Legislature(2007 - 2008)HOUSE FINANCE 519
03/11/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB54 | |
| SB256 | |
| Adjourn | |
| HB311 | |
| HB54 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 311 | TELECONFERENCED | |
| + | HB 54 | TELECONFERENCED | |
| + | HB 357 | TELECONFERENCED | |
| + | HB 414 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 11, 2008
2:58 P.M.
RECONVENED:
March 12, 2008
11:53:19 AM
CALL TO ORDER
Co-Chair Chenault called the House Finance Committee
meeting to order at 2:58:03 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Les Gara
Representative John Harris
Representative Mike Hawker
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
MEMBERS ABSENT
Representative Reggie Joule
ALSO PRESENT
Representative Mark Neuman; Karen Rehfeld, Director, Office
of Management and Budget; Bruce Botelho, Mayor, City and
Borough of Juneau; Win Gruening, Chair, Alaska Committee,
Juneau; Thomas Buzard, Self, Denali Rose Properties,
Juneau; Katherine Eldemar, Self, Juneau; Sharon Kelly,
Staff, Representative Mike Chenault; Pete Ecklund, Staff,
Representative Kevin Meyer; Karen Rehfeld, Director, Office
of Management and Budget
PRESENT VIA TELECONFERENCE
Paul Kendall, Energy For Our Homes, Anchorage
SUMMARY
HB 54 An Act relating to construction of a legislative
hall; and repealing provisions relating to
relocating the capital, the legislature, or any
of the present functions of state government.
HB 54 was HEARD & HELD in Committee for further
consideration.
HB 311 An Act making appropriations, including capital
appropriations, supplemental appropriations, and
appropriations to capitalize funds; and providing
for an effective date.
HB 311 was HEARD & HELD in Committee for further
consideration.
CSSB 256(FIN) am(efd fld)
An Act making supplemental appropriations,
capital appropriations, reappropriations, and
other appropriations; making an appropriation to
the senior benefits payment program; amending
certain appropriations; ratifying certain
expenditures; and making appropriations to
capitalize funds.
HCS CS SB 256 (FIN) was reported out of Committee
with a "do pass" recommendation.
HOUSE BILL NO. 311
An Act making appropriations, including capital
appropriations, supplemental appropriations, and
appropriations to capitalize funds; and providing for
an effective date.
2:59:51 PM
Vice-Chair Stoltze MOVED to ADOPT work draft 25-GH12007\C,
Kane, 3/8/08 as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
Co-Chair Meyer commented that the adopted work draft is a
stripped down version of the Governor's proposed capital
projects including federal funds and associated matches.
It will provide a base capital budget. He noted the Senate
had adopted a companion bill to HB 311. Co-Chair Meyer
invited Ms. Rehfeld to speak to the $42 million dollars
mostly for specified technology (IT) system-wide changes.
3:01:31 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed how the Administration
arrived at the proposed budget. In December 2007, the
Administration rolled out a two year plan, which
anticipated additional expenditures in FY08 to be funded
through the supplemental bills. Additionally, they had
requested the use of FY08 surplus for additional costs
associated with capital projects. Overall, the intent for
the FY09 budget was to keep total General Fund dollars
including the capital & operating expenditures with an
increase over FY08 of about 4.5%.
When the Administration moved through the budget process,
identifying areas that needed change for FY09, including
some "must haves" even though, all of the projects were not
included. There were many projects the Administration
hoped to include in the budget, but simply did not have
adequate General Funds. In FY08, the Administration
requested a total of $34 million General Fund surplus
dollars. She believed the intention was clear and included
th
in the capital budget bill with a June 30 effective date.
The total amounted to $29 million General Fund dollars.
For FY09, there are twenty-seven requested IT projects,
totaling $24 million of which, $2 million of which are
General Fund dollars.
3:05:30 PM
Representative Gara questioned if even though the IT
expenses are necessary, the Administration decided not to
place them in the operating budget because then they could
not meet the 4.5% limit funding for FY09. Ms. Rehfeld
clarified that the 4.5% increase was a benchmark number the
Administration attempted to achieve for FY09 capital and
operating budgets. Additionally, the Administration
requested the use of $34 million dollars from the FY08
surplus.
Representative Gara understood that the Governor was
attempting to reach a 4.5% budget increase projection and
in order to meet that goal was proposing use of funds
outside FY09 dollars. He emphasized that action creates an
artificial budget goal. Ms. Rehfeld countered that the
Administration has attempted to separate the two years in
isolation but rather roll out a comprehensive package
indicating expenditures and savings. She acknowledged that
clearly the Legislature will have opportunities to change
that plan.
3:08:13 PM
Representative Hawker identified the $2.66 million federal
fund sources & the $5.2 million IT funding source services.
He asked where those dollars originated from. Ms. Rehfeld
replied that fund capitalization occurred in the past
Enterprise Technology Services (ETS) fund.
Representative Hawker pointed out that the other funds
had not been reported as General Funds. Ms. Rehfeld
thought it could have originated from other funds used to
pay agency charge-backs. She added that a discussion of
the Information Services Fund (ISF) would require other
testimony. She commented that the capitalization had been
included in the operating budget and that the $5 million is
a General Fund expenditure. Representative Hawker pointed
out that nearly all of the $36.8 million dollars originated
from the General Fund. Ms. Rehfeld agreed.
3:09:54 PM
Co-Chair Chenault asked if the Administration had used the
master lease line of credit to pay for the IT projects.
Ms. Rehfeld deferred that question because the
Administration is not proposing to use that for the budget.
She did not know if it had been used in the past. Co-Chair
Chenault stated that the credit line is an issue currently
on the table and he wanted to know if it was intended to
use for IT projects.
Representative Gara asked if the Governor's proposal to pay
down Teacher Retirement System/Public Employees Retirement
System (TRS/PERS) debt was included in the operating
budget. Ms. Rehfeld responded that in the Administration's
proposal that expenditure comes out of the FY08 surplus.
Representative Gara stressed it is important to make
payment toward that debt and be included in the capital
budget this year. Ms. Rehfeld advised that the plan is to
pay down the TRS portion of the unfunded liability so that
it would reduce the annual contribution by about $43
million dollars. The Alaska Retirement Management (ARM)
Board supports that choice.
Representative Gara questioned if paying down the debt
could save long-term dollars for the State. Ms. Rehfeld
stated the goal is intended to relieve some of the pressure
on the direct contribution by paying down the unfunded
liability. In order to pay it down more quickly, the State
will need to be more aggressive, and some discussed options
are using Pension Obligation (P.O.) bonds.
3:12:49 PM
Co-Chair Meyer stated that HB 311 would be HELD in
Committee for further consideration.
3:13:03 PM
HOUSE BILL NO. 54
An Act relating to construction of a legislative hall;
and repealing provisions relating to relocating the
capital, the legislature, or any of the present
functions of state government.
REPRESENTATIVE MARK NEUMAN, SPONSOR, directed his comments
to the legislation. He stated that the relative isolation
of Juneau from the rest of the State is of concern to many
Alaskans, particularly at a time when the legislature has
come under increasing public scrutiny. Due to the
location, many Alaskans are unable to afford the airfare,
food and lodging to travel to Juneau to participate in the
process. He added, over 25% of Alaskans do not have access
to media outlets for watching Gavel to Gavel. The net
effect is that during the legislative session, legislators
remain isolated from the vast majority of Alaskans, being
accessible only to lobbyists and special interest groups.
HB 54 addresses the concerns voiced by Alaskans about
access. The legislation provides an opportunity for all
interested Alaskan entities to submit proposals to host the
Alaska State Legislature. The proposals will compete on
their merit and ability to meet the present and future
needs of Alaska.
Representative Neuman noted that the bill does not affect
the State Capital, only the Legislature. HB 54 would
create an environment, where the public and private sector
partner together to share the benefits of hosting the
legislature and the cost. He concluded his testimony,
indicating that the bill would improve access to the
legislative process for ordinary Alaskans by easing their
physical access and improving the serviceable nature of the
facilities.
3:16:47 PM
Representative Nelson asked what purpose Juneau would serve
without the Capital seat. Representative Neuman responded
that even if the Legislature is not located in Juneau, it
would still stand as the State Capitol. Many of the
current functions would remain in Juneau. He added that
the proposal does not preclude Juneau from participating in
the process.
Representative Nelson pointed out that presently, the
majority of the current Administration operates outside of
Juneau, pointing out that only one commissioner lives in
Juneau. Representative Neuman agreed, commenting that was
the Administration, not the Legislature. As members of the
Legislature, legislators are responsible to the people of
their districts. To allow access to those people in the
public process is critical.
Representative Nelson noted support for the public process.
She indicated that the 90-day session hinders that process.
She inquired the Mat-Su's participation rate in their City
Council and school board meetings. Representative Neuman
responded that there have been over 250 people at one
meeting.
Representative Nelson asked about the weekly assembly
meetings. Representative Neuman responded often times,
there is only standing room.
3:19:45 PM
Representative Gara asked how many people comprises
"standing room only". Representative Neuman suggested that
depends on the issue and that their assembly hall is not
that large.
Representative Gara suggested that Representative Neuman's
response to the number of people attending those meetings
were for the issues that are the most heated and emotional.
The question was how many "normally attend.
Representative Neuman responded, it is fair to say a good
amount participates. Representative Gara reiterated the
question of how many people attend a normal assembly
meeting. He noted that the question was asked and that it
was not answered.
Representative Gara understood that the bill proposed that
communities that want a bid to build the legislative hall
would have to offer a certain amount of acreage. He asked
where in the bill that language was located.
Representative Neuman replied that there is nothing in the
bill indicating that specifically. The bill does state
that if a community selects acreage on State land, the
State should attempt to facilitate a transfer of that land
over to that community. He supported the provision as it
would help communities expand their land base.
3:22:53 PM
Representative Gara asked where the verbiage regarding
acreage donation was located in the bill. Representative
Neuman referenced Section C, Page 4.
Representative Gara clarified that the bill moves only the
legislature not the capitol. Representative Neuman stated
that the intent of the bill is to allow communities to
submit a proposal to the Legislature for either approval of
construction for a legislative hall. The bill does not
stipulate that the Legislature will move.
Representative Gara asked if there could be a situation in
which Juneau proposes another site and the capitol moves
there. Representative Neuman responded that if Juneau
selected a different site, other than the existing
properties, it would be up to the community to undertake
the bidding procedure. There had been consideration of
reconstruction or renovation of the existing site.
3:26:00 PM
Representative Gara questioned if one of the purposes of
the bill was to get the capital closer to more people.
Representative Neuman responded that the entire purpose is
to allow communities to submit proposals for construction
of a legislative hall. He hoped to see a legislative hall
located on the road system. There are 60 legislators who
participate in that process with only three living in
Juneau. He acknowledged that the issue is popular with his
constituents.
3:27:40 PM
Representative Gara agreed that one of the considerations
is better access; however, there are arguments both pro and
con for moving the legislature. One of the pro arguments
is better access and that one could make a convincing case
for moving it to Anchorage where the bulk of the population
lives. However, moving it 40-miles away from Anchorage
does not give the majority of Alaskans any better access.
The bill as written has every chance of moving the
legislation to a place just as unavailable to the Alaskan
citizens as it is now.
Representative Gara urged that a determination be made that
the legislature not be moved to Eagle, Beaver or Willow,
because there is no better access to those small
communities. Representative Neuman pointed out that the
bill does state "anywhere on the road system"; it allows
communities to come up with a proposal, which they can be
submitted for consideration. Accessing Juneau because of
the weather and ferry system delays. He added, over half
of all high school students reside in Anchorage and those
students would like to participate in their legislative
system.
3:31:27 PM
Representative Hawker referenced the many comments made by
Representative Neuman as the legislation providing an
"opportunity" for communities to prepare proposals for a
legislative hall. As he [Representative Hawker] read the
bill, there is no language indicating the offering the
right to propose to communities. He understood the
language to provide the "solicitation of proposals for
construction of the legislative hall". He asked if it was
the intent of the sponsor that it was available to an
innovative adventure-development corporation to step
forward with a proposal. Representative Neuman said yes;
he intended to provide a proposal for any entity to partner
with a community, to submit a proposal.
3:33:06 PM
Representative Thomas questioned if the sponsor would
oppose language providing "the right of first refusal
amendment. He worried about the already depressed economy
in Southeast Alaska. He questioned why the sponsor would
strip one part of the State's economy to enhance another
area that is already thriving. He pointed out that in
Juneau, there are only three legislators that get to go
home at night and be with their family. Having the capitol
in Juneau, creates a "level playing field. He urged that
legislators take care of one another.
Representative Neuman stated that the bill is not an
attempt to place hardship on any community. He noted that
Juneau has over one million tourists a year pass through.
Every community in the State has its ups and downs and that
Kenai also is suffering these days. He questioned if it is
the Legislature's obligation to insure financial
responsibility to any one community.
3:36:54 PM
Representative Thomas responded that the Legislature did
that when they rallied behind Anchorage and Fairbanks by
not shutting down the military bases. Those communities
were protected through actions taken by the full
Legislature.
3:37:21 PM
Representative Crawford read the back-up material including
a conversation the sponsor had with a private developer and
determination of a location of 1,000 land acres. He asked
the profit motives to build on such a big and remote area
that would only be occupied for three months a year. He
questioned the inclusion of a judicial hall. He reiterated
his question regarding the profit motives of the developer.
Representative Neuman commented on the need for legislators
to introduce legislation that is reasonable". Instead of
just introducing the bill, he acknowledged that he had
moved through the steps to determine how feasible the idea
is. He had proposed the idea to the Mat-Su Mayor & the
community, which determined some acreage & proposed the
development rights to a developer, using that land. The
investment consideration was around $200 million dollars,
providing enough economic base to cover the cost of a
legislative hall for an economic base of $70 million
dollars. The remainder could go into housing projects &
high-scale homes to help the developer recoup their initial
development. The State would be able to lease the
legislative hall. It would be private investment money
going into a community, which could provide assistance to
the Mat-Su Borough for reduction in property values. He
maintained that there is a lot of investment consideration
for communities to utilize for a plan.
Representative Neuman pointed out that the Legislature is
in charge of the recall process and because of that, it was
recommended that the proposal provide for the capacity of a
judicial hall in case those types of proceeding need to
move forward.
3:42:28 PM
Representative Crawford asked clarification about the
intended community that would be built around the
structured legislative hall with regard to how the
developer would recoup their investment. He asked who
would be providing the infrastructure, roads & the sewer
systems. He questioned where the profit would come from.
Representative Neuman did not know. He only wanted to be
able to offer communities the option of submitting a
proposal.
Representative Crawford assumed that the conversation has
happened in which the developers assumed there was a
proposal possibility for this profitable option. He asked
where that that possibility currently is at.
Representative Neuman responded that he had meet with the
Mat-Su Mayor and local developers in his district.
3:44:32 PM
Vice-Chair Stoltze thanked Representative Neuman for his
work on the legislation. He mentioned the history and
passion of Juneau's capital position. He disputed comments
made by Representative Thomas. He asked if the bill was
proposing a plan like that previously proposed by Jim Clark
and Mayor Botelho. Representative Neuman responded that
the money that was spent on the previous plan came from the
City & Borough of Juneau and that he did not know if those
funds had been State subsidized. The bottom-line is to
determine if communities can come up with a plan to move
forward with the proposal.
3:47:24 PM
Representative Kelly elaborated on the "death by a 1,000
cuts", indicating that he was not passionate about moving
the capital. He inquired if members had determined that
the current building is an inadequate space. He mentioned
the good merit of the Fiscally Responsible Alaskans Needing
Knowledge (FRANK) initiative. He wanted to see the entire
issue and prices associated with a move. He pointed out
that there are many capitols located in the smaller towns
and that by placing it in the largest population center is
disconcerting because of the concentration of power.
Representative Neuman viewed the bill as Juneau's
opportunity to put the baby to bed. He pointed out that
the current building does not meet fire codes and that the
building is inadequate. The FRANK initiative attempts to
define and uncover the social and economic deficiencies for
the cost of moving the legislature. The proposed bill
recommends that a building be built by private industry
developers. He emphasized that the bill is about Alaska,
not about Juneau and/or the Legislature.
3:53:16 PM
Representative Gara advised that the issue is delicate
because moving the capitol will destroy the economy in
Juneau and that is not addressed in the bill. One option
would be to insure for 20-years, all State Office building
functions stay in Juneau even if the Legislature moves. He
questioned if consideration had been made in the bill on
how to minimize the damage to the local community.
Representative Neuman responded that maybe it wouldn't
move.
3:54:26 PM
BRUCE BOTELHO, MAYOR, CITY AND BOROUGH OF JUNEAU, testified
on behalf of Juneau in opposition to HB 54. He listed
issues in which, he disagreed. He clarified that the bill
is not a simple competition for a legislative hall. As
noted by Representative Crawford, the bill requires a
building that is designed to house not only the Legislature
but also the Judiciary Supreme Court including a chamber.
The another point of disagreement is that Juneau could look
at renovation of the current building. To examine the
specifications as directed by the Legislative Counsel for
the building, one would find that it would be an
impossibility to construct on the present site. Generally,
for any community to have the capacity to fund the
construction required for a new capitol, virtually
eliminates most communities' ability to bond. He compared
the proposed bill to HB 60, as submitted by previous
Representative Rokeberg, the precursor legislation from
which HB 54 was modeled.
3:57:57 PM
Mayor Botelho reported that HB 54, which purports to be a
competition for a legislative hall, is actually beyond
that. It achieves that result by what he assumes is the
most difficult part of the bill, repealing the FRANK
initiative. He added, 37 states have their capitols
outside of the major populated areas of that state.
Mayor Botelho commented on the point of agreement and the
source of commonality with Representative Neuman, quoting
from the Alaska State Constitution, Article 1, Sec. 2.,
Source of Government.
All political power is inherent in the people. All
government originates with the people is founded upon
their will only, and is instituted solely for the good
of the people as a whole."
Mayor Botelho elaborated that language is the source of
commonality in when Representative Neuman declares that all
parts of the State should be able to participate in the
legislative process. The difficult issue is the repeal of
the FRANK initiative. The point is that there is no issue
in the State's history over which the people of Alaska have
been called upon to exercise their sovereign power found in
the above listed section of the Constitution than over the
question of where their government should be seated. It
has been reaffirmed repeatedly, a three part proposition.
• The people have the right to know and approve in
advance, all costs of relocating the capitol or the
legislature;
• The people must be given the opportunity to make an
informed & objective decision on relocating the
capitol or the Legislature with all pertinent data
concerning the costs to the State; and
• The costs of relocating the capitol or legislature
will not be incurred by the State without the
approval of the electorate.
Mayor Botelho advised that HB 54 repeals the FRANK
initiative. He maintained that there will be costs to the
State and if the sponsor believes there will be no costs to
the State, why does the bill seek to repeal the initiative.
4:01:35 PM
Mayor Botelho discussed the reasons that the bill attempts
to repeal the FRANK initiative:
• While Section 2 of the bill does propose that the
option not require a lease payment, the provision
can be repealed or amended by any future legislature
or simply circumvented by using any financing
mechanism, which does not obligate the State through
lease payments.
• The bill authorizes the transfer of an unlimited
amount of State land to a municipality, at no cost,
as long as the selected proposal includes language:
"A site wholly or partially on State land".
Mayor Botelho noted that a transfer of State land for
relocation of the capitol or legislature is an
appropriation and will be a cost to the State, just as a
direct appropriation of money.
Mayor Botelho raised the question regarding that the true
cost of the proposal is withheld from the people until the
project is complete. He asked if Alaskans should be
deprived of an impartial review of what the costs are of
the move. He stated that the message being conveyed by the
bill is that the people should not be entrusted with the
power to know the costs.
Mayor Botelho urged members to determine any compelling
reason, to override the repeated expressions of the people
of the State through the FRANK Initiative.
Co-Chair Meyer mentioned that he preferred the proposal
over his own legislation as it offers any community the
option to participate in the process. He referenced
comments about the number of states that do not have their
capitol city in the largest populated areas of their state;
noting that in all states except Hawaii, citizens can drive
to their capitol city and that makes Alaska unique. He
disputed the message of the "cost to the State", explaining
that this is the "people's government" & wanted to know the
cost to the people, when airfare cost over $500 for each
trip out of Juneau. Most citizens of Alaska can not afford
that seat fare.
4:05:14 PM
Vice-Chair Stoltze asked clarification between the City &
Borough of Juneau, the taxpayers and the Alaska Committee.
Mayor Botelho responded that the City and Borough of Juneau
(CBJ) has regularly funded the Alaska Committee and the
activities undertaken by that Committee such as Gavel to
Gavel.
Vice-Chair Stoltze believed that some of the general
election ballot expenditures exceeded costs of running the
Gavel to Gavel program. Mayor Botelho responded that was
true during election campaigns in 2002.
Vice-Chair Stoltze argued that in 2004, CBJ attempted to
facilitate passage of measures that would make the
initiative process more difficult to put forward. He
mentioned the costs associated with the Cruise Ship
Initiative costing around $35 thousand dollars. Mayor
Botelho responded that the expenditures for Gavel to Gavel
far exceeds that amount every year.
Vice-Chair Stoltze questioned if CBJ had been involved in
the 2004 ballot measure to change the rules regarding
petitions. Mayor Botelho requested that Mr. Gruening from
the Alaska Committee answer questions about those
expenditures. The CBJ does make yearly appropriations to
the Alaska Committee.
Co-Chair Meyer asked if Alaska Airlines still offers the
Constituency Fare. Mayor Botelho replied they do. Co-
Chair Meyer asked if it was for only one trip per person.
Mayor Botelho understood that was correct.
Vice-Chair Stoltze stated that there had previously been a
measure proposed that would require more voter
participation & major expenditures on capitol location
initiatives. Mayor Botelho advised that the voice of the
people came through in the FRANK Initiative. That measure
was again before the voters in 2002 and that 77% of the
electorate turned the proposal down.
Vice-Chair Stoltze emphasized that the people of the State
opposed a measure to expand the FRANK Initiative for
applying to any major expenditure. Mayor Botelho
acknowledged that the City and Borough of Juneau thought it
made no sense to require a vote of the people to decide
whether the building should be relocated.
4:09:42 PM
Representative Thomas asked if the building designed in
Juneau several years ago, would met the requirements
proposed in HB 54. Mayor Botelho replied it would not as
it did not provide for the Supreme Court to be located in
the same building.
Representative Thomas inquired the costs associated with
that that building. Mayor Botelho noted that CBJ had
directed the design consultants to look at a building that
would cost approximately $100 million dollars and that was
costs from three years ago. At that time, the consultants
anticipated that the cost of design & building in Alaska
would supersede those costs.
In response to comments made by Vice-Chair Stoltze,
Representative Gara noted that if someone attempted to do
something as proposed in the bill, decimating a community,
he would expect that community to spend local monies to
protect it from happening. He applauded the actions taken
by Juneau in the past. He maintained, it would be a
mistake to take a capitol that has been labeled
inaccessible and move it to a place that is still
inaccessible and requesting money to do that. There are
many arguments for and against moving the legislature but
the biggest argument against it is the dislocation that
would happen to Juneau.
Mayor Botelho added, it is important to look at this as not
only Juneau but the entire Southeast region. Much of the
activity that happens in Southeast Alaska has direct ties
to Juneau.
4:12:49 PM
Representative Gara asked the history of votes for and
against the move of the capitol.
Mayor Botelho relied on information provided by the Alaska
Division of Elections:
• 1960 votes for 18,865, opposed 23,972
• 1962 votes for 26,542, opposed 32,325
• 1974 - calling for the construction of a new Alaskan
city, which passed for 46,659, opposed 35,683
• 1976 That vote presented the question of where the
capitol should be moved, choosing Willow and received
56,219 votes
• 1978 - General election, the FRANK initiative arose.
The proposition was that there should be a termination
of all bondable costs presented and approved by the
voters. The requirement passed, for 69,414, oppose
55,253
• Simultaneously, there was the general obligation (GO)
bond before the voters, which was rejected with
supporting votes of 31,491 & opposing 88,783
• 1982 The issue to relocate & considering the costs,
determining if the capitol should be moved to Willow.
The vote for was 91,049, oppose 102,083
• 1994 - The initiative called to move the State Capitol
from Juneau to Wasilla. The votes for were 96,398,
opposing 116,277.
Co-Chair Meyer asked that a copy of the above referenced
material be submitted to Committee members.
4:17:02 PM
WIN GRUENING, CHAIR, ALASKA COMMITTEE, spoke in opposition
to HB 54. The Alaska Committee, which is a volunteer, non-
profit group, has been dedicated to improving & enhancing
Juneau as Alaska's capitol city. He recognized that while
citizens of Alaska have repeatedly voted down efforts to
move the capitol or legislature, the issue in the minds of
some, still has not been settled. The Alaska Committee
does take seriously the issue of capitol access. Those
efforts are the reason for many of the improvements to
access and facilities. He acknowledged that there are
additional improvements that can be made to make Juneau a
more attractive capitol. He noted that CBJ has funded many
initiatives that have improved access to the State Capitol
such as Gavel to Gavel, discounted air fares, pier & port
improvements, as well as donations of real estate and
buildings for use by the Legislature.
Mr. Gruening maintained that technology has been and will
continue to be the most efficient and least expensive way
for constituents to have access. That is why Gavel to
Gavel coverage has continued to be the flag-ship program
for accessing the capitol. Approximately 60% of the $535
thousand dollars spent on the program is supported by the
community of Juneau; no State funds are used. Mr. Gruening
stated that technology, not relocation of buildings, is the
key. The intent is to begin video-streaming all committee
hearings, which will require fixed cameras in all the
committee rooms. Unfortunately, HB 54 takes the opposite
view and purports to relocate government & the capitol by
relocating the capitol building & all the government
functions associated with it. The sponsor's stated intent
is to "address the concerns expressed by Alaskan's about
access & the relative isolation of Juneau". It is
difficult to see how Juneau could possibly win the bid.
4:22:45 PM
Mr. Gruening noted that the operation and maintenance costs
of funding a new building have not been identified. The
decision on something of this magnitude, will be decided
under the bill by a small committee of 14 people in the
legislature with no opportunity for the public to review
the true costs. The people's right is seeking to be
repealed in HB 54. He stated the bill was a blank check
for a full capitol move and that ultimately, the
legislation would economically impoverish Juneau and
Southeast Alaska. The issue is divisive & controversial.
He urged that the bill be held in Committee and that the
Committee instead consider less expensive alternatives that
are available.
4:24:28 PM
Vice-Chair Stoltze asked about the Alaska Committee's
involvement on Ballot Issue 1 in 2004. Mr. Gruening
responded that the amount of money spent on that issue was
not large. He noted that the Committee took the position
that getting signatures in only downtown Anchorage was not
representing the views of the entire State when attempting
to pass an initiative. A belief continues to exist that it
would be more democratic to guarantee signatures were
gathered from all over the State, not just one area. The
Alaska Committee did back that legislation.
Vice-Chair Stoltze expounded that the dollars submitted by
the Alaska Committee was the "only real money" in the
campaign and that it was not a small amount. He maintained
that there was involvement by the Alaska Committee in that
vote, now making it more difficult for citizens to "do
initiatives". Mr. Gruening argued that the Alaska
Committee made the process more democratic.
4:26:49 PM
Representative Gara deliberated that the amount of money
that the City & Borough of Juneau has to spend every time
the capitol move issue comes up, is substantial. He agreed
that the stronger the public access is in Juneau, the less
often the issue will come forward. He urged consideration
of changing the Gavel to Gavel program in offering
interviews during the quiet times to make the process more
educational. He did not think enough people watch the show
and that it could be improved.
Mr. Gruening pointed out that recently Gavel to Gavel went
into full coverage with the advent of 360 North. It is now
a full time station, year-round. The program coverage will
be expanded and other things will be shown besides
legislative coverage. He explained that coverage must be
a-political.
Representative Gara hoped to see it becoming more
educational, addressing politics in the Legislature,
helping to make the capitol process more accessible.
4:30:48 PM
THOMAS BUZARD, SELF, DENALI ROSE PROPERITIES, JUNEAU,
testified in opposition of HB 54. He stated that it does
not make sense to bolster the economy of one community at
the expense of another.
Mr. Buzard encouraged that the focus of the Legislature be
on the development for the State of Alaska. He pointed out
that access to Juneau is better than ever. If the true
concern is about access, he urged that the road be built.
The health of Southeast Alaska continues to erode as the
issues of moving the capitol arise and real estate values
drop each time. The people that come on cruise ships only
provide a small fraction of the economy. He maintained
that the vote has come before the people and time after
time, they vote not to spend State dollars for moving the
capitol; over 77% of the electorate indicated that the
FRANK initiative be left in place.
4:35:09 PM
Representative Gara reiterated that he was sympathetic to
the argument of moving the capitol. He identified that the
access to Juneau is not good and that the road would not
help that. No one will drive that road in the winter. The
point to making the capitol accessible is Gavel to Gavel
and vibrant telecommunications. He maintained that driving
24 hours will not make Juneau more accessible. Getting in
and out of Juneau is difficult. There are more important
issues that need to be addressed but access should not be
minimized. Mr. Buzard understood the difficulty that
legislators go through to maintain a life outside of
Anchorage. Juneau is not blind to that. The argument does
remain with a established economic base because of the
hundreds of millions of dollars that the State would be
spending. He concluded, many people already do not trust
government and would be appalled eliminating the law of the
FRANK initiative.
4:39:19 PM
KATHERINE ELDEMAR, SELF, JUNEAU, testified that she does
watch Gavel to Gavel every day. She suggested that
government be here for the people, commenting that
individual responsibilities and family obligations do not
permit her to be at the Capitol everyday, so she depends on
Gavel to Gavel. She agreed that Alaskans should have
access to government. She recommended increasing the
coverage. She maintained that moving the capitol from
Juneau, would break up families and communities. She urged
that the video-conferencing capabilities be increased in
the rural communities.
Ms. Eldemar pointed out that HB 54 does not identify the
resources that will be utilized with passage. She stressed
that the State's resources" are finite and should be spent
on more pressing issues. In the rural communities, there
are people just attempting to stay warm during the winter.
She urged that all Alaskan children have adequate education
instead of neglected buildings and insufficient staffing.
She urged the use of Alaska's resources being spent on
something other than HB 54.
4:44:58 PM
Ms. Eldemar recommended setting aside the drive to move the
capitol and sit quietly as a parent & member of all of
Alaska. The challenge rests with the leadership to address
needs in the rural communities throughout the State. HB 54
would take the State off the course of helping all of
Alaska.
4:47:05 PM
PAUL KENDALL, ANCHORAGE (Testified via teleconference),
requested that his concern be addressed with the obvious
problems for everyone. He emphasized that technology is
not the answer & that access should not be divided. He
pointed out that the 15% of the population in Juneau is a
small microcosm of the entire State's population. He
claimed that the State has taken care of Juneau for too
many years, which he believes is a self indulgent
community. He attempted to contain his discontent. He
stated that Juneau does not have the dignity to satisfy the
statewide needs for accessibility. Mr. Kendall continued
testimony in support of moving the capitol out of Juneau to
an Anchorage area, which he maintains has over 85% of the
State's population.
4:54:46 PM
PUBLIC TESTIMONY CLOSED
HB 54 was HELD in Committee.
RECESSED: 4:57:11 PM March 11, 2008
RECONVENED: 11:53:19 AM March 12, 2008
11:53:55 AM
CS FOR SENATE BILL NO. 256(FIN) am(efd fld)
An Act making supplemental appropriations, capital
appropriations, expropriations, and other
appropriations; making an appropriation to the senior
benefits payment program; amending certain
appropriations; ratifying certain expenditures; and
making appropriations to capitalize funds.
Co-Chair Meyer MOVED to ADOPT work draft 25-GS2009\W, Kane,
3/10/08 as the version of the bill before the Committee.
There being NO OBJECTION, it was adopted.
11:54:54 AM
SHARON KELLY, STAFF, REPRESENTATIVE MIKE CHENAULT, stated
that the House draft contains $4.415 billion general fund
dollars, a reduction of $5.313 million dollars in federal
funds and a reduction of $40.868 million dollars other
funds.
11:56:05 AM
Ms. Kelly pointed out the two packets of available
information, one labeled Total House changes, including a
summary sheet of the bill and changes from Sec. 1-32,
excluding Sec. 13-15. There is a separate packet showing
Sec. 13-15. (Copies on File).
There are five changes to the operating section of the
bill.
• Sec. 1-3 Salary contract funding. The draft
adds appropriations to cover the Non Covered
employees in the Executive, Judicial and Legislative
branches. Those increases are normally tied to the
Supervisory Unit. The increased amount to $9.986
million general fund dollars.
• Sec. 4-6 Enterprise Technology Services (ETS)
adjustments, no changes were made in the work draft.
• Sec. 7-9 The House draft adds:
(A) - Department of Revenue adds $100 thousand
dollars for implementation of HB 2001. The
Department's requested amount was reduced
because the master auditors have not been hired
yet.
(B) Department of Transportation and Public
Facilities requested dollars to cover increased
fuel utilities, lease and commodity costs. The
funding amount was $1.875 million dollars.
(C) Department of Transportation and Public
Facilities requested $393.9 thousand dollars to
cover arbitration settlements.
(D) University of Alaska was funded at $1.390
million dollars to cover increased fuel costs.
The University requested general funds to cover
100% of fuel increases, however, the increment
funds 60% of the amount requested in the
supplemental and funds 80% of the fuel costs.
The FY09 funding requests will fund fuel at the
appropriate ratio between General Fund and
other University fund sources.
11:57:46 AM
Representative Kelly questioned the numbers used to
determine University fuel costs. Ms. Kelly advised they
are about $1 million dollars short on the request.
Representative Kelly asked if that was the final decision.
Ms. Kelly explained that was the determination; however,
there are other supplemental items coming up in the capital
budget.
11:59:24 AM
PETE ECKLUND, STAFF, REPRESENTATIVE KEVIN MEYER, addressed
the capital portions of the bill.
• Sec. 10-12 A $1.1 million dollar addition to
Department of Commerce, Community and Economic
Development for climate change grants ranging from
$50-$100 thousand dollars to help communities plan
for erosion problems.
• A similar request for $230 thousand dollars was made
by Department of Environmental Conservation to help
fund the Governor's climate sub-cabinet, created
through an executive order (EO). The House is
working with the Senate to have them include $184
thousand dollars to be added to the operating bill
as a one time item.
12:00:12 PM
Mr. Ecklund continued the overview of capital items. He
explained that Co-Chair Meyer's office went over the
criteria and guidelines the Governor used to determine the
vetoes made in last year's capital budget from a letter
dated 2/8/08. All items were reviewed from that veto. The
office attempted to be as consistent as possible in
applying the guidelines to the vetoed projects. A narrow
and conservative view was taken on the projects being added
to the draft to guarantee that they met those guidelines.
He admitted the exercise was subjective.
Mr. Ecklund continued. All House members were invited to
discuss projects in their districts & how they met the
Governor's guidelines. Some project titles were slightly
modified & changed the recipients of school district
projects. Some dollar amounts were modified downward as
appropriate. From that point, the committee substitute was
drafted.
The total added by the House is $69.227 million general
fund dollars and $750 thousand federal funds.
12:02:54 PM
Mr. Ecklund pointed out additional funds added to the
following departments:
• Department of Environmental Conservation
reappropriation requested by the Governor for $17.19
million dollars for village safe water funds. A new
account was established, sweeping the General Fund,
federal funds and the Alaska Housing Finance
Corporation (AHFC) funds from projects that have
been completed or cancelled. The Department will
use the following method to redistribute those
funds, with previously legislatively appropriated
projects, with no change in scope. The oldest came
first & prioritized in the same year as before.
• The effective dates have been added back into the
bill in Sec. 36-38.
12:03:42 PM
Representative Gara summarized that the capital budget
items listed in the proposed budget total $69.977 million
dollars. He asked how much more that amounted to from what
the Senate had proposed. Mr. Ecklund replied that it was
$17.5 million dollars higher than the Senate number.
Representative Gara inquired if that information had been
listed in the packet. Mr. Ecklund stated in was included
in the distributed handout. (Copies on File).
Representative Gara asked if there was a list. Mr.
Ecklund explained that the packet contains three various
scenarios. The information sought by Representative Gara
is contained in the "House Changes" material, indicating
all projects added by the House.
12:04:31 PM
Co-Chair Meyer noted through Page 14, includes the House
additions; after Page 14 are House & Senate combined.
Representative Gara asked if there was a comparison between
what the Senate proposed and that of the Governor. Mr.
Ecklund advised that the Governor did not propose any of
the listed items. Discussion followed between Mr. Ecklund
and Representative Gara regarding the crafted projects.
12:06:15 PM
Co-Chair Meyer clarified the approach taken. The only
items being reconsidered in those sections are items vetoed
by the Governor last year. Last year, the Governor vetoed
about $200 million dollars of projects. Of that, the major
portion was from the Rail belt Energy Fund monies. Of the
$69 million, $50 million were projects vetoed that the
Senate also supports reconsideration of. The House
determined other projects not included by the Senate, but
still meting the Governor's guidelines. The House proposed
draft does include those items.
12:07:51 PM
PUBLIC TESTIMONY CLOSED
12:08:32 PM
Representative Gara discussed inclusion of the $10 million
dollar port expansion project. He asked how that number
had been determined. Co-Chair Meyer noted the amount had
been submitted by the Municipality of Anchorage (MOA) and
that it had been vetoed last year by the Governor. He
emphasized the importance of the Port of Anchorage to the
entire State, pointing out that 80% of the goods sold
throughout Alaska come through the port. The program is
matched through the federal government. The port needs to
be prepared in order to be able to address the pipe for the
Gas Pipeline.
Representative Gara reiterated how the specific amount had
been determined. He pointed out that there have been no
hearings since the project was vetoed. He requested a
determination of the actual amount before it is awarded.
Co-Chair Meyer reiterated it would be a federally matched
option. He had faith that Mayor Beguich and the Anchorage
Assembly had placed the item as their #1 priority. He e
did not question the request. The project is important to
the entire State.
12:11:52 PM
Vice-Chair Stoltze recalled that after the veto, the Mayor
commented that the funding is a critical part of supporting
the war effort & our national security. The port project
was ratified in agreement and was included in the Senate
approach.
12:13:11 PM
Representative Gara reiterated the question regarding the
correct funding amount for the port project. He realized
the port is an important project; however, there has been
no analysis that the $10 million dollars is the correct
amount. He voiced concern when comparing that number to
other necessary State funding projects.
Co-Chair Meyer argued that an email had been sent to all
member's for submitting their considerations of important
issues. He stipulated that the concern should have been
discussed last week.
Representative Gara maintained that budget issues must be
discussed publically rather than inside the Chairman's
office. Co-Chair Meyer fully supported the request by MOA,
emphasizing that the issue has had public hearings. All
the office meetings had been scheduled to review projects.
He elaborated that the Committee should not now be
dissecting this issue. He did not want to see the process
held up. He added the blue book, distributed to all
members's, highlights all the detailed items for the
Anchorage projects.
12:15:59 PM
Representative Gara ascertained that the requested item had
not shown up in any public forum this year; he wanted to
see a hearing on the issue. The item had not been
presented in a House Finance Committee bill or meeting
until today. He realized that it is a priority of MOA and
that he does support the project. He pointed out that when
he requests money for projects, they are analyzed closely,
and he maintained that all project requests should also be
as closely considered.
12:17:26 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
noted that there are many pieces to the supplemental
program, particularly the Senior Benefits Program and
requested by the Administration for early consideration.
She indicated the Administration's concern with last year's
vetoed projects being included in the current bill. The
Administration has attempted to work diligently with both
bodies to come up with an overall spending plan for the
next two fiscal years.
Ms. Rehfeld understood the legislative frustration with the
Governor's vetoes last summer and hoped that the
Legislature and the Governor could continue to work
together on determining an overall level of spending.
Co-Chair Chenault noted the Legislature has been attempting
to work with the Administration and will continue to do
that through the process.
12:19:33 PM
Representative Gara inquired if each project had been run
individually through the Governor's Office. Ms. Rehfeld
responded that the Administration had not addressed
specifics of any project & whether or not they would meet
the Governor's criteria. The Administration is attempting
to determine the appropriate level of spending & if that
can be agreed upon, they realize there will be changes and
additions to the Governor's proposed budget. She hoped to
come to agreement on the overall size of the budget and not
the individual projects.
Representative Gara addressed identifying the overall level
of spending and how much the Governor would accept in terms
of the extra capital projects. Ms. Rehfeld responded that
there has been no discussion about specific dollar amount
of legislative discretionary projects. She maintained the
need to determine an overall budget target.
12:22:08 PM
Representative Gara asked if the Governor had been
presented information on the port expansion since the veto
was made. Ms. Rehfeld noted that the request originated
from Governor Sheffield and was in the amount of $20
million dollars a year, for five years. Governor Palin
included $10 million general bond dollar proposal in the
FY09 budget. She did not know if the Legislature had
determined from where to take the funding.
12:23:25 PM
Representative Nelson noted she supports the proposed
supplemental bill, which she believes is appropriate. The
bill includes a large amount of money for the Revenue
Sharing Program, the weatherization program and money for
the heros list to those communities needing to cover
increased retirement costs. The vetoed capital projects
from last year's budget were unanticipated and
consequently, the proposed supplemental is an unanticipated
budget dealing with unforeseen costs and disasters. Many
communities have bedded the recommendations out, including
public hearings, prioritizing their requests. She added
that for many of the projects, time is of the essence
especially for those in remote Alaska.
Representative Nelson added that the current Administration
is on of the most powerful by Constitution in the Nation.
Currently, the Legislature is in a 90-day session and
constitutionally, the Legislature is the appropriating
body. The Legislature recognizes that there is a large
surplus and that the State has a lot of unmet needs in
terms of major maintenance and capital projects. It is
appropriate to spend some of that money for the life,
health, education and safety needs within the State. She
reiterated her support for the proposed bill.
12:26:36 PM
Representative Hawker addressed the changes made in the
Senate version adding $3.6 billion dollars into the budget
reserve accounts. He asked if the Administration was
supportive of those appropriations into savings. Ms.
Rehfeld commented that the Governor is comfortable with the
idea of saving. The CBR is an important element to any
savings plan. The Governor proposed last year that the
entire surplus go into the CBR; however, there is a broader
issue with the addition of many significant pieces. There
exists a lot of dynamics within the legislation.
12:28:42 PM
In response to Representative Hawker, Ms. Rehfeld clarified
that the $2.6 billion dollar appropriation into the CBR is
an area she believed the Governor would be supportive of.
They had not discussed the use of the Statutory Budget
Reserve.
Representative Hawker inquired about the Administration's
position on the $300 million dollar appropriation to the
Weatherization Program through Alaska Housing Finance
Corporation. Ms. Rehfeld advised that the Administration
has had conversations with Alaska Housing Finance
Corporation and that there is a great deal of support for
increasing funding available for those programs. She could
not guarantee that $300 million dollars is the number that
the Governor would support.
12:31:04 PM
Representative Kelly noted that the combination of the $300
million weatherization in addition to the annuity revenue
sharing, brings the State close to ½ billion dollars. He
asked if the Administration would prefer that the savings
be increased by that amount. Ms. Rehfeld clarified the
need for a "bigger picture discussion". Energy is one of
the big considerations including the Energy Fund and a
funding source for Revenue Sharing. The Governor does
support the pieces of the bill, but wants to address the
overall procedure.
12:32:58 PM
Co-Chair Meyer agreed with comments made by Representative
Nelson that the supplemental request is large @ $4.3
billion dollars, noting that the key is the $3.6 billion
dollars appointed for savings. He added that last year,
when the capital items were vetoed, the State did not have
the extra oil tax dollars. The State now is in a different
environment.
Representative Thomas echoed the comments made by
Representative Nelson. He identified the surplus money
available to the State. He reiterated the inconsistencies
where vetoes were made last year. The State is ahead of
revenue expectations.
12:36:28 PM
Representative Nelson understood that the proposal is large
and that the State is constitutionally required to
reimburse the CBR. In previous comments, she expressed
that the Legislative Branch is the appropriating body; she
hoped that the two bodies could get past the disagreements
and be non-adversarial. The House has been the Body that
takes a more temperate approach to resolving conflicts.
12:37:40 PM
Representative Gara agreed that there are projects that
meet the health and safety guidelines issued by the
Governor, but that there are some that do not. He
maintained that there is a disconnect in the budget when
not funding certain operating budget items and then over-
funding in the capital budget. He maintained that the
decisions are a matter of leadership, emphasizing that
there are important projects in the State that do not get
funded. He urged that priorities be ranked.
12:39:15 PM
Representative Nelson MOVED to ADOPT Amendment 1. Co-Chair
Chenault OBJECTED.
Agency: Department of Commerce, Community and
Economic Development Municipal Grants AS 37.05.315
Project: Platinum Solid Waste Landfill Design & Build
Amount: $732,000
Funding Source: General Funds
Representative Nelson noted that the Department of
Commerce, Community and Economic Development, Project of
Platinum Solid Waste landfill design and build (HD38) in
the amount of $732 thousand general fund dollars. She
explained that the new landfill is needed to serve both the
community and the new $30 million seafood processing plant
that coastal Villages Region Fund (CVRF) is building in
Platinum construction of the plant is already underway,
with the facility for 126 processing employees completed in
2007. The new plant is expected to open for operation in
2009. The plant is largest capital project in the 15-year
history of the Western Alaska community Development Quota
(CDQ) Program, funded entirely by CVRF.
Representative Nelson WITHDREW Amendment 1.
Co-Chair Chenault realized that the issue needs to be
addressed as it provides an opportunity for jobs in rural
Alaska. He offered to continue to work with Representative
Nelson.
12:41:27 PM
Representative Nelson MOVED to ADOPT Amendment 2. Co-Chair
Chenault OBJECTED.
Representative Nelson explained the amendment.
Co-Chair Chenault pointed out that there are a number of
communities that are having similar problems; there are
discussions happening with the Corps of Engineers for
federal funding. He noted he is working with
Representative Joule at this time.
Representative Harris agreed that the bill was not the
appropriate vehicle for addressing the problem. The
Legislature has attempted to deal with the erosion issues
for quite a period of time. He stated that the Corps of
Engineers is putting the project out to bid and is looking
for matching funds. Evacuation of the areas will happen
sooner or later. He recommended inclusion of the concern
in the capital budget.
Representative Nelson stated that recognizing the strong
sense of cooperation and the money placed into the
supplemental for Department of Commerce, Community and
Economic Development grant, she WITHDREW Amendment 2.
12:46:10 PM
Representative Crawford MOVED to ADOPT Amendment 3, 25-
GS2009\VA.1, Kane, 3/11/08. Co-Chair Chenault OBJECTED.
Representative Crawford explained the amendment would do
away with the appropriation to the Statutory Budget Reserve
and places it instead into the Constitutional Budget
Reserve (CBR).
12:48:56 PM
Representative Crawford read from the statute that
establishes the budget reserve fund:
"There is established as a separate fund, the State
treasury, the budget reserve fund. The budget reserve
fund consists of appropriations to the fund, money
received by the State that is subject to the
appropriation limit under (b) of this section and
exceeds that limit may be appropriated to the budget
reserve fund."
Representative Crawford maintained that the proper place
for those funds is the CBR and encouraged that the dollars
be placed into that fund. Additionally, he added his
support to the legislation proposed by Representative
Samuels.
Co-Chair Chenault clarified that it has been proposed to
place the $1 billion dollars into the Statutory Budget
Reserve and $2.6 billion dollars in to the CBR. He
maintained that any dollars not spent through the budgeting
process are true savings. He understood the
complications of withdrawing money from the CBR with the ¾
voting system. He stated that there are two savings
accounts within the CBR; one short term and one long term,
which allows the opportunity to look further forward in the
budget process. Co-Chair Chenault maintained his OBJECTION
to Amendment 3.
12:54:54 PM
Representative Crawford hoped there could be more
discussion because of the long term effect for the State.
He characterized the Statutory Budget Reserve (SBR) fund as
a deferred spending account. He emphasized that the CBR is
a fund that is better thought-out in how to administer the
fund. Only taking 25% a year is problematic. He asked if
the fund would continue infinitely.
Co-Chair Chenault pointed out that if the Legislature is
only able to withdraw 25% of the SBR in one year, perhaps
the entire amount should be placed into that fund, because
if left in the CBR, 100% can be accessed in any given year.
Representative Gara advised that it does not matter what
the SBR states, it is a statute and no one can tell the
Legislature how to spend their money next year. Any
account is only advisory and is non-binding. He stated
that Amendment 3 is correct, which proposes placing $3.6
billion dollars into the CBR, which is where it would stay
because it could not be accessed without a super majority
vote. By placing those dollars into the SBR, the money
could be withdrawn next year. He supported the
recommendation made by Representative Crawford.
12:58:28 PM
A roll call vote was taken on the motion.
IN FAVOR: Nelson, Crawford, Gara
OPPOSED: Stoltze, Thomas, Harris, Hawker, Kelly,
Chenault, Meyer
Representative Joule was not present for the vote.
The MOTION FAILED (3-7).
12:59:14 PM
Representative Gara MOVED to ADOPT Amendment 4. Co-Chair
Meyer OBJECTED.
Representative Gara explained that the amendment emphasis
the previous point made that there are a lot more important
things that the State could accomplish with directed
dollars in the capital budget. He pointed out that there
are 48 other states that provide more aid to people
attempting to get vocational education than Alaska does.
Roughly 70% of Alaska kids do not go to college. He
believed that some of the surplus money should be used for
creating opportunity instead of putting it into capital
projects. He maintained that some of the proposed projects
are not public safety, health or education related.
The amendment proposes deleting $2.5 million dollars for
the Port of Anchorage expansion and placing those dollars
into the Department of Education and Early Development,
Alaska Postsecondary Education Commission, (new) Alaska
Advantage Education grants. He added that the Alaska
Student Loan program provides a $2.5 million dollar
dividend that should stay within the corporation for
financial aid for Alaska students. That is how it was
proposed by the Governor. He pointed out that Co-Chair
Meyer's maintains those dollars should instead be placed
into the Capital budget.
1:01:14 PM
Co-Chair Meyer responded that ASLC dividend as well as the
dividends form the other statewide corporations have been
placed into the capital budget versus operating budget
because once they are in the operating budget, they become
ongoing funding obligations. The dividend amounts are not
known from year to year & are typically used in the Capital
budget. Amendment 4 places them into the Department of
Education and Early Development, Alaska Advantage Education
grants. Representative Gara pointed out that Alaska is the
only state that does not provide money to low income
students. Co-Chair Meyer argued that Alaska is the only
state that pays a Permanent Fund Dividend (PFD), which can
be applied to State tuition, which [Alaska University
tuition] is in the lower third nationwide.
Co-Chair Meyer mentioned the top-ten scholars program, an
incentive program not discriminating between economic
classes. He maintained that keeping the dividends in the
capital budget was appropriate.
1:03:31 PM
Representative Nelson noted that she supports the intent of
the amendment, but maintained that the budget under
consideration is the supplemental budget for unanticipated
costs of the State. She stated she would be a no vote on
the amendment.
Co-Chair Chenault noted that he had been working with
Representative Gara on the issue. He pointed out that 300
low income college students did receive funding, which is
24% of the money spent in that program. The remaining
dollars went to students over 25 years old. He noted that
his original intent of the advantage program was for the
younger students, not those over 25 years of age. He
agreed that the program is worth discussing and probably
worth funding through a different vehicle.
1:06:39 PM
Representative Crawford agreed that both young & old
students need help in pursuing their college education.
Every year there are students in the scholars program that
have to drop out because it only pays the tuition and not
other living costs. He concurred that it is not correct
that a State such as Alaska, does not do more than any
other state in the Union for their student's educational
concerns.
1:09:08 PM
Representative Gara addressed the dividends coming from the
Alaska Student Loan Program, which have always totaled more
than $1 million dollars; that is not a reason to place it
in the capital budget every year. He pointed out that 90%
of the students that qualified for the low income aid did
not get it. There is not the funding available to provide
an education option to most low income students. He
maintained that a $2.5 million dollars grant dedicated to a
specific class of students would be a great enhancement.
He added that 75% of the vocational education in the State
is provided at the University.
Representative Gara WITHDREW Amendment 4.
AT EASE: 1:11:45 PM
RECONVENE: 1:12:20 PM
Co-Chair Meyer MOVED to REPORT HCS CS SB 256(FIN) out of
Committee with individuals recommendations. There being NO
OBJECTIONS, it was so ordered.
HCS CS SB 256 (FIN) was reported out of Committee with a
"do pass" recommendation.
ADJOURNMENT
The meeting was adjourned at 1:12 P.M.
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