Legislature(2017 - 2018)HOUSE FINANCE 519

04/10/2017 04:00 PM FINANCE

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04:02:58 PM Start
04:03:33 PM SB26
04:04:58 PM Public Testimony
06:41:05 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
+= SB 26 APPROP LIMIT & PER FUND:DIVIDEND;EARNINGS TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit 2 Minutes> --
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+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 10, 2017                                                                                            
                         4:02 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
4:02:58 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 4:02 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Luann McVey, Self, Juneau; Laura  Stats, Self, Juneau; Alyse                                                                    
Galvin, Self, Juneau; Brenda Taylor, Self, Juneau;                                                                              
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Luke Hopkins,  self, Fairbanks;  Lynette Clark,  Chairman of                                                                    
the Alaska  Independent Party, Fairbanks; Mike  Coons, Self,                                                                    
Palmer; David Otness, Self, Cordova;  Steve St. Clair, self,                                                                    
Mat-Su;  Abby St.  Clair, self,  Mat-Su; Stuart  Schmutzler,                                                                    
Self,  Homer; David  Nees, Alaska  Policy Forum,  Anchorage;                                                                    
Michael Chambers,  Mission Critical Alaska,  Anchorage; Orin                                                                    
Seybert,  Self, Anchorage;  Laura  Bomner, Self,  Anchorage;                                                                    
Pamela  Samash,   Self,  Nenana;  Paul  D.   Kendall,  Self,                                                                    
Anchorage;  Jennifer McNichol,  Self,  Sitka; Todd  Smoldon,                                                                    
Self, Willow;  Garvan Bucaria,  Self, Mat-Su;  Joan Johnson,                                                                    
Self, Fairbanks;  Michael Jesperson, Self,  Anchorage; Karen                                                                    
Perry, Self,  Chugiak; William Popel, Self,  Anchorage; Eric                                                                    
Middlebrook,  Self,  Bethel;  Ross Mullins,  Self,  Cordova;                                                                    
Dean  Kasischke, Self,  Seward;  Pat  Holmes, self,  Kodiak;                                                                    
Kurt Schmidt Kasischke, Citizens  of Alaska, Delta Junction;                                                                    
Pam  Goode,   Self,  Rural  Deltana;  Stacy   Turner,  Self,                                                                    
Anchorage;  James  Squyres,   Self,  Rural  Deltana;  Jessie                                                                    
Chandler, Self, Fairbanks; Debra Kim, Self, Anchorage; `                                                                        
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 26(FIN)                                                                                                                    
         APPROP LIMIT & PER FUND:DIVIDEND;EARNINGS                                                                              
                                                                                                                                
          CSSB 26 (FIN) was HEARD and HELD in committee for                                                                     
          further consideration.                                                                                                
                                                                                                                                
Co-Chair Foster reviewed the agenda for the day.                                                                                
                                                                                                                                
CS FOR SENATE BILL NO. 26(FIN)                                                                                                
                                                                                                                                
     "An Act  relating to  an appropriation  limit; relating                                                                    
     to  the   budget  responsibilities  of   the  governor;                                                                    
     relating to the Alaska  permanent fund, the earnings of                                                                    
     the  Alaska permanent  fund, and  the earnings  reserve                                                                    
     account;  relating to  the  mental  health trust  fund;                                                                    
     relating to  deposits into the dividend  fund; relating                                                                    
     to  the  calculation  and  payment  of  permanent  fund                                                                    
     dividends; and providing for an effective date."                                                                           
                                                                                                                                
4:03:33 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  indicated public testimony for  SB 26 would                                                                    
be heard and was limited two minutes per person.                                                                                
                                                                                                                                
                                                                                                                                
^PUBLIC TESTIMONY                                                                                                             
                                                                                                                                
4:04:58 PM                                                                                                                    
                                                                                                                                
LUANN  MCVEY,  SELF, JUNEAU,  indicated  she  was a  retired                                                                    
schoolteacher. She  urged members to minimize  the number of                                                                    
cuts to the state budget.  She thought additional cuts would                                                                    
substantially affect  the quality  of life for  Alaskans and                                                                    
would  result in  job losses  in  the state.  She hoped  the                                                                    
legislature  would  hold   public  education  harmless.  She                                                                    
relayed that  budget cuts resulted in  drastic reductions in                                                                    
one-on-one  time  between  students   and  teachers  in  the                                                                    
classroom.  It  also  resulted   in  reductions  to  support                                                                    
services for students who struggled.  In terms of education,                                                                    
there would be  an impact in the future. She  was pleased to                                                                    
see HB 111 pass in the House.  She wanted to see the oil and                                                                    
gas companies appropriately taxed. She  favored a cap on the                                                                    
Permanent  Fund Dividend  (PFD) and  a personal  income tax.                                                                    
She also  wanted to  see the people  in small  villages held                                                                    
harmless.                                                                                                                       
                                                                                                                                
4:08:03 PM                                                                                                                    
                                                                                                                                
LAURA STATS, SELF, JUNEAU, spoke  in favor of CSSB 26 (FIN).                                                                    
She  had observed  several of  the  House Finance  Committee                                                                    
hearings. She appreciated  all of the work  of the committee                                                                    
to create  a budget for Alaska's  citizens. She particularly                                                                    
liked  Section  19 of  the  bill  and read  the  conditional                                                                    
language it  contained. She thought the  language provided a                                                                    
more  comprehensive budget  plan. She  had read,  in Senator                                                                    
Gardner's newsletter,  that the  tax subsidies  would amount                                                                    
to $1.37 billion when the  state would earn production taxes                                                                    
of  $87  million.  In  conclusion,   she  wanted  to  see  a                                                                    
comprehensive  budget  plan   passed  that  represented  the                                                                    
citizens of Alaska rather than corporations.                                                                                    
                                                                                                                                
4:11:27 PM                                                                                                                    
                                                                                                                                
LUKE  HOPKINS, SELF,  FAIRBANKS (via  teleconference), spoke                                                                    
in  favor of  CSSB  26 (FIN).  He was  a  former North  Star                                                                    
Borough Mayor. He  asserted that it was  very important that                                                                    
Alaskans had  a PFD in the  amount of $1250. He  agreed with                                                                    
the sunset  date provision as  well. He thought it  was only                                                                    
one of the  components of a comprehensive  fiscal plan under                                                                    
consideration.   He   believed   the  proposed   cuts   were                                                                    
manageable, versus  the heavy  cuts proposed  previously. He                                                                    
also  agreed   with  the  restructuring   of  the   oil  tax                                                                    
structure.  He  thought  the  bill  addressed  some  of  the                                                                    
dysfunction he had seen in  producing a comprehensive fiscal                                                                    
plan.  He did  not favor  draining the  state's savings.  He                                                                    
spoke  to the  conditional  language in  Section  19 of  the                                                                    
bill.  He  favored  broad-based revenue  measures.  He  also                                                                    
supported school funding. He thanked the committee.                                                                             
                                                                                                                                
4:14:44 PM                                                                                                                    
                                                                                                                                
LYNETTE  CLARK, CHAIRMAN  OF THE  ALASKA INDEPENDENT  PARTY,                                                                    
FAIRBANKS (via teleconference), spoke  in opposition of CSSB                                                                    
26 (FIN).  She believed  the bill  was unnecessary  and that                                                                    
dollars were available in  the Constitutional Budget Reserve                                                                    
(CBR).  She  also  favored   additional  reductions  to  the                                                                    
budget.  She opined  that taking  money  from the  Permanent                                                                    
Fund (PF) and the PFD's was  a form of tyranny. She strongly                                                                    
urged members  to oppose CSSB 26  (FIN). She did not  want a                                                                    
sales tax, an income tax, or  a cap on the PFD. Instead, she                                                                    
wanted  to see  more cuts  to the  budget and  other revenue                                                                    
means.  She noted  tax revenues  from  marijuana sales.  She                                                                    
thought the  percentage numbers  would fill  the need  for a                                                                    
final  vote. She  asked the  legislature not  to plunge  the                                                                    
state into  a deeper  recession. She mentioned  a referendum                                                                    
and the possibility of  recalling legislators. She indicated                                                                    
that  the  representatives  would  be  removed  from  office                                                                    
through  a vote  of the  people. She  urged members  to vote                                                                    
"no" on the legislation.                                                                                                        
                                                                                                                                
4:19:05 PM                                                                                                                    
                                                                                                                                
MIKE  COONS, SELF,  PALMER  (via  teleconference), spoke  in                                                                    
opposition of CSSB  26 (FIN). He relayed  that Senator Kelly                                                                    
had stated  that the  PFD was  Alaska's largest  expense. He                                                                    
believed  that  the  reason  for  the PF  was  to  keep  the                                                                    
government  from  spending  all  of  the  oil  revenues.  He                                                                    
continued  that 25  percent  of  the PF  was  meant for  the                                                                    
people of Alaska  for their mineral rights.  Over the years,                                                                    
the legislature chose  not to tap the PF  earnings, which he                                                                    
thought was  good. Instead of  getting into the  PF earnings                                                                    
in a responsible way the  House of Representatives wanted to                                                                    
spend a  huge hunk of the  earnings, add an income  tax, and                                                                    
maintain government  spending. He  did not believe  the bill                                                                    
was  fixing the  problem. He  also felt  the bill  blatantly                                                                    
discriminated  against rural  Alaska.  He  urged members  to                                                                    
vote down the bill.                                                                                                             
                                                                                                                                
4:21:11 PM                                                                                                                    
                                                                                                                                
DAVID OTNESS,  SELF, CORDOVA (via teleconference),  spoke in                                                                    
opposition  of  the  bill.  He  was  disappointed  that  the                                                                    
legislature  had  allowed the  state  to  reach its  current                                                                    
circumstances. He did not  believe the legislation reflected                                                                    
the vision of  those people who created the PF.  He felt the                                                                    
actions  of the  legislature were  cheapening the  legacy of                                                                    
the  vision of  Alaska's future.  Other countries  looked to                                                                    
Alaska as  an example. He  spoke of the state's  present oil                                                                    
resources  but  did   not  think  there  was   any  hope  of                                                                    
expansion.  He avowed  that it  was  reprehensible that  the                                                                    
state was going to raid the PF.                                                                                                 
                                                                                                                                
4:23:49 PM                                                                                                                    
                                                                                                                                
STEVE ST. CLAIR, SELF,  MAT-SU (via teleconference), opposed                                                                    
CSSB 26 (FIN).  He thought the enactment of  the bill should                                                                    
not be contingent on any  other bills. He continued that all                                                                    
bills should  stand on  their own  merit. He  furthered that                                                                    
CSSB 26 took  money out of the hands of  Alaskans and placed                                                                    
it  into  the hands  of  government.  He thought  government                                                                    
needed to  encourage competition  within the  private sector                                                                    
in order  for Alaska to  get out  of a recession.  He agreed                                                                    
that the most  regressive tax was reflected  in the proposed                                                                    
changes to the dividend. The  Senate claimed to have reduced                                                                    
the  budget  by  $250  million.   Alaskans  will  see  their                                                                    
dividends  reduced by  almost  $750 million  -  3 times  the                                                                    
amount government was reduced.  He thought government needed                                                                    
to  be reduced  to the  point equal  to the  amount Alaskans                                                                    
were being asked to give up  in the form of their dividends.                                                                    
He urged members to vote no on CSSB 26 (FIN).                                                                                   
                                                                                                                                
4:26:04 PM                                                                                                                    
                                                                                                                                
ABBY ST. CLAIR, SELF,  MAT-SU (via teleconference), spoke in                                                                    
opposition of CSSB HB 26.  She believed the people of Alaska                                                                    
had enough skin in the  game. The legislature had introduced                                                                    
budget  cuts of  less than  $300 million  but was  demanding                                                                    
that Alaskans  give up approximately $700  million via their                                                                    
PFDs. She referred to Page 6  lines 14-20 of the bill, which                                                                    
stated that  SB 26  would become  law after  the broad-based                                                                    
income tax  and HB  111 were passed.  She thought  each bill                                                                    
should stand on their own.  She mentioned having grown up in                                                                    
the  village of  Shishmaref and  spoke of  the high  cost of                                                                    
living in rural  Alaska. Many Alaskans relied on  the PFD to                                                                    
help pay for heating  oil, clothing, and mechanical repairs.                                                                    
She noted  that the average  household had a mere  income of                                                                    
$29  thousand  per  year   according  to  citydata.com.  She                                                                    
thought that  taking any  portion of the  PFD would  make it                                                                    
more difficult  to survive in bush  Alaska. She reemphasized                                                                    
that Alaskans  had already made enough  sacrifices and urged                                                                    
members  not to  consider any  changes to  the PFD.  She was                                                                    
holding  legislators'  feet  to  the  fire  to  balance  the                                                                    
budget. She reminded members  that they represented Alaskans                                                                    
rather than the governor.                                                                                                       
                                                                                                                                
4:28:31 PM                                                                                                                    
                                                                                                                                
STUART SCHMUTZLER,  SELF, HOMER (via  teleconference), spoke                                                                    
in opposition  of CSSB 26. He  liked the idea of  a personal                                                                    
income tax. He  thought there were several  workers that did                                                                    
not  have to  pay  taxes,  which he  thought  was wrong.  He                                                                    
thanked the committee.                                                                                                          
                                                                                                                                
4:30:18 PM                                                                                                                    
                                                                                                                                
DAVID   NEES,   ALASKA    POLICY   FORUM,   ANCHORAGE   (via                                                                    
teleconference),  spoke   in  opposition  to  CSSB   26.  He                                                                    
reported that the  forum had originally scored SB  26 with a                                                                    
-4 rating in  its freedom index. He reviewed  the details of                                                                    
the scoring. He noted that in  all of the documents from the                                                                    
House and the  Senate there was no economic  impact study of                                                                    
the legislation. He  thought it was curious  that the fiscal                                                                    
note was zero. He mentioned  the contingency language in the                                                                    
newest version  of the  bill. The forum's  score card  of -4                                                                    
equaled D-. The Alaska Policy Forum opposed the bill.                                                                           
                                                                                                                                
Representative Wilson asked if there was a new fiscal note.                                                                     
                                                                                                                                
4:32:45 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:33:45 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster clarified  that there was a  new fiscal note                                                                    
forthcoming.  The  new note  would  be  available online  on                                                                    
BASIS.                                                                                                                          
                                                                                                                                
4:34:21 PM                                                                                                                    
                                                                                                                                
MICHAEL  CHAMBERS, MISSION  CRITICAL ALASKA,  ANCHORAGE (via                                                                    
teleconference), spoke in opposition to  CSSB 26. He did not                                                                    
think members listened  to the testimony of  the citizens of                                                                    
Alaska  and   anticipated  a   referendum  to   reverse  the                                                                    
legislation, if passed. He also  suggested that members that                                                                    
voted in favor of SB 26  would also be on the referendum. He                                                                    
mentioned  that Commissioner  Hoffbeck  had recently  stated                                                                    
that the reason the governor  went after the PFD was because                                                                    
it  was the  largest  amount of  accessible  money. He  also                                                                    
relayed that Senator  Pete Kelly had referred to  the PFD as                                                                    
the  government's  largest  spend. The  senator's  statement                                                                    
assumed  that the  PFD belonged  to government.  He asserted                                                                    
that it did  not. He agreed with Clem Tillion  that the acts                                                                    
of  the legislature  equated to  theft.  Government was  the                                                                    
state's largest  spend and Alaskans  were not  getting value                                                                    
for  their  dollars.  He encouraged  citizens  to  attend  a                                                                    
Mission Critical  Alaska event.  He relayed a  specific date                                                                    
and  time of  an upcoming  event in  Palmer. He  thanked the                                                                    
committee.                                                                                                                      
                                                                                                                                
4:36:08 PM                                                                                                                    
                                                                                                                                
ORIN  SEYBERT, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in favor of CSSB 26. .  He thought there was confusion about                                                                    
the PFD and the PF  clarifying they were two separate items.                                                                    
He asserted  that only  the earnings from  the PF  should be                                                                    
used rather  than the PFD. He  would be the first  person to                                                                    
protest removing  the PFD from  the owners of the  state. He                                                                    
believed in a personal income  tax and encouraged members to                                                                    
move forward with the tax.  He also supported additional oil                                                                    
taxes.  He  noted that  with  a  battery of  attorneys,  oil                                                                    
companies would assert that they  would leave Alaska, but he                                                                    
did not believe it.  However, the companies wanted certainty                                                                    
about the tax  rate. He encouraged the legislature  to set a                                                                    
high tax  rate high  for oil companies  and maintain  it. He                                                                    
thanked the committee.                                                                                                          
                                                                                                                                
4:39:31 PM                                                                                                                    
                                                                                                                                
LAURA  BOMNER, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in support  of the House  version of  the bill. She  noted a                                                                    
couple of  specific sections that  she liked. She  had lived                                                                    
in Anchorage since 1975. She  appreciated the opportunity to                                                                    
speak.                                                                                                                          
                                                                                                                                
4:41:14 PM                                                                                                                    
                                                                                                                                
PAMELA SAMASH,  SELF, NENANA (via teleconference),  spoke in                                                                    
opposition  to CSSB  26. She  talked  about having  provided                                                                    
positive   ideas  to   the   committee.   She  thought   her                                                                    
suggestions had  been ignored. She mentioned  that the state                                                                    
should support  marriage and  provide counseling.  She urged                                                                    
members to vote against the legislation.                                                                                        
                                                                                                                                
4:44:04 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:44:12 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
PAUL  D.  KENDALL,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
opposed CSSB  26. He  read a  letter having  to do  with the                                                                    
federal government.  He spoke  of the  legislature convening                                                                    
in Anchorage. He  posed the question about  who really owned                                                                    
Alaska's resources.  He mentioned Public  Retirement issues.                                                                    
He mentioned  a federal  plan. He noted  there was  a public                                                                    
betrayal. He spoke  to items outside of  the legislation. He                                                                    
urged members to come together in Anchorage.                                                                                    
                                                                                                                                
4:48:20 PM                                                                                                                    
                                                                                                                                
JENNIFER   MCNICHOL,  SELF,   SITKA  (via   teleconference),                                                                    
supported  CSSB   26  because  it  called   for  a  balanced                                                                    
approach. She was concerned about  public school funding and                                                                    
any  additional cuts.  She agreed  with a  balanced approach                                                                    
that included  a Permanent  Fund restructuring.  She thanked                                                                    
the committee for hearing her testimony.                                                                                        
                                                                                                                                
4:50:24 PM                                                                                                                    
                                                                                                                                
TODD SMOLDON,  SELF, WILLOW  (via teleconference),  spoke in                                                                    
opposition  of  CSSB 26.  He  thanked  minority members  for                                                                    
their efforts  in offering amendments.  He noted the  PF was                                                                    
created for a rainy day. He  spoke of the balance in several                                                                    
savings  accounts.  He  noted  that  it  was  sad  that  the                                                                    
majority and  minority could not  come up with  a compromise                                                                    
plan. He  very much opposed  the legislation in  its current                                                                    
form. He  stated that the  state was spending $4  billion to                                                                    
pay  for government.  He thanked  the committee  for hearing                                                                    
his testimony.                                                                                                                  
                                                                                                                                
4:53:30 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  noted the  committee  had  been joined  by                                                                    
Representative Thompson.                                                                                                        
                                                                                                                                
4:53:45 PM                                                                                                                    
                                                                                                                                
GARVAN BUCARIA, SELF, MAT-SU  (via teleconference), spoke in                                                                    
opposition of  CSSB 26. He suggested  cutting the governor's                                                                    
gasline project. He also opposed  a state income tax and the                                                                    
use  of the  CBR. He  did not  want the  existing PF  system                                                                    
changed.                                                                                                                        
                                                                                                                                
4:55:09 PM                                                                                                                    
                                                                                                                                
ALYSE GALVIN,  SELF, JUNEAU, supported portions  of CSSB 26.                                                                    
She  reminded  members  they were  representing  the  entire                                                                    
State  of  Alaska.  She  supported a  reworking  of  the  PF                                                                    
earnings as  contained in  the bill  and recognized  that it                                                                    
was one  piece of  a fiscal solution.  She also  favored the                                                                    
tie-ins contained in the bill.  She thought it was important                                                                    
that if the legislature was going  to change the PF, that an                                                                    
equitable approach be taken, one  that was fair to families.                                                                    
She  noted  having  spoken  with  the  commissioner  of  the                                                                    
Department of  Revenue who  shared with  her that  the state                                                                    
was losing millions of dollars  by not making decisions. The                                                                    
commissioner  spoke of  resulting losses  from the  previous                                                                    
year of about  $66 million. She thought the  amount would be                                                                    
higher  in  the current  year.  She  urged members  to  make                                                                    
decisions immediately.                                                                                                          
                                                                                                                                
4:58:27 PM                                                                                                                    
                                                                                                                                
BRENDA TAYLOR, SELF,  JUNEAU, spoke in favor of  CSSB 26. As                                                                    
a  parent  and  teacher,   she  appreciated  the  model  the                                                                    
legislature was  exhibiting. She  thanked the  committee and                                                                    
encouraged a comprehensive plan.                                                                                                
                                                                                                                                
4:59:38 PM                                                                                                                    
                                                                                                                                
JOAN  JOHNSON, SELF,  FAIRBANKS (via  teleconference), spoke                                                                    
in opposition  to CSSB 26.  She thought  government spending                                                                    
needed  to   continue.  She   urged  members   to  encourage                                                                    
investment  in the  state. She  wished  the legislature  the                                                                    
best.                                                                                                                           
                                                                                                                                
5:00:42 PM                                                                                                                    
                                                                                                                                
MICHAEL  JESPERSON,  SELF, ANCHORAGE  (via  teleconference),                                                                    
opposed the legislation because  of the conditional language                                                                    
included. He did not like the  power play of a threat in the                                                                    
bill.                                                                                                                           
                                                                                                                                
5:02:00 PM                                                                                                                    
                                                                                                                                
KAREN PERRY,  SELF, CHUGIAK  (via teleconference),  spoke in                                                                    
opposition of CSSB 26. She  indicated the PF belonged to the                                                                    
people  of Alaska.  She disagreed  with  Senator Pete  Kelly                                                                    
that the PFD was the largest  expense in the budget. She was                                                                    
emphatic that  legislators needed  to be  representatives of                                                                    
the people. She thought that  cutting the PFD decreased jobs                                                                    
and threatened  the economy. She  noted some  specific items                                                                    
in the bill. She asked  about ghost positions in the budget.                                                                    
She urged members to vote "no" on CSSB 26.                                                                                      
                                                                                                                                
5:05:06 PM                                                                                                                    
                                                                                                                                
WILLIAM POPEL,  SELF, ANCHORAGE (via  teleconference), spoke                                                                    
in opposition to  CSSB 26. He arrived in Alaska  in 1966. He                                                                    
asserted that the allotted time  of 2 minutes was not enough                                                                    
time  for citizens  to  provide their  valuable  input on  a                                                                    
complex  bill  with  huge   ramifications.  He  suggested  a                                                                    
minimum  of  3  minutes.  He  questioned  the  legislature's                                                                    
appropriation limit  of $4.1 billion and  thought the amount                                                                    
should be  lower. He added  that a lower figure  should also                                                                    
include paying  the state's debt  obligations and  money for                                                                    
capital projects.  He thought the  legislature should  get a                                                                    
handle on  state spending. He  read a list generated  by the                                                                    
citizens group,  Mission Critical,  of several  budget items                                                                    
that  were over  and above  constitutional expenditures.  He                                                                    
also pointed out that restructuring  the PFD distribution of                                                                    
25  percent of  the amount  calculated did  not meet  former                                                                    
Governor  Jay  Hammond's  50/50 plan,  which  was  the  most                                                                    
desirable split  for essential  government services  and the                                                                    
PFD distribution. He believed that  the maximum amount of PF                                                                    
earnings  to be  spent on  essential government  services by                                                                    
his formula  split would restrict government  spending while                                                                    
continuing  a   tremendous  economic  stimulus   package  by                                                                    
private citizens  for the overall Alaska  economy. The split                                                                    
of 75/25 limited the people  instead of limiting government.                                                                    
He  also  noted  that  the   conditional  language  did  not                                                                    
guarantee  a PFD  distribution. Current  law specified  that                                                                    
the PFD "shall"  be distributed. He thought  capping the PFD                                                                    
was the  worst thing to do  to the economy. He  also urged a                                                                    
vote by the people to use the PF.                                                                                               
                                                                                                                                
Co-Chair Seaton noted that the  committee was hearing public                                                                    
testimony  for the  House Committee  Substitute  for SB  26,                                                                    
version U.                                                                                                                      
                                                                                                                                
5:08:58 PM                                                                                                                    
                                                                                                                                
ERIC MIDDLEBROOK,  SELF, BETHEL (via  teleconference), spoke                                                                    
in favor  of the bill  and of  tying the legislation  to the                                                                    
passage of  the oil  tax bill reducing  oil tax  credits. He                                                                    
thought cutting  too much  from the  budget would  result in                                                                    
hurting  the  economy.  He  alleged  that  a  healthy  state                                                                    
government led  to a  healthy economy. He  felt like  he was                                                                    
being  asked  to   pay  for  someone  else's   dinner  at  a                                                                    
restaurant  when they  should  pay for  their  own. The  oil                                                                    
wealth  in Alaska  belonged  to everyone  in  the state.  He                                                                    
thought cutting  the PFD was  a regressive course  of action                                                                    
but favored a personal income tax.                                                                                              
                                                                                                                                
5:12:04 PM                                                                                                                    
                                                                                                                                
ROSS MULLINS,  SELF, CORDOVA (via teleconference),  had been                                                                    
a  resident  of Cordova  since  1963  and was  a  commercial                                                                    
fisherman for 37  years. He had been forced  out of business                                                                    
after  the Exxon  Valdez  oil spill.  He  thought the  House                                                                    
Finance  Committee  was a  very  reasonable  group. He  also                                                                    
supported HB  111 and  HB 115. However,  he opposed  CSSB 26                                                                    
because of  its limited  scope and conditional  language. He                                                                    
did not think the Senate would  support HB 111. He hoped the                                                                    
committee  would continue.  He thought  any further  cuts to                                                                    
the  bone of  the  budget  would force  seniors  out of  the                                                                    
state. He thanked the committee for hearing his testimony.                                                                      
                                                                                                                                
5:16:08 PM                                                                                                                    
                                                                                                                                
DEAN KASISCHKE, SELF, SEWARD  (via teleconference), spoke in                                                                    
opposition of CSSB  26. He opposed using the  PF. He thanked                                                                    
the committee.                                                                                                                  
                                                                                                                                
Co-Chair  Seaton  indicated  that  there  was  no  one  else                                                                    
online. The committee would be "at ease" until 6:00 pm.                                                                         
                                                                                                                                
5:17:38 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:59:24 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
PAT HOLMES,  SELF, KODIAK (via teleconference),  believed in                                                                    
an income  tax. He was  reluctant to see the  Permanent Fund                                                                    
tapped  but  thought  it was  probably  necessary.  He  also                                                                    
advocated for a  head tax. He commended  the legislature for                                                                    
its work. He and his wife  were retired and would find a way                                                                    
to pay an income tax.                                                                                                           
                                                                                                                                
Co-Chair Seaton asked Mr. Holmes  if he wanted to comment on                                                                    
the oil tax component.                                                                                                          
                                                                                                                                
Mr. Holmes thought the richest  industry in the state should                                                                    
pay  its fair  share.  He  thought the  cuts  that had  been                                                                    
implemented   were   impacting   the   smaller   communities                                                                    
negatively.   He  advocated   for  less   credits  for   oil                                                                    
companies.                                                                                                                      
                                                                                                                                
Co-Chair  Foster relayed  that  the committee  would be  "at                                                                    
ease" until 6:30 pm.                                                                                                            
                                                                                                                                
6:06:22 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
6:30:01 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster  indicated  there  were a  few  more  folks                                                                    
wanting to testify.                                                                                                             
                                                                                                                                
6:30:20 PM                                                                                                                    
                                                                                                                                
KURT SCHMIDT KASISCHKE, CITIZEN'S  OF ALASKA, DELTA JUNCTION                                                                    
(via  teleconference), spoke  in opposition  of CSSB  26. He                                                                    
thought additional  cuts should be made.  However, education                                                                    
was  being  attacked  which  he   thought  was  foolish.  He                                                                    
believed cutting  spending as well  as reducing  tax credits                                                                    
were in  order. He did not  believe cutting the PFD  was the                                                                    
right action to take. He  mentioned a pending court case. He                                                                    
thought  the money  that was  taken last  session should  be                                                                    
returned to  the citizens  of Alaska.  The dividend  was set                                                                    
aside for the people of Alaska for its resources.                                                                               
                                                                                                                                
6:33:22 PM                                                                                                                    
                                                                                                                                
PAM  GOODE,   SELF,  RURAL  DELTANA   (via  teleconference),                                                                    
opposed CSSB  26. She thought  the bill was much  worse than                                                                    
the  previous   version.  She   opposed  changing   the  PFD                                                                    
calculation,  opposed   HB  111,  and  opposed   taking  the                                                                    
people's PFD.  She also asserted  that last  year's dividend                                                                    
should be restored to the people.                                                                                               
                                                                                                                                
6:35:05 PM                                                                                                                    
STACY TURNER, SELF,  ANCHORAGE (via teleconference), opposed                                                                    
CSSB  26.  She  depended  on  the  PFD  for  extracurricular                                                                    
activities for her 5 children.                                                                                                  
                                                                                                                                
6:35:47 PM                                                                                                                    
                                                                                                                                
JAMES  SQUYRES, SELF,  RURAL  DELTANA (via  teleconference),                                                                    
spoke against CSSB  26. He thought it was  acceptable to use                                                                    
some  of  the  earnings  reserve without  changing  the  PFD                                                                    
calculation.  However,  he felt  a  POMV  went too  far.  He                                                                    
agreed with eliminating the refundable  oil and gas credits,                                                                    
but he believed HB 111 went  too far. He also suggested that                                                                    
any  type of  income tax  went too  far. He  favored cutting                                                                    
more   expenses  including   the  legislative   lounge,  the                                                                    
Medicaid  extras,   and  a  portion  of   the  base  student                                                                    
allocation.  He  agreed  with Senator  Dunleavy's  plan  and                                                                    
advised members to talk to him.                                                                                                 
                                                                                                                                
6:36:59 PM                                                                                                                    
                                                                                                                                
JESSIE  CHANDLER,  SELF,   FAIRBANKS  (via  teleconference),                                                                    
opposed  CSSB 26.  She thought  the government  continued to                                                                    
take more out  of the pockets of hard  working Alaskans. She                                                                    
offered to  sit down  with any of  the committee  members at                                                                    
her  kitchen  table  to  show  them  how  she  balanced  her                                                                    
checkbook.  She thought  government  needed  to continue  to                                                                    
reduce its  spending. She opined  Alaskans had more  skin in                                                                    
the game  than government. She  noted that $750  million had                                                                    
been  taken  from  Alaskans. She  asserted  that  until  the                                                                    
government  reduced  its  budget  by  the  same  amount,  no                                                                    
changes should  be made to  the dividend or  the calculation                                                                    
formula. She was certain the  Department of Revenue would be                                                                    
happy to accept any dividends  that Alaskans were willing to                                                                    
give up. She  emphasized that for many Alaskans  they had to                                                                    
choose  between  heating  their   homes  and  feeding  their                                                                    
children. She  concluded that the bill  was about government                                                                    
rather than Alaskans.                                                                                                           
                                                                                                                                
6:38:48 PM                                                                                                                    
                                                                                                                                
DEBRA KIM,  SELF, ANCHORAGE  (via teleconference),  spoke in                                                                    
opposition of CSSB 26. She  relayed that as a senior citizen                                                                    
cuts  to  the  PFD  hurt  seniors  substantially.  She  also                                                                    
thought  that people  in rural  Alaskan  villages were  also                                                                    
inequitably  affected. She  suggested that  the whole  world                                                                    
was  watching  to see  what  actions  the legislature  would                                                                    
take. Other  places that had  oil pipelines were  looking to                                                                    
see how  Alaska conducted  its business. She  reiterated her                                                                    
opposition to the bill.                                                                                                         
                                                                                                                                
Co-Chair Foster reminded folks that  they could submit their                                                                    
testimony in writing to housefinance@akleg.gov.                                                                                 
                                                                                                                                
Co-Chair Foster  reviewed the agenda for  the following day.                                                                    
He reminded members that amendments  for CSSB 26 were due by                                                                    
Tuesday, April 11, 2017 at 11:00 a.m.                                                                                           
                                                                                                                                
CSSB 26 (FIN) was HEARD and HELD in committee for further                                                                       
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Foster recessed the meeting to a call of the chair                                                                     
[Note: the meeting never reconvened].                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
6:41:05 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 6:41 p.m.                                                                                          

Document Name Date/Time Subjects
SB26_Oppose_041017_1.pdf HFIN 4/10/2017 4:00:00 PM
SB 26