Legislature(1995 - 1996)
01/26/1995 09:07 AM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 26, 1995
9:00 A.M.
TAPE HFC 95-7, Side 1, #000 - 531.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 9:07 a.m.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Brown Representative Parnell
Representative Kelly Representative Therriault
Representatives Mulder, Navarre and Grussendorf were absent
from the meeting.
ALSO PRESENT
Speaker Gail Phillips; Representative John Davies; Kevin
Richie, Executive Director, Alaska Municipal League; Annalee
McConnell, Director, Office of Management and Budget, Office
of the Governor; Chris Christensen, Staff Counsel, Alaska
Court System;
SUMMARY
HCR 1 Creating the Long Range Financial Planning
Commission.
HCR 1 was HELD in Committee for further
discussion.
HOUSE CONCURRENT RESOLUTION NO. 1
Creating the Long Range Financial Planning Commission.
SPEAKER GAIL PHILLIPS spoke in support of HCR 1. She noted
that the concept of creating a special Long-Range Financial
Planning Commission charged with a plan to organize the
state's finances was first proposed during the last
legislative session. She observed that the State is faced
with an unpredictable and declining revenue stream.
Speaker Phillips referred to the Cremo plan. She observed
that the Cremo plan received extensive consideration by the
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House Judiciary Committee during the previous session. A
House Judiciary Subcommittee recommended that a Long-Range
Financial Planning Commission be convened to review and
identify anticipated state expenditures, recurring revenue
and potential revenue sources, existing reserves, and to
investigate implementing forward funding of the budget.
Speaker Phillips emphasized that long range financial
planning is essential to attain stability of Alaska's
financial future.
Speaker Phillips outlined changes recommended by Governor
Knowles in which she is in agreement:
* Change page 3, line 9 (9) from "February 15, 1996
to October 1, 1995;
* Increase public representation; and
* use in-house staff to reduce fiscal cost.
Speaker Phillips explained that the early report date would
allow the Governor's office to use the Commission's report
to develop the FY 97 budget. She observed that the current
version stressed representation by financial experts. She
agreed that it would be better for the majority of the
Commission's members to be from the public. She noted that
in-house financial experts can assist the Commission
members. She recommended that a contractor be hired to
coordinate the Commission and the work of the Commission.
She added that the Commission can be housed in the Anchorage
LIO.
Co-Chair Foster clarified that members can come from all
parts of the State. Speaker Phillips noted that the fiscal
note accompanying the Senate companion bill is higher to
accommodate travel for public members from across the state.
She expressed support for the increased travel allocation.
Representative Martin noted that prior administrations and
legislatures have reviewed the issues and compiled reports
regarding the State's long range fiscal status. He
emphasized that no action has been taken by previous
legislatures. He urged that action be taken.
Representative Brown echoed remarks by Representative Martin
in regards to the need for action. She emphasized the use
of studies previously compiled to educate the public and
legislators. She stressed the need to bring together what
is known and produce a consensus or package solution
options. She suggested that the work of the Commission
focus on finding conclusions or possible solutions. She
recommended that a special session meet in the Fall of 1995
to allow action to take place. She stressed that the
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legislature and executive branch must be actively involved.
She asserted that it is time for action.
Speaker Phillips agreed that Representative Brown's
suggestion for a special session has merit.
Co-Chair Foster spoke in support of HCR 1. He noted
concerns among constituents in his district.
Representative Therriault suggested that cutting and
consolidating programs be prioritized over instituting
taxes. Speaker Phillips noted that the resolves were not
prioritized. She indicated that item (8) would be her
number one priority.
Representative Therriault suggested that the Department of
Revenue's mid case forecast be used as base information. He
added that the Department of Education's growth charts
should also be used.
CHRIS CHRISTENSEN, STAFF COUNSEL, ALASKA COURT SYSTEM noted
that the legislative and executive branches are
participating in the planning process. He stressed that the
judicial branch will be part of the equation in any effort
to rationalize state spending and downsize state government.
He requested that one seat be made available to a
representative from the judicial branch.
Representative Martin noted that each Governor as directed
by executive order submits a long range plan for the State's
well being. He observed that the judicial branch has not
been previously involved in this process. He expressed
concern that
the judiciary branch remain neutral in order to adjudicate
disputes regarding any plan.
Mr. Christensen stressed that the judicial appointee would
probably be a financial expert from the administrative
office. He stressed that judges can "wear two hats;" to put
administrative interest aside and look at legal issues.
Representative Parnell echoed Representative Martin's
concern that there is an inherent conflict of interest in
having a judicial representative on the Commission.
KEVIN RICHIE, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE
stated that the Alaska Municipal League strongly supports
the long-range fiscal planning process. He noted that
stabilization of municipalities and long-range fiscal
planning are the Alaska Municipal League's two platform
issues. He offered the use of Alaska Municipal League's
resources for use by the Commission.
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In response to a question by Representative Martin, Mr
Richie asserted that the Alaska Municipal League supports
public involvement.
Co-Chair Hanley reiterated that the ground work has been
laid. He emphasized that the problem has been identified.
There is a gap between recurring revenue and anticipated
spending at current levels. He acknowledged that the two
ways to close the gap are to cut spending or raise revenues.
He noted that there are many options within these tools. He
urged that the next step be taken beyond identifying the
problem.
Representative Kohring accentuated that establishment of a
long-range plan is a needed major step forward that will
help the legislature to resolve the fiscal crisis and
implement stability. He felt that emphasize should be
placed on reducing the budget through spending cuts.
Co-Chair Hanley noted that Annalee McConnell, Director,
Office of Management and Budget, Office of the Governor was
present at the meeting. He emphasized that the Office of
Management and Budget is willing to work with the
Legislature.
ADJOURNMENT
The meeting adjourned at 9:37 a.m.
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