Legislature(2023 - 2024)ADAMS 519
03/28/2024 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 268 | TELECONFERENCED | |
| += | HB 270 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 28, 2024
10:09 a.m.
10:09:07 AM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 10:09 a.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Representative Justin Ruffridge; Representative Andrew
Gray; Representative Dan Saddler; Representative Jesse
Sumner.
SUMMARY
HB 268 APPROP: OPERATING BUDGET; CAP; SUPP; AM
HB 268 was HEARD and HELD in committee for
further consideration.
HB 270 APPROP: MENTAL HEALTH BUDGET
HB 270 was HEARD and HELD in committee for
further consideration.
Co-Chair Johnson reviewed the meeting agenda. The committee
would consider amendments to the operating and mental
health budgets.
HOUSE BILL NO. 268
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making capital appropriations; making
supplemental appropriations; making reappropriations;
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."
HOUSE BILL NO. 270
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
^AMENDMENTS
10:09:16 AM
Co-Chair Johnson noted that Amendment L 11 had already been
moved [during the House Finance Committee meeting on
3/28/24 at 2:40 p.m.] and the committee would continue its
discussion on the amendment.
Representative Hannan would not be supporting Amendment L
11 because an overdraw of the percent of market value
(POMV) would be irresponsible. Although there was a demand
for a full statutory Permanent Fund Dividend (PFD), there
were many statutes with which the legislature did not
comply. She did not think that the current year's budget
met the demands of Alaskans and she did not think the
amendment would be responsible.
Representative Galvin appreciated the time the committee
took to think about the amendment. She was unsure how she
would vote on the amendment. She thought it was important
that the legislature consider retaining the statutory PFD
amount. The legislature should impose an aggressive broad-
based revenue measure that impacted higher-earning
households more than lower-earning households. She did not
think that the legislature was heading in the direction of
imposing such a revenue measure. The fiscal policy working
group offered recommendations to the legislature but no
recommended actions had been taken. The proposed budget was
irresponsible and it did not "add up." The budget was not
responsive to the needs of students, working families, or
seniors. The path of least resistance and political
expediency would chip away at the PFD year-after-year and
ultimately place the bulk of financial burden onto the
poorest Alaskans. The proposed amendment was a step towards
a fiscal cliff and an unjust and unfair outcome for the
most vulnerable individuals in the state. She reiterated
that she did not think that the budget reflected the needs
of Alaskans. She was uncertain whether the legislature
would do what she thought to be right and impose a broad-
based revenue system. She emphasized that it was a tough
choice.
10:14:19 AM
Representative Josephson MOVED to ADOPT conceptual
Amendment 3 to Amendment L 11. The conceptual amendment
would change the funding source from the Earnings Reserve
Account (ERA) of the Permanent Fund to the Constitutional
Budget Reserve (CBR).
Representative Stapp OBJECTED. There was about $3 billion
in the CBR and he thought that withdrawing $1 billion from
the CBR would not be a good idea. He explained that one of
his reasons for objecting to withdrawing large sums of
money from the CBR was that historically, CBR withdrawals
had always resulted in a significant increase in government
spending. He thought the change would be "bad form" and he
would not be supporting the proposed conceptual amendment.
Representative Galvin relayed that she supported the
conceptual amendment because she thought it was important
for there to be more deliberation around significant
spending. She noted that it would be helpful for the
legislature to be considerate and mindful of what Alaskans
wanted. She thought it was a fair amendment.
Co-Chair Foster added that he was willing to take a chance
on the conceptual amendment if it would help members vote
in support of underlying Amendment L 11. He would be
supporting the conceptual amendment.
Representative Ortiz remarked that the idea brought forth
in the conceptual amendment was more favorable than the
underlying amendment in terms of the overall fiscal
picture. He appreciated Representative Josephson for
bringing the amendment forward because he thought it was a
more plausible pathway to get to the statutory PFD.
Representative Coulombe appreciated that the committee had
the opportunity to think about the amendment overnight. She
was in opposition to the conceptual amendment and she had
second thoughts about supporting the underlying amendment.
She did not think the committee was the right place to
propose the change, though she still supported a full PFD.
She wanted to see the change proposed on the House floor in
order to get more input on the idea. She recalled that the
Base Student Allocation (BSA) and transportation funds were
combined with the broadband bill [HB 193] in the prior year
and she was the only person who did not vote for the bill.
She was not against the BSA but she thought certain topics
needed to be discussed separately.
10:19:10 AM
Co-Chair Edgmon shared that he was grateful for the
discussion. Projected reduced oil revenue would make it
more difficult for him to support a full statutory PFD, at
least in the short term. He would be willing to reduce the
PFD slightly because he would not advocate for withdrawing
funds from the ERA. He noted that a withdrawal from the CBR
required 30 votes to pass and it was a monumental decision
to "throw fiscal responsibility out the window." He thought
it should require a three-quarters vote if the legislature
did not put forth a balanced budget. He would support the
conceptual amendment.
Representative Tomaszewski thought the conceptual amendment
was a way to communicate disdain for paying a full PFD. He
argued that the House Finance Committee was where such
amendments should be brought forth before the bills were
discussed on the floor. He remarked that all concerns would
be repeated on the floor and the discussion would take
three times as long as it did in committee, which was a
process of which he was accepting. He thought the amendment
would make it more difficult for the legislature to pay a
full PFD and easier for the legislature to continue
behaving fiscally irresponsibly. He had heard discussion
about the fact that that there were many statutes that were
not being followed but he thought that as the lawmakers,
legislators should be following the law. If there were
statutes that were unclear, the legislature should make
necessary changes to add clarity. He did not think that the
budget would be balanced or the legislature would develop a
real fiscal plan until the PFD had been completely spent.
He thought that the PFD would be spent in its entirety soon
and that Alaskans needed to understand that the PFD would
soon be eliminated if the current trends continued. The
legislature was putting off its problems to a later date
and the situation was going to be much more difficult when
the decisions became more difficult. He understood the
purpose of the amendment but he would not be supporting it.
Representative Stapp MAINTAINED the OBJECTION.
10:23:51 AM
A roll call vote was taken on the motion to adopt
conceptual Amendment 3 to Amendment L 11.
IN FAVOR: Galvin, Hannan, Josephson, Ortiz, Edgmon, Foster
OPPOSED: Coulombe, Cronk, Stapp, Tomaszewski, Johnson
The MOTION PASSED (6/5). Conceptual Amendment 3 to
Amendment L 11 was ADOPTED.
10:24:40 AM
AT EASE
10:24:58 AM
RECONVENED
Co-Chair Johnson noted that Representative Justin Ruffridge
and Representative Andrew Gray were present in the
audience.
Representative Stapp thought the budget was balanced with a
generous surplus. The passage of Amendment L 11 would
create an unbalanced budget in a high revenue year and if
it passed on the floor, it would draw the majority of the
CBR down to an unsustainable level. He was saddened by many
of comments on the conceptual amendment and he thought
passing it was a bad idea. The PFD was not paid from the
CBR, but from the ERA. He stressed that pretending to give
constituents a full PFD by "robbing Peter to pay Paul" was
not an action in which he would like to take part. He would
be opposed to the amendment and any others like it. The
budget in its current state resourced education and other
programs and had a large surplus, but passing the amendment
would undo all of the work it took to craft a balanced
budget. He emphasized that passing the amendment would act
as a message to the voters that the committee was
irresponsible.
10:27:18 AM
AT EASE
10:32:37 AM
RECONVENED
Co-Chair Johnson clarified that the chair was able to limit
amendment debate to one turn per committee member. She
explained that because Amendment L 11 had been amended by
conceptual Amendment 3, there could be an additional round
of debate.
Co-Chair Edgmon hoped the committee's actions on the
amendment would help provide leadership to all House
members as well as to the entire legislature. He hoped the
message would be that the committee was willing to make
tough choices and make the right decisions for Alaska. He
requested that the committee make the right decision on the
underlying amendment. The committee should know the numbers
and the details of the budget the best and he thought it
should act accordingly.
Representative Tomaszewski appreciated the debate. He
thought that a vote for Amendment L 11 was saying that the
committee was going to "kick the can down the road." Many
legislators would not agree to any type of fiscal plan and
he thought the problems would continue. He reiterated that
if patterns continued, the PFD would dwindle down until it
disappeared. Actions and inactions had consequences and the
committee had to make hard decisions. He suggested that if
the committee wanted to lead, it needed to devise a plan to
cap spending, create other revenues, and find ways to
become more efficient. He expressed respect for his
colleagues and he appreciated the debate.
Representative Josephson thought there was strong evidence
that the PFD would continue because the state had been
paying a responsible dividend. He suggested that the POMV
draw would settle at around a 75/25 split depending upon
variables such as the make up of the executive branch. When
an important amendment was adopted, the honorable action to
take was to vote for the amendment; however, he would not
be voting for the amendment.
10:37:58 AM
Co-Chair Johnson noted that Representative Dan Saddler and
Representative Jesse Sumner were present in the audience.
Representative Galvin commented that the Legislative
Finance Division (LFD) had provided a list to the committee
that included costs for the broadband assistance grant
(BAG) bill, Medicaid, the Alaska Marine Highway System
(AMHS), fire suppression, and more. She did not think the
state was in a good position. There was no headroom for
deferred maintenance. She was concerned about the messages
that the committee was sending with its amendment actions
and she would like to see the budget rebuilt.
Co-Chair Johnson thought it seemed like Representative
Galvin was speaking to the budget itself and requested that
she confine her comments to the amendment.
Representative Galvin commented that the discussions would
continue on the House floor and she looked forward to a
hearty and honest discussion.
Representative Cronk thought the legislature was debating
the same issues year-after-year. He wanted the issue to be
solved, but it was not simple. Solving the problem required
a complete fiscal plan and he understood that
Representative Ben Carpenter had developed a complete
fiscal plan. The discussion was valuable and everyone's
opinions were valid, but he did not think the committee was
focusing on the fact that there was an issue and people
wanted it solved. He suggested that if the passage of the
amendment was the first step towards solving the problem,
the committee had a valuable opportunity to act. He was
frustrated and thought that the legislature needed to do a
better job of educating the public about the legislative
process.
10:42:36 AM
Co-Chair Johnson remarked that there was concern that the
budget was unbalanced, but she thought that some of the
concerned members had voted to "unbalance" the budget by
drawing from the CBR. She did not think the budget was
unbalanced and there was presently $152 million in surplus.
She acknowledged that the surplus could be spent in its
entirety through the passage of amendments. There was also
a $300 million capital budget. The figures were likely to
change as there were hundreds of bills currently in process
and there was not enough money to fund all of the bills had
the potential to pass. She had done in-depth research on
the bills that could be forthcoming. She relayed that she
would go into more depth as the budget process continued,
but she wanted to clarify that some of the issues that were
being discussed were not currently applicable.
Co-Chair Johnson continued that uncertainty in the laws
made the messy work of crafting the budget even messier.
The goal of her office was to pay out the highest possible
PFD to help Alaskans that needed the money. The PFD and
energy relief payments made a tremendous difference in the
lives of the poorest Alaskans. She was trying to fund state
services and she did not think the budget was
"showboating." She would be in full support of the
amendment if she thought that the amendment was an honest
attempt to pay a full PFD. She did not think that three-
quarters of House members would vote in support of drawing
from the CBR to pay for a full PFD.
Co-Chair Johnson explained that she voted against the
conceptual amendment because she thought it made the
process more confusing. She stressed the importance of
clarity in the legislative process for the public. She
wanted to speak for individual citizens and not for
political insiders. If the amendment was adopted, it would
destroy the budget and reverse all of the work that had
been done to craft the budget. The PFD would not survive if
the amendment passed. The passage of the amendment would
mean handing a budget to the Senate that was unsustainable
and "dead on arrival." She would continue to support the
budget and she stood behind the decisions she made. The
House was an equal member of the three branches of
government and she thought that it needed to stop handing
over the big decisions to the Senate. She thought passing
the amendment would result in the House giving up its power
and deferring to the Senate.
10:49:51 AM
Co-Chair Foster remarked that the saying "let your vote be
your words" had been circulating the capitol building. He
reiterated that the budget was balanced because money was
not being pulled from the general fund. Services would not
need to be cut because the amendment took funds from the
CBR. The amendment originally withdrew funds from the ERA,
which would have been problematic because the legislature
would have had to choose which law it would follow: the 5
percent POMV draw or the full statutory PFD. He thought
that the amendment would allow the legislature to adhere to
both laws because the funding would come from the CBR and
it would not exceed the 5 percent POMV draw from the ERA.
His constituents viewed the PFD as a necessity and if it
was reduced, it would be a regressive tax on lower-income
families. He would be supporting the amendment.
Representative Stapp MAINTAINED the OBJECTION.
10:52:31 AM
A roll call vote was taken on the motion to adopt Amendment
L 11 as amended.
IN FAVOR: Foster, Cronk, Tomaszewski
OPPOSED: Coulombe, Stapp, Galvin, Hannan, Josephson,
Ortiz, Edgmon, Johnson
The MOTION FAILED (3/8).
10:53:31 AM
AT EASE
10:54:49 AM
RECONVENED
Co-Chair Johnson stated that her intention was to go
through a few more amendments before adjourning the
meeting.
10:55:31 AM
Representative Galvin MOVED to ADOPT Amendment L 12 (copy
on file):
OFFERED IN: The House Finance Committee
TO: HB 268 / HB 270
OFFERED BY: Rep. Galvin
FISCAL YEAR: FY25
DEPARTMENT: Permanent Fund Dividend
APPROPRIATION: Permanent Fund Dividends
ALLOCATION: Dividend Fund 1050
ADD: $746,746,100 PF ERA (1041)
DELETE: $1,100,000,000 PF ERA (1041)
FISCAL YEAR: FY24
DEPARTMENT: Special Appropriations
APPROPRIATION: Energy Relief
ALLOCATION: Energy Relief
DELETE: $260,000,000 UGF (1004)
DEPARTMENT: Fund Transfers
APPROPRIATION: Undesignated Budget Reserves
ALLOCATION: Constitutional Budget Reserve
ADD: $143,500,000 UGF (1004)
EXPLANATION: Restore FY24 CBR deposit based on Spring
2023 Revenue forecast, delete additional Energy Relief
deposit in FY24, and reduce FY25 PFD appropriation to
$746.7 million to pay out a PFD of $1,100 per
recipient.
OFFERED IN THE HOUSE
TO: CSHB 268(FIN), Draft Version "D"
Page 70, lines 3 - 21:
Delete all material.
Renumber the following bill sections accordingly.
Page 72, line 14:
Delete "$1,100,000,000"
Insert "$746,746,100"
Page 72, line 17:
Delete "$2,557,263,378"
Insert "$2,910,517,278"
Page 79, line 27:
Delete "secs. 28(c) - (e)"
Insert "secs. 27(c) - (e)"
Page 95, line 28:
Delete "sec. 47"
Insert "sec. 46"
Page 96, lines 6 - 7:
Delete "secs. 21(b), 26(a), (b), (c)(1), and (d),
28(c) - (e), 35, 39(b) and (c), 41, 42(a) -
(k) and (m) - (o), and 43(a)"
Insert "secs. 25(a), (b), (c)(1), and (d), 27(c) -
(e), 34, 38(b) and (c), 40, 41(a) - (k) and
(m) - (o), and 42(a)"
Page 96, line 16:
Delete "19 - 21, 40(d), 42(d) and (e), and 49"
Insert "19, 20, 39(d), 41(d) and (e), and 48"
Page 96, line 18:
Delete "22 - 39, 40(a) - (c), 41, 42(a) - (c) and (f)
- (o), 43 - 48, 50, and 52"
Insert "21 - 38, 39(a) - (c), 40, 41(a) - (c) and (f)
- (o), 42 - 47, 49, and 51"
Page 96, line 29:
Delete "sec. 27(b)(1)"
Insert "sec. 26(b)(1)"
17 Page 96, line 30:
Delete "sec. 30(g)"
Insert "sec. 29(g)"
Page 97, line 2:
Delete "Section 51"
Insert "Section 50"
Page 97, line 5:
Delete "19 - 21, 40(d), 42(d) and (e), and 49"
Insert "19, 20, 39(d), 41(d) and (e), and 48"
Page 97, line 8:
Delete "secs. 53 - 56"
Insert "secs. 52 - 55"
Representative Cronk OBJECTED for discussion.
Representative Galvin stated that in response to the
discussion about solidifying the PFD, she would suggest a
friendly amendment to Amendment L 12 because some of the
issues included in the amendment had already been
considered. She proposed that all of the content of the
amendment be deleted apart from lines 6 through 12, which
would provide for a PFD amount of $1,100 [although not
expressly stated, she moved conceptual Amendment 1 to
Amendment L 12]. The conceptual amendment would delete
"$1,100,000,000" on page 72, line 14, and insert
"746,746,100" which was a decrement to the budget of
$353,253,900. In addition to the $1,100 PFD, the $644
energy relief check would be distributed to Alaskans,
totaling $1,744. She thought there was a way to hold the
corpus in place indefinitely if the PFD was not "super-
sized" and the POMV draw was adhered to. She relayed that
it was responsible to include some headroom in the budget.
The amendment would provide for $353 million in headroom as
well as enable the legislature to offer Alaskans a hearty
$1,744 check. The Alaskans with whom she had spoken wanted
to see children, seniors, and ferries be protected. The
amendment would act as a compromise.
Co-Chair Edgmon commented that although he viewed the
amendment as well intentioned, he would be voting in
opposition to the amendment. There were negotiations
occurring between the House and the Senate and he wanted
the process to continue to move forward. He expressed that
the balance was difficult between providing a dividend that
would help impoverished communities and all of the other
financial components. He would not be voting for the
amendment.
Representative Stapp understood that Representative Galvin
moved a conceptual amendment to Amendment L 12. He asked if
his understanding was correct.
Co-Chair Johnson responded in the affirmative. She thought
the explanation of the conceptual amendment was confusing
and she was inclined to adjourn the meeting.
11:00:36 AM
AT EASE
11:01:00 AM
RECONVENED
HB 268 was HEARD and HELD in committee for further
consideration.
HB 270 was HEARD and HELD in committee for further
consideration.
Co-Chair Johnson reviewed the agenda for the afternoon
meeting.
ADJOURNMENT
11:01:31 AM
The meeting was adjourned at 11:01 a.m.
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