut. He believed taking the
PFD was dishonest. He hoped the legislature was listening
to the public.
11:40:16 AM
CLEM TILLION, CHAIR, PFD DEFENDERS, HALIBUT COVE (via
teleconference), shared that he was the Senate President
when the Permanent Fund was established. He recalled having
to get the troopers to bring 2 state senators in handcuffs
to the floor to get the legislation passed. There was a law
in place that the legislature has been afraid to change. He
wished the legislature would obey the law and pay the PFD.
He agreed that any raid on the Permanent Fund was a tax. He
thought it was unfair to take $1000 away from a woman in
Emmonak and not charge a guy that comes up to fish or work
on the North Slope. He asked the legislature to obey the
law. He opined that the legislature was wasting 75 percent
of the bonuses and royalties that should be treated as
principle and invested. He argued that the legislature
should never spend principle monies, only monies from the
ERA. He relayed that the 25 percent that was set aside for
the people did not go into the general fund, rather, it
went to the Alaska Permanent Fund Corporation (APFC). He
closed his testimony by saying, "Just obey the law."
11:41:57 AM
JOSEPH WARD, SELF, PALMER (via teleconference), opposed HB
1005. He was a third generation Alaskan. He supported a
full PFD. He shared personal information about his child's
mental illness. He spoke of how the PFD would help him with
basic needs. He indicated the extra income was needed to
sustain the Alaska way of life. It was becoming more
difficult to hunt and fish which helped to offset income.
He spoke of the high costs associated with getting food in
Alaska. He believed that if the formula were to be changed,
Alaskans should get to weigh in and vote on the issue.
11:44:05 AM
DAVID WITT, SELF, PALMER (via teleconference), spoke in
opposition of HB 1005. He encouraged legislators to follow
the will of the people. He spoke of an issue around Social
Security which he thought was similar to Governor Walker
not paying a full dividend. He relayed that HB 1002 was
buried in committee because the House Speaker had not
wanted to advance the legislation. He thought the
legislature's party politics were despicable. He believed
the legislature was not listening to the people. He
implored the legislature to do the will of the people and
to provide a full PFD. He opined that the bipartisan
coalition was thwarting what Governor Dunleavy was trying
to do. He asked members to stop playing partisan politics.
11:49:14 AM
MORMA HARRISON-DAVIS, SELF, PALMER (via teleconference),
testified against HB 1005. She did not believe much thought
had gone into the bill. She explained that because of the
current climate of the oil industry oil prices could shoot
up to $150 per barrel significantly changing the state's
revenue. She did not want the state to be stuck with a bill
that took half of the people's money and gave it to the
legislature to spend. giving the legislature more money to
spend. She was in favor of the existing formula. She stated
the money was not the issue. She thought the legislature
did not have the right to make changes to the formula or
the PFD. She believed the issue needed to be voted on by
the people of Alaska. She was disappointed that more
thought had not gone into the bill.
Co-Chair Wilson replied that the bill would change the
current formula. There was nothing that stated that the
issue could not go to the people for a vote. The
legislature did not have any constitutional amendments on
the agenda for the special session.
Ms. Harrison-Davis asked about the 50 percent in the future
as laid out in the bill. She wondered if anything would be
allowed if the price of oil went up drastically.
Co-Chair Wilson replied that there would be a guarantee in
statute. There would be nothing stopping the legislature
from doing what Governor Palin did when she gave a
supplemental PFD.
Ms. Harrison-Davis clarified that she was not talking about
a supplemental, but rather the bill itself.
Co-Chair Wilson explained that it would change the statute.
It would take the passage of another bill for it to happen.
Ms. Harrison-Davis did not believe the process had been
thought through. She disagreed with the bill. She supported
the original intent of the formula. She stated that if the
legislature could not make cuts it needed to implement a
tax.
11:53:22 AM
GEORGE PIERCE, SELF, KASILOF (via teleconference), opposed
HB 1005. He thought the cuts were on the people. He wanted
the legislature to leave the PFD alone. He disagreed with
paying the oil companies $1.2 billion in subsidies while
the legislature could not payout the dividend. He advised
members to leave the PFD alone. He urged them to do their
job in representing Alaskans. He asked the legislature to
recoup Alaska's fair share of oil. He argued that the PFD
need protection for legislators. Although he did not vote
for Governor Dunleavy, he supported his cuts. He did not
believe the legislature had cut deeply enough. He thought
the legislature was exercising wasteful spending.
11:56:22 AM
RAYMOND HILL, SELF, ANCHORAGE (via teleconference), spoke
against HB 1005. He spoke of the high cost of living in
Alaska and the help the PFD provided for he and his wife
each year. He thought the government kept creating
additional programs which expanded the state's budget. He
stressed the importance of the state not spending beyond
its means. It was not possible to spend beyond the state's
means. He suggested going to the Native corporations for
additional monies. He reiterated the importance of the PFD
to him personally. He supported Governor Dunleavy and
thought the PFD needed to be restored and left alone. He
thanked members for their time.
11:59:39 AM
NANCY HILL, SELF, ANCHORAGE (via teleconference), was
opposed to HB 1005. She highlighted the use of the word
"permanent." She wanted a full restoration of the PFD.
12:00:19 PM
LYNDA MYERS, SELF, ANCHORAGE (via teleconference), spoke in
opposition to HB 1005. She supported the governor. She did
not support the legislature stealing money from the people.
She advocated exercising her opinion in the ballot box. She
had been waiting to testify for more than 2 hours. She
echoed the statements by past callers. She supported the
idea of the public being paid back for the PFD money they
were not paid over the previous few years. She thought the
state favored oil companies. She encouraged people to stand
up to legislators running for office. She spoke of a PFD
issue her family experienced. She encouraged members to
listen to the people.
Co-Chair Wilson indicated the committee would be
reconvening at 5:00 P.M. to continue with public testimony.
The meeting was RECESSED to the Call of the Chair.
12:04:28 PM
RECESSED
4:59:33 PM
RECONVENED
Co-Chair Wilson indicated that there had been some
misinformation floating around. She clarified that the bill
provided a full dividend of $3000 and proposed a change to
the dividend formula in future years. In crafting the
legislation, she started by using the prior dividend. She
would continue to work on the bill in committee and
provided a time to hear amendments. She reported that the
administration had reached out and was not providing
accurate information to her constituents. She reiterated
the intent of the bill and suggested that sometimes the
process was difficult. She thanked Alaskans for all of
their input, as it was important to hear it.
5:01:37 PM
DR. DIANA CHADWELL, SELF, DELTA JUNCTION (via
teleconference), spoke in opposition of HB 1005. She
stressed the importance of putting the issue to a vote of
the people. She asserted that Governor Walker stole money
from Alaskans and should be responsible for reimbursing
them. She mentioned people on Social Security Disability.
She also noted a 50/50 rule. She thought the PFD was
established by very wise men who had passed on. There were
fines and penalties for people who broke the law. She
expected the legislature to hold a person responsible for
their actions. She urged members not to pass HB 1005. She
referred to the original founding documentation of the PFD.
5:04:31 PM
PATRICK SCHLICTING, SELF, DELTA JUNCTION (via
teleconference), spoke in favor of HB 1005. He had lived
through the previous 3 years of reductions to the PFD
payout. He could not believe he lived in a state that did
not require or impose an income tax or another broad-based
tax. The money that was part of the reduced dividend was an
investment in state services in lieu of taxes. He was
astounded at the governor's proposed budget. He suggested
that Governor Dunleavy bought the election by pledging to
give money that was not his to give. He suggested reducing
the percentage for dividends to 20 percent. He was okay
with the legislature paying out reduced dividends in the
current year using the new formula specified in the bill.
He thought the amount would remain generous.
5:06:43 PM
GARVAN BUCARIA, SELF, WASILLA (via teleconference), spoke
in opposition to HB 1005. He supported the original
formulation for the calculation of the PFD. Any changes to
the disposition of the PFD should be subject to a public
referendum. He noted in Section 4(a) of the bill that the
legislature wanted to spend an additional quarter of dollar
transfers from the Permanent Fund Earnings Reserve that was
available for distribution. He suggested the legislature
should be satisfied with the current split - Alaska
government versus Alaska residents. He thought the House's
inability to get business done early in the session showed
its unwillingness to be conservative relative to spending
the Alaska Permanent Fund and oil revenues.
Co-Chair Wilson asked if Mr. Bucaria would be satisfied
with a referendum.
Mr. Bucaria responded that a referendum would give people a
chance to see what was going on. He found that the bill was
confusing to understand and that a referendum might provide
additional clarity.
5:08:48 PM
WILLIAM KENYON, SELF, CORDOVA (via teleconference), spoke
in support of HB 1005. He appreciated participating in the
decision of how Alaska should use the Prudhoe Bay lease
money. The whole state participated in thinking about the
future of Alaska. He relayed that when the Permanent Fund
was created it was about future generations. The purpose of
the dividend was to keep the Permanent Fund safe for future
generations. The fund was for use when needed, not wasted
on grain storage towers in Valdez.
5:09:48 PM
LIZ SENEAR, SELF, CORDOVA (via teleconference), supported
HB 1005. She did not support eviscerating the state budget
or state services. She also did not support a $3000
dividend or maintaining a reasonable level of services and
taking extra money from the ERA to maintain a $3000
dividend. She thought the bill was a reasonable approach
and kept the dividend on the high side with some
reliability. She agreed with the bill based on the state's
current situation.
5:11:00 PM
HERMAN MORGAN, SELF, ANIAK (via teleconference), opposed HB
1005. He believed people getting less of a dividend by
changing the formula would allow more spending for
education and the University. He did not think his
community was getting its money's worth. He opined that all
the money the state spent on Medicaid could send it into
bankruptcy. He was glad the committee was hearing public
testimony. He suggested the residency requirement to
qualify to receive a PFD should be 2 years, as he had
concerns about the United States protecting its border. He
noted having to keep the liquor store open to pay for the
swimming pool in Bethel. He advocated cutting government
spending. He talked about bad things happening in the
villages. He asked members to give back the people's
dividend. He thought it was sad that unqualified teachers
were in the classrooms in the villages. Children were not
getting a proper education. He urged members to listen to
the public. He indicated that listening to the people would
build trust. He disagreed with changing how the dividend
was paid out. He urged taking money out of the ERA and
placing it into the corpus of the Permanent Fund.
5:17:01 PM
ELIZABETH HOLM, SELF, NORTH POLE (via teleconference),
understood that HB 1005 would put the state back on a path
to receiving full PFDs in the future which she supported.
However, the bill did not repay Alaskans' money taken from
the Walker Administration used to grow government. She
advocated for additional cuts to the budget to amend the
mistakes of the previous administration. She spoke of
Alaskans that were willing to give up their PFDs and were
willing to be taxed. She suggested that they use the
Pick. Click. Give. option if they wanted to support state
government further. She spoke in support of HB 1002 which
included a full PFD payment and back payments taken from
the people. She wanted to see additional cuts to education,
particularly to charter schools. She urged members to vote
in favor of the repayment of past dividends.
5:18:54 PM
KIM SHORT, SELF, HOUSTON (via teleconference), opposed
HB 1005. She thought it was an unfair bill. She believed
other things should be cut rather than the dividend such as
legislators' salaries. She wanted to see the residence
requirement for receiving a PFD expanded to 5 years. She
opposed cutting future dividends in half. She thought state
government should tighten its belt rather than taking money
from Alaskans. She wanted to see a vote of the people
initiated.
5:20:41 PM
LESLIE HVAMSTAD, SELF, HOUSTON (via teleconference),
opposed HB 1005 and any changes to the PFD. She thought
state government had been wasteful. She believed cutting
the PFD would be thievery.
5:21:42 PM
WILLIAMS LAMBERT, SELF, NORTH POLE (via teleconference),
spoke against HB 1005. He did not support making any
changes to the dividend. He wanted to see the repayment of
dividends plus interest. He advocated any changes to the
dividend or formula be put to a vote of the people. He
advocated for the legislative session to be held on the
road system. He asserted that HB 1005 was the worst idea
that he had ever heard. He wanted to see the dividend
embedded in the constitution and out of the hands of the
legislature. He spoke of peoples' vehicles being broken
into. He thought the legislature was too protected. He
reiterated his support for the repayment of past dividends.
He strongly opposed HB 1005.
5:26:04 PM
CAROLYN PORTER, SELF, PALMER (via teleconference), did not
support HB 1005. She spoke about how critical the PFD was
in certain areas of Alaska. She mentioned that many
families relied on the dividend to heat their homes and pay
for food. She provided several other ways in which families
utilized the PFD. She urged support for HB 1002, HB 1003,
and HB 1004. She opposed HB 1005.
5:28:17 PM
CHRISTINE ROBBINS, SELF, FAIRBANKS (via teleconference),
strongly opposed HB 1005. She thought it was wrong to think
the government knew better how to spend the peoples' money.
She believed it was impossible to have a sustainable budget
without making reductions. She noted the small size of
Alaska's population and the large size of government. She
opposed HB 1005. She supported HB 1002, HB 1003, and HB
1004.
5:30:12 PM
MIKE PRAX, SELF, FAIRBANKS (via teleconference), adamantly
opposed HB 1005. He objected to Section 1 of the bill where
the legislature was violating the statute by drawing less
than the prescribed amount from the ERA. In Section 2(b)
the legislature should not be taking money from the CBR, as
the CBR was not intended to pay dividends. Rather, the CBR
was intended for operating expenses. There was plenty of
funds in the ERA from which the dividend should be taken.
He was especially opposed to Section 4. He disagreed with
the contingency language accepting a reduction of the
dividend in the future. He considered the language a bribe.
He could appreciate that there was some misinformation out
in the public. However, he argued that the legislature was
springing the information on Alaskans with very little to
figure out the bill. He noted that the governor had
submitted a bill in plenty of time to vet the information.
However, the legislature failed to take action on it. He
highlighted that for anyone that did not want to receive a
dividend they were free to give their check back to the
state. He reiterated his strong opposition to HB 1005. He
supported HB 1002, HB 1003, and HB 1004. He wanted to take
as much money as possible away from state government. He
asserted that it was the only way to get control of the
state's fiscal situation.
Co-Chair Wilson noted that with the contingency language
there would be an additional bill before the committee.
5:33:02 PM
SALLY FOLY, SELF, ANCHORAGE (via teleconference), spoke in
strong opposition of HB 1005. She thought legislators
believed they were untouchable. She relied on the PFD to
provide clothing for her children every year. She
reiterated her opposition to the bill.
5:34:15 PM
KATHY MILLER, SELF, KENAI (via teleconference), was
adamantly opposed to HB 1005. She thought Alaska had done
just fine with the way the formula had worked. She urged
additional cuts to the budget and to leave the PFD alone.
She mentioned having a large family and having needed the
extra money from the PFD. She encouraged members to return
the past dividends that were withheld.
5:36:14 PM
ADAM CARDWELL, SELF, WILLOW (via teleconference), strongly
opposed HB 1005. He commented on the unnecessary special
sessions that occurred every year. He advocated getting rid
of government waste. He thought oil companies should be
charged a larger royalty. He hoped the legislature would
leave the PFD alone and act responsibly.
5:38:18 PM
CHUCK DERRICK, SELF, FAIRBANKS (via teleconference), spoke
in opposition to HB 1005. He wanted to be reimbursed for
what was taken from him. He urged legislators to reduce its
spending and balance the budget. He wanted the original PFD
formula to stay in place.
5:39:44 PM
JOHN RATHBUN, SELF, FAIRBANKS (via teleconference), spoke
in favor of supporting the PFD. He thought HB 1005 was a
poor excuse for what needed to be done - balancing the
state budget. He asserted that Alaskans had been robbed of
their royalty share. He was disappointed with the current
legislature. He opposed HB 1005. He posed the question
about how members would react if their money was taken. He
thought it was time for the state to balance its budget.
5:42:50 PM
MARK A. AMES, SELF, FAIRBANKS (via teleconference), spoke
in opposition of HB 1005. He talked about 90-10 mining
claims and mentioned ANCSA [Alaska Native Claims Settlement
Act] and ANILCA [Alaska National Interest Lands
Conservation Act]. He thought a criminal investigation
should be opened. He strongly opposed HB 1005. All Alaskans
needed to pull their kids from public education. He
continued to talk about the poor quality of education in
the state.
5:46:50 PM
DIXIE BANNER, SELF, WASILLA (via teleconference), spoke in
opposition of HB 1005. She reminded members that
legislators were employees. She argued that the legislature
had not listened to the public. She thought Alaskans had
the right to have input on how the Permanent Fund should be
spent. She thought the Alaskan people were smarter than
legislators. She wanted to ensure the future of Alaska was
protected. She wanted to protect the young people of
Alaska. She thought it was sad to think that Alaska did not
have a future. Her grandchildren had left the state because
opportunities were lacking. She reiterated that a
legislator was an employee rather than an employer.
5:49:33 PM
VALERIE NABINGER, SELF, ANCHORAGE (via teleconference),
opposed HB 1005. She believed any changes to the PFD
formula should be put to a vote of the people. She thanked
the committee.
5:50:22 PM
TINA MINSTER, SELF, STERLING (via teleconference), was
whole heartedly against HB 1005. She mentioned Governor
Walker taking money from Alaskans. She suggested that the
legislation was sneaky. She supported Governor Dunleavy.
She and her family members had to tighten their budgets and
the state should as well. She argued that the State of
Alaska had no more money to spend. She reiterated her
opposition for HB 1005. She favored a vote of the people.
She spoke of her church feeding families to help them make
it through difficult times.
5:53:49 PM
ROBERT HEATHERINGTON, SELF, FAIRBANKS (via teleconference),
spoke in opposition to HB 1005. He felt the legislature
should not touch the money of the people of Alaska. He
talked about how expensive it was to heat his home in the
wintertime. He talked about the difficulties for elders. He
agreed with many of the previous testifiers about what the
Alaskan people wanted. The people voted for Governor
Dunleavy and a full PFD. He urged members to do what was
right for the people of Alaska.
5:56:27 PM
ERIC KNOWLTON, SELF, WASILLA (via teleconference), spoke of
having had a stroke a few years back. He had had heating
assistance taken from him along with his PFD. He urged
members to repay the PFDs and wanted a full PFD in the
current year. He opposed HB 1005.
5:57:31 PM
MONIQUE DUNCAN, SELF, NORTH POLE (via teleconference),
advocated a vote of the people rather than through a bill.
She advocated many ways to reduce the budget. She was a
disabled person that utilized the PFD. She thought it was
outrageous that the legislature was focusing the discussion
around the PFD. Although she could afford to give up her
PFD, there were several people that relied on it. She
opposed HB 1005.
6:00:42 PM
ERVIN MALCUIT, SELF, WASILLA (via teleconference), opposed
HB 1005. He thought the Permanent Fund should be
untouchable and should be kept as-is. He also believed the
past payments that were withheld should be reimbursed to
the people of Alaska.
6:02:00 PM
MARCY SOWERS, SELF, WASILLA (via teleconference), opposed
HB 1005. She opposed any changes to the distribution of the
Permanent Fund or the calculation. She advocated protecting
the PFD in the constitution. She thought the issue should
go to a vote of the people. The Permanent Fund was
established as a trust fund for the people of Alaska - not
for the purpose of paying for government. She suggested
that for the people who testified that they did not want
their PFDs they could use Pick. Click. Give. She also
argued for the repayment of the PFDs from past 3 years. She
asserted that legislators had been derelict of their duty
to protect the fund, statutes, and the people of Alaska.
The state had consistently failed to live within its means.
There were several households that relied on their PFDs.
She agreed with other testifiers regarding the raiding of
payments to the people. She urged protecting the current
formula. She suggested that public trust had been eroded.
She thought the legislature had not done its job. She noted
that the people voted for a Republican House Majority and
for Governor Dunleavy. She strongly opposed HB 1005.
6:05:46 PM
EMILY FLORIAN, SELF, WASILLA (via teleconference), did not
support HB 1005. She argued that there should not be any
changes made to the PFD without a vote of the people. She
supported paying the PFD and making additional budget cuts.
She suggested designing the budget as a business would -
staying within its budget and without imposing taxes.
6:06:42 PM
CHARLES LESTER, SELF, DELTA JUNCTION (via teleconference),
spoke against HB 1005. He hoped the members understood what
the people wanted, based on all of the testimony provided.
He wanted to see the PFD left as-is. He also thought
legislators needed to work together. He thought the
legislative session had turned into a fiasco. He mentioned
his children using their PFDs for education. He did not
think elected officials had been good stewards of the
peoples' money. He did not believe giving the legislature
additional monies would help. He encouraged a vote of the
people. He asked members to get their ducks in a row and to
do what was right.
6:09:06 PM
PATRICK MARTIN, SELF, WASILLA (via teleconference), spoke
in opposition of HB 1005. He thought the legislature had
acted in opposition to the will of the people. He believed
Governor Walker had raided the Permanent Fund. He argued
against wasteful spending by government officials. He
supported putting a vote to the people of Alaska.
6:11:03 PM
LORNA MCANINCH, SELF, ANCHORAGE (via teleconference),
opposed HB 1005. She wanted to see the PFD protected for
future generations. She thought the PFD should be paid in
full following statute that had been in place for decades.
She believed the PFD should be protected in the
constitution. She mentioned 2 bills introduced by Governor
Dunleavy for the PFD back pay owed to Alaskans. She
advocated for the legislature to act on the bills swiftly.
She believed that every penny owed for the PFDs was sitting
in the ERA and was available for distribution. She thought
the PFD cuts were a wrongful tax. She argued that the PFDs
were the peoples' rightful share of resource wealth. She
did not want to see HB 1005 implemented. Rather, she
thought it was time to put the PFD in the constitution.
6:12:28 PM
SANDRA DELONG, SELF, JUNEAU (via teleconference), did not
submit a PFD application because she was concerned that the
state did not have enough money to operate. She favored an
income tax and advocated for an increase to the gasoline
tax. She talked about people who came up from other states
to earn a living but who did not leave anything in the
state. She was concerned about people who relied on
Medicaid, the Pioneer Homes, the Alaska Marine Highway
System, and education funding. She thought there would be
nothing left to attract people to Alaska. She did not feel
the budget was the only thing to look at. She also thought
there were too many free rides.
6:15:16 PM
ANTHONY BAIOCCHI, SELF, WASILLA (via teleconference),
opposed HB 1005. He thought the Alaska Legislature had been
on a spending jag since 2006. He thought state government
should return to the spending levels of 2006 and adjusted
for inflation. He wanted to see Alaska get its fiscal house
in order.
6:16:23 PM
MARIE CULP-WASHBURN, SELF, KENAI (via teleconference),
spoke in opposition of HB 1005. She argued that the
original PFD formula had worked for many years. The
dividend was a way to pay Alaskans for their mineral
rights. She wanted to see the PFD formula put into the
Alaska Constitution so that no one could get their fingers
on it again.
6:17:56 PM
TROY SCOTT, SELF, ANCHORAGE (via teleconference), was
opposed to HB 1005. He believed the PFD was set up for a
reason. He had been in the state since 1984. He argued that
the PFD monies should not have been tapped for any reason
without a vote of the people. He advocated for additional
cuts to education and government. He thought the state had
outspent itself. Alaska had cut its budget before, and he
thought it could do it again. He reiterated his opposition
to HB 1005.
6:19:05 PM
JEFF NELSON, SELF, WASILLA (via teleconference), spoke
against HB 1005. He encouraged Alaska Lawmakers to go back
to the drawing board. He urged legislators to take a pay
cut. He thought his investment had been stolen. People
voted for Governor Dunleavy to put a stop to overspending.
He was against cutting the PFD. He talked about his
personal financial struggles. He thought the state would
eventually be bankrupt because the population would
significantly decline.
6:21:06 PM
BRUCE WILLIAMS, SELF, WASILLA (via teleconference), spoke
in opposition of HB 1005. He felt strongly that the
legislature had not listened to the people. He urged
members to help Alaskans. He talked about Governor Hammond
coming to his place of work advocating that the PFD was the
people's money. He thought Dunleavy was carrying a big
stick - the will of the people.
36:22:52 PM
KEN BROWN, SELF, SOLDOTNA (via teleconference), adamantly
opposed HB 1005. He supported HB 1002, HB 1003, and
HB 1004. He did not believe there should be a change to the
PFD without a vote of the people. He promised he would work
to unseat legislators that supported the bill. He mentioned
a recall effort.
6:23:58 PM
STEWARD SPENCE, SELF, HOMER (via teleconference), spoke in
opposition of HB 1005. She thought HB 1005 was being
brought forth to show Alaskans the urgent need to confront
the legislature, the courts, and the State of Alaska and to
bring the issues before the federal court in order to
regain a due process. She hoped Alaskans' voices would be
heard. She talked about destructive projects occurring in
the state. She suggested she would bring a case before a
federal body if the legislature interfered with the PFD
process. She spoke on things other than the bill before the
committee. She reiterated her intention to prosecute the
legislature if it tried to change the PFD.
6:27:29 PM
KRISTEN BUSH, SELF, EAGLE RIVER (via teleconference), spoke
in opposition of HB 1005. She thought it was easier to take
money from Alaskans through their PFD than to balance the
budget. She noted Alaskans balancing their personal
budgets. She was asking the legislature to do the same with
the state's budget. She asserted that taking the PFD or
revising the original formula was criminal. She urged the
legislature to keep its hands off the PFD. She supported
the governor and HB 1002, HB 1003, and HB 1004. She
restated her opposition to HB 1005. She advocated a vote of
the people in order to change the formula.
6:29:21 PM
CHRISTOPHER NUGENT, SELF, WASILLA (via teleconference),
testified against HB 1005. He loved Alaska but did not
appreciate the persistent battle about something that was
put in place several years ago and worked. He agreed with
the axiom, "If it's not broke, don't fix it." He did not
agree with HB 1005. He asked the legislature to get back to
work.
6:30:09 PM
MARK PRENTICE, SELF, KENAI (via teleconference), testified
against HB 1005. He supported HB 1002, HB 1003, and
HB 1004. He acknowledged the recession in Alaska and did
not feel taking money from Alaskans was the right thing to
do. He hoped the legislature would exercise common sense by
restoring the PFD to the full amount based on the original
formula. He wanted more money pumped back into the private
economy which the PFD facilitated.
6:31:12 PM
ROB KINNEY, SELF, WILLOW (via teleconference), spoke in
opposition to HB 1005 the bill. He stated it was easy to
spend other people's money. He agreed with other testifiers
and urged members to listen to the people of Alaska.
6:32:07 PM
TIMOTHY MAYBERRY, SELF, NORTH POLE (via teleconference),
spoke against HB 1005. He suggested that a referendum was a
reasonable course of action. He noted the state wanted to
take away the pipeline tax from the borough. He mentioned
that his property taxes had gone up by 58 percent. He
thought the retroactive reimbursement for the previous
dividend recalculations was appropriate. He spoke of a
friend that might lose his home if the retroactive payment
of the PFD and the full dividend was not paid. He thought a
discussion was necessary to have about what the state would
do if oil returned to $120 per barrel. Oil conditions were
volatile. He asked the legislature not to tie Alaska to
something the people did not want. He had called all
Interior legislative offices, and Co-Chair Wilson was the
only person that had returned his calls.
6:34:19 PM
SARAH ANN JACKSON, SELF, JUNEAU (via teleconference),
opposed HB 1005. She thought the bill was foul legislation.
She expressed her grievances with the legislature. She was
concerned about the legislature not listening to the
people. She wanted the PFD in the constitution.
6:37:23 PM
WALTER ROSE, SELF, NOME (via teleconference), opposed
HB 1005 and any legislation that took away the PFD
presently or in the future. He believed taking away the PFD
was an inverse regressive tax which was not fair. It
disproportionately taxed low-income people. He relayed that
a tax by any other name was still a tax. He thought there
were two angles of attack against budget imbalance -
measures that cut costs and measures that increased income.
He asserted that politicians did not like to talk about
either, especially new taxes. He wanted to talk about a
fair and equitable tax that tapped the resources of people
who could afford to pay. He urged members not to balance
the budget on the backs of the poor.
6:39:34 PM
JOHN LISENBEE, SELF, ANCHORAGE (via teleconference),
completely opposed HB 1005. He did not think the
legislature was hearing the voice of the people. He
supported a full PFD. He reiterated his opposition to
HB 1005.
6:41:22 PM
GERRY BALLUTA, SELF, KETCHIKAN (via teleconference),
opposed HB 1005. She strongly supported a vote of Alaskans
for any change related to the Permanent Fund. She explained
that she relied on the PFD to help with the high cost of
living despite having a dual income home. She was aware of
the ups and downs of the PFD payouts but advocated that the
formula was in place for a reason. She did not think the
formula should be changed without a vote of the people. She
supported Governor Dunleavy's budget recommendations. She
emphasized that the people were speaking.
6:42:59 PM
STEPHANIE CLAY, SELF, ANCHORAGE (via teleconference), spoke
in opposition to HB 1005. She relayed that the PFD was set
up because Alaska did not own the mineral rights. She
advocated for a full PFD and the repayment of the monies
withheld from the PFD payout for the prior 3 years. She
supported additional cuts to the budget including education
funding.
6:44:56 PM
DAVID HURN, SELF, WASILLA (via teleconference), opposed
HB 1005. He indicated the PFD was for the people. He
thought legislators had been breaking the law for the
previous 3 years. He wondered if legislators knew anything
about economics. He disagreed with legislators receiving
per diem in a special session. He supported HB 1002,
HB 1003, and HB 1005. He was in favor of Alaska. He was
also in favor of moving the capital to the road system.
Co-Chair Wilson clarified that legislators were not
receiving any per diem while they were in Juneau.
6:47:20 PM
RACHEL COLVARD, SELF, ANCHORAGE (via teleconference),
testified in opposition to HB 1005. She wanted her money
back. She thought the worst thing the legislature could do
was to take the people's dividend. She spoke of her
financial woes. There were many people like herself that
needed their PFD.
6:48:33 PM
JEB STUART, SELF, WASILLA (via teleconference), testified
against HB 1005. He advocated for HB 1002, HB 1003, and
HB 1004. He thought the state should reduce its spending
and be fiscally responsible. It was up to the legislature
to make the hard choices, which he did not believe it was
doing. He supported the governor. He reiterated his
opposition to the bill.
6:49:41 PM
ROY SUMNER, SELF, WASILLA (via teleconference), opposed
HB 1005. He thought the legislature had been trying to
destroy the Permanent Fund since it was created. He did not
support changing the PFD formula. He spoke of the high
administrative costs of government. He advocated that the
legislature refund the people's money. He supported
HB 1002, HB 1003, and HB 1004.
6:51:32 PM
BOB BARNDT, SELF, EAGLE RIVER (via teleconference),
testified against HB 1005. He thought the bill was a
bait-and-switch piece of legislation. He did not think it
was right for the PFD to be changed at the will of the
legislature. He thought the matter should be taken up with
a vote of the people. He supported the cuts proposed by the
governor. He reiterated his opposition to HB 1005.
6:52:43 PM
ALLEN CRUCE, SELF, PALMER (via teleconference), strongly
opposed HB 1005. He also opposed the legislature's actions
on presenting the last-minute bills after Governor Dunleavy
gave the legislature ample time to address the 2 bills he
presented to pay back the stolen PFD funds. He thought it
was time legislators listened to the people and supported
the current governor. He thought members needed to be
reminded of how to run a business. He advocated cutting
education funding and balancing the budget without touching
the PFD. He reminded members that they governed as servants
of the people of Alaska.
6:54:02 PM
BARBARA MCMAHAN, SELF, FAIRBANKS (via teleconference),
spoke against HB 1005. She thought legislators were
supposed to be upholders of the law. She believed
legislators were breaking the law. She spoke of the high
costs of living in Alaska and not wanting to move. She
supported Governor Dunleavy. She believed the state should
only spend what it had. She felt it was up to the people to
decide about anything regarding the Permanent Fund. She
vehemently opposed HB 1005.
6:56:13 PM
JONATHAN LOVEJOY, SELF, NORTH POLE (via teleconference),
opposed HB 1005. He advocated getting the budget in order
and spending under control. He agreed with the idea of
putting the formula change up to a vote of the people. He
opposed the legislation.
6:56:39 PM
PIERRE AIMAN, SELF, CHUGIAK (via teleconference), spoke
against HB 1005. He thanked fellow Alaskans that testified.
He opined that legislators would not listen to Alaskans. He
thanked Governor Dunleavy and Ms. Amy Dembowski for taking
care of Alaskans and giving thought to what Alaskans wanted
to do in life. He had been in Alaska since before the
Permanent Fund. He noted the greed in Juneau. He had three
generations in Alaska. He urged members to do something for
the state.
6:59:23 PM
JEANNE SULLIVAN, SELF, WASILLA (via teleconference),
opposed HB 1005. She advocated that the PFD be put to a
vote of the people. She thought politicians were greedy.
She knew of several people that needed the PFD. She had
been in Alaska for over 35 years and had seen the state
deteriorate. She supported Governor Dunleavy who
represented the voice of the people. She urged members to
do their jobs.
7:01:44 PM
LILA JENSEN, SELF, ANCHORAGE (via teleconference), opposed
HB 1005. She was a mother of five children and utilized the
PFDs each year for things her family needed. She urged
members to find a different way to solve the financial
challenges of the state. She thought legislators should
lose their jobs if they did not do something to solve the
problem. She did not want the PFD touched. She asked
members to do the right thing. She reiterated her
opposition to HB 1005.
7:04:51 PM
JAMES MACRAE, SELF, KASILOF (via teleconference), [Note:
The audio was cut off].
7:05:56 PM
AARON BENJAMIN, SELF, TALKEETNA (via teleconference), spoke
against HB 1005. He did not believe legislators were
listening to the will of the people. He thought any changes
to the PFD needed to be put to a public vote. He accused
legislators of stealing from the citizens of Alaska.
7:07:36 PM
JEANNIE PIERCE, SELF, WASILLA (via teleconference), spoke
in opposition to HB 1005. She spoke of family values. She
advocated putting the PFD to a vote of the people. She
mentioned that she had not heard anything about a change in
the oil tax structure. The people that voted for Governor
Dunleavy wanted government spending reduced and the PFD
returned. She hoped the legislature would do the right
thing. She restated her opposition to HB 1005 and urged
members to return the PFD.
7:09:24 PM
DURAINEY RAWLS, SELF, NIKISKI (via teleconference), spoke
against HB 1005 or any bill that voted to take the
Permanent Fund away from Alaskans. She agreed with all of
the previous testifiers that opposed HB 1005. She
reiterated that she voted for Governor Dunleavy because he
promised to return the PFD to the people and to cut
government. She supported HB 1002, HB 1003, and HB 1004.
She remembered having to vote against reducing the PFD
about 25 years prior. At the time, people had to vote to
save the PFD because another politician had tried to take
it from the people. She reported that almost 90 percent of
all registered voters came out to vote against it. She
criticized Governor Walker for taking the people's money.
She wanted her full share and wanted additional cuts
applied to the budget. She appreciated members listening.
7:12:15 PM
DALE AUSTERMUHL, SELF, FAIRBANKS (via teleconference),
testified against HB 1005. He supported Governor Dunleavy
because of his support for families. He spoke of the
importance of the PFD. He urged the legislature to keep the
formula. He was around when the dividend was put into
place. He had voted for Senator Kawasaki and Representative
LeBon. He hoped that Representative LeBon would not support
the bill. He mentioned having his property taxes increased.
He advocated for additional cuts to the budget. He thought
plenty of cuts could still be made, specifically in
education. He supported education but believed it should
come from the federal government.
7:16:00 PM
CRYSTAL MCKENZIE, SELF, ANCHORAGE (via teleconference),
opposed HB 1005. She spoke of the historical background of
the PFD. She spoke of the turncoat Republicans in the
House. She urged large reductions to the budget and urged a
full dividend. She asked the legislature to keep their
hands off of the PFDs.
7:17:40 PM
ELIZABETH SWEET, SELF, NORTH POLE (via teleconference),
strongly opposed HB 1005. She thought Co-Chair Wilson's
career was over. She expressed her support for HB 1002,
HB 1003, and HB 1004.
7:18:04 PM
KEN SEAGLE, SELF, ANCHORAGE (via teleconference), opposed
HB 1005. He understood the legislature wanted to take the
easy route which was to use money for the PFD. However, the
problem was not a simple and easy problem and required more
than a simple and easy solution. The legislature had a duty
to the people of Alaska, not the oil companies. He was
willing to give up some of his PFD but expected the
legislature, the governor, and the oil companies to
contribute their share. He urged members to lead by example
perhaps reducing their salaries. He suggested reducing the
PFD by a percentage. He thought it would be more equitable.
He believed the PFD belonged to the people. He wanted the
burden spread out fairly.
7:21:05 PM
LAURA WHITE, SELF, NORTH POLE (via teleconference), opposed
HB 1005. She did not agree with trying to take the people's
PFD. She spoke of people around her struggling. She thought
the legislature should do what was right by returning money
to Alaskans.
7:22:06 PM
KEVIN MACAN, SELF, JUNEAU (via teleconference), testified
against HB 1005. He did not think it was right to take the
PFD from Alaskans. He argued that the legislature should
balance the budget, as it was fiscally responsible. He
agreed with the disbursement of the PFD with the current
formula. He supported placing the formula and the PFD into
the Alaska Constitution. He thought the majority of callers
that testified were against HB 1005. He hoped all
legislators were listening to public testimony.
7:24:17 PM
Co-Chair Wilson noted that Representative Carpenter was
listening online to public testimony.
7:24:34 PM
ROBBIE CAMPBELL, SELF, KENAI (via teleconference), opposed
HB 1005. She also thought the PFD should be protected in
the constitution. She advocated for a full PFD and the
repayment of the PFD to the people of Alaska. She spoke of
some personal financial struggles and the help the PFD
provided. She supported Governor Dunleavy and opposed
HB 1005.
7:28:11 PM
DAVID MIGNON, SELF, ANCHORAGE (via teleconference), spoke
against HB 1005. He did not want the legislature touching
the PFD. He agreed with the current formula. He thought
members should work towards solving the state's fiscal
problem. He did not want money taken from children for
college. He thought a yes vote would get legislators run
out of town similar to what happened when Governor Walker
took a portion of people's PFD. He thanked the committee.
7:30:02 PM
Co-Chair Wilson CLOSED Public Testimony on HB 1005.
Co-Chair Wilson relayed that amendments were due on Monday,
May 27, 2019 by Noon. She noted Representative Vance had
been with the committee the entire meeting as well.
ADJOURNMENT
7:30:24 PM
The meeting was adjourned at 7:30 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 5-23-19 HFIN HB 1005.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 CS WORKDRAFT FIN S.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 CS WORKDRAFT FIN S.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 1.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 2.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 3.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 4.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 5.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 6.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 7.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |
| HB 1005 Public Testimony pkt 8.pdf |
HFIN 5/23/2019 9:00:00 AM |
HB1005 |