Legislature(2019 - 2020)ADAMS ROOM 519
02/14/2020 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB234 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 234 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 14, 2020
1:33 p.m.
1:33:17 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:33 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Jennifer Johnston, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Kelly Merrick
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
MEMBERS ABSENT
Representative Adam Wool
ALSO PRESENT
Nils Andreassen, Alaska Municipal League, Juneau
PRESENT VIA TELECONFERENCE
Jim Williams, Fairbanks North Star Borough, Fairbanks;
Charles McKee, Self, Anchorage; Cris Eichenlaub, Self,
Eagle River; Valerie Therrien, Fairbanks City Council,
Fairbanks; Walt Weller, Mayor, Pelican, Pelican; Norm
Carson, President, Chamber of Commerce, City of Pelican,
Pelican; Herman Morgan, Self, Aniak; Tom Brawnd, Self,
Sutton.
SUMMARY
HB 234 APPROP:SUPP; REAPPROP; CAP; AMEND; CBR
HB 234 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 234
"An Act making supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; capitalizing funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
1:34:46 PM
^PUBLIC TESTIMONY
1:34:51 PM
NILS ANDREASSEN, ALASKA MUNICIPAL LEAGUE, JUNEAU,
appreciated the content of the supplemental budget. He
reported that Alaska Municipal League (AML) members had
identified three priorities that were not included in the
bill: school bond debt reimbursement, the Alaska Marine
Highway System (AMHS), and community assistance. He
discussed that funding for community assistance had been
vetoed from the FY 20 budget, which meant the FY 21 payment
would be reduced by $10 million on July 1. He shared that
the cut would have an impact on every community throughout
the state. The cut meant $1.6 million less for local
governments in the Interior, $4.1 million less for
Anchorage, $1.7 million less for Mat-Su, and $600,000 less
for western and northwest regions. The cuts directly
impacted the ability for local governments to meet the
needs of residents and to provide services the state did
not provide.
Mr. Andreassen addressed the reduction to school bond debt
reimbursement, which meant local governments were
challenged to figure out how to repay the money that they
thought the state was going to cover. Districts were
responding to the cut differently and some were paying from
maintenance funds, which meant schools were not being
maintained. He reported there was less funding available
for school major maintenance, which had no funding in the
FY 21 budget. There was an erosion of ability for local
governments to respond to school bond debt reimbursement.
Some districts had shifted funding from other pots of money
where they could, and others had increased property taxes.
For example, the Municipality of Anchorage had discussed
potential property tax increases to help cover the cost. He
encouraged the legislature to include full funding for
school bond debt reimbursement in the supplemental budget.
Mr. Andreassen stated that AMHS had been the topic of
conversation since the beginning of session. He shared that
AML was committed to long-term sustainability and changes
within the system, but it also needed to respond to its
members' sense of urgency and the need they were currently
feeling. Residents were without groceries and fuel, freight
was not going in or out, economies were being stifled,
livelihoods were being ruined (were professional teachers
had discussed leaving communities due to lack of access and
opportunity to move around). He understood the department
was looking at short-term solutions while the entire AMHS
fleet was out of order, but communities were trying to fill
the gaps in the meantime.
Mr. Andreassen reported that municipalities had chartered
boats they had not budgeted for and many more were
considering the option in the absence of service for the
coming months. He highlighted that tourism and fisheries
were just around the corner; therefore, municipalities were
looking at new options. He pointed out that it was not out
of order to request an appropriation of something like $1
million to fill the gap and reimburse municipalities for
workarounds they were carrying out. He understood the
budget remained tight. He emphasized the needs were real.
Representative LeBon asked if AML had taken a position
regarding the PFD program or a broad-based tax of any kind.
Mr. Andreassen replied that AML had not taken a position on
the PFD program apart from requesting the legislature to
address the issue in some fashion. He relayed that AML had
passed a resolution in support of a broad-based tax with a
preference for an income tax. He noted AML was open to
discussing a sales tax with the legislature.
1:41:54 PM
JIM WILLIAMS, FAIRBANKS NORTH STAR BOROUGH, FAIRBANKS (via
teleconference), spoke to some impacts of the budget. He
testified in support of funding for community assistance.
He reported that the loss in funds was having an impact
across the state and in Fairbanks every little bit helped.
He shared that Fairbanks had a good economic development
year where property values and commercial construction had
increased. However, state required property tax exemptions
had eroded almost every nickel out of the borough's tax
base. The community had outstanding debt on a school
construction loan, which would not go away.
1:43:39 PM
CHARLES MCKEE, SELF, ANCHORAGE (via teleconference), shared
that he had submitted a UCC filing showing he was a secured
party beneficiary to a trust the legislature served as
trustee. He shared that he had sent in a business license.
He stated the appropriations contained a lack of
accountability to the trust-credit-trust transfer.
Co-Chair Foster stated that the committee was considering
the supplemental budget.
Mr. McKee stated that the supplemental budget did not
reflect the transfer of credits from trust accounts of
individuals into the court system. There was money not
being accounted for that did not go into the General Fund.
He thought it was larceny. He shared personal items related
to a charge related to whistleblowing against the current
administration.
Co-Chair Foster asked if Mr. McKee had submitted his
information in writing.
Mr. McKee confirmed that the information had been
submitted.
1:48:49 PM
CRIS EICHENLAUB, SELF, EAGLE RIVER (via teleconference),
was concerned about the widening of the spending gap. He
asked why the state's resources were being mismanaged. He
wondered why the Constitutional Budget Reserve had been
depleted. He thought the people were not being listened to.
He believed former Governor Walker had expanded Medicaid
without the consent of the public. He emphasized his belief
that the voices of the public had been stifled by special
interests. He stressed that the spending addiction needed
to be curbed. He thought the binding caucus - through
coercion and bribery - seemed to be running the government.
He emphasized the need for solutions. He stated that not
paying the PFD was not a budget solution. He supported the
repeal of SB 26. He stated the problem had been created by
bills passed by the legislature.
1:51:48 PM
VALERIE THERRIEN, FAIRBANKS CITY COUNCIL, FAIRBANKS (via
teleconference), spoke on behalf of the Fairbanks City
Council. The council was requesting the recapitalization of
the community assistance program. She shared that the City
of Fairbanks would see a reduction from $688,000 to
$79,000, which could not be absorbed by the city. She
shared that she had sponsored Resolution 4902, which had
been sent to the Interior delegation. She offered to send
the resolution to the committee.
Co-Chair Foster asked Ms. Therrien to submit her
resolution.
Ms. Therrien shared that the City of Fairbanks was on a
very tight budget and had been counting on the funding to
make ends meet.
Co-Chair Foster asked Ms. Therrien to repeat how much the
city had been expecting.
Ms. Therrien replied that the city had been anticipating
$688,552 [from the community assistance program], which was
the amount the city had received in FY 20. Currently, the
FY 21 budget included $79,684.
Co-Chair Foster relayed that he would have someone from the
Legislative Finance Division follow up with Ms. Therrien to
verify the decrease she had provided.
1:54:19 PM
WALT WELLER, MAYOR, PELICAN, PELICAN (via teleconference),
testified that the residents of Pelican were waiting to
hear about some realistic short-term services solution from
the state while AMHS service. He stressed that the loss of
the ferry had adversely impacted every industry and
household that had been denied service. He needed to know
whether Pelican would be included in any of the temporary
contracted services. He stressed that the state needed to
make short-term contract decisions immediately or there
would be long-term damage to all of the areas previously
served by AMHS if there was no transportation available for
the fishing, construction, and tourism season. He hoped the
supplemental bill would address the issue. He thanked the
committee for its time and efforts.
1:56:03 PM
NORM CARSON, PRESIDENT, CHAMBER OF COMMERCE, CITY OF
PELICAN, PELICAN (via teleconference), fully supported
Mayor Weller's testimony. He shared that he and his wife
had submitted a letter to the Senate Finance Committee
requesting a PFD cap of approximately $1,000. He thought a
$3,000 PFD would put the state further in debt.
Vice-Chair Ortiz asked how much ferry service had been
reduced in Pelican after the budget reduction had been made
to the AMHS in FY 20. He recognized there had been no
service to Pelican since ferries had broken down.
Mr. Carson replied that the community had not seen a ferry
since October.
1:58:02 PM
HERMAN MORGAN, SELF, ANIAK (via teleconference), stated
there had never been ferry service in Aniak, which was off
the road system and got along fine. He suggested perhaps
there was a way the state could reduce the cost. He asked
why community revenue sharing had been reduced. He shared
that taking away the Permanent Fund hit rural Alaska the
hardest. He elaborated that residents used the money for
heating fuel and college savings. He stated that Medicaid
expansion had cost $2.4 billion to start up. He wondered
how the state would afford increased costs. He thought the
legislature needed to work with the governor to figure out
how to lower the cost of healthcare. He thought the cost
would bankrupt the state. He believed most of the money was
going to superintendents and others making a large amount
of money. He thought UAA teachers were overpaid. He thought
the state could afford to pay residents a full PFD. He
stated there was excessive spending and no budget cuts,
which was unfair to Alaskans. He asked the legislature to
think about rural Alaskans in his region. He reiterated
that the legislature would bankrupt Alaska. He asked the
legislature to start working together with the governor.
Co-Chair Foster provided the email address for the
committee.
2:03:51 PM
TOM BRAWND, SELF, SUTTON (via teleconference), stated that
a lot of fair play had failed in Alaska due to special
interests and filling the legislature with some
unscrupulous opportunists. He believed the binding caucus
was extortion. He believed the system that allowed the
Senate president to decide how other legislators voted was
unconstitutional. He stated that special interests were not
public, and they should testify separately. He stressed
that taking the PFD was a violation of existing law. He
believed state income taxes were illegal. He asked what was
done before there was a ferry.
Co-Chair Foster noted that it was an opportunity for public
testimony. He reminded individuals they could submit public
testimony to the House Finance Committee email address.
Co-Chair Foster CLOSED public testimony.
HB 234 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
Monday.
ADJOURNMENT
2:06:41 PM
The meeting was adjourned at 2:06 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 234 Public Testimony Recd by 021420.pdf |
HFIN 2/14/2020 1:30:00 PM |
HB 234 |
| HB 234 Public Testimony Recd by 2.17.20.pdf |
HFIN 2/14/2020 1:30:00 PM |
HB 234 |