Legislature(1995 - 1996)
04/29/1996 09:25 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 29, 1996
9:25 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Scott Ogan, Vice Chair
Representative Ivan Ivan
Representative Brian Porter
Representative Joe Green
Representative Caren Robinson
Representative Ed Willis
MEMBERS ABSENT
None
COMMITTEE CALENDAR
HOUSE BILL NO. 136
"An Act mandating the sale of the Alaska Railroad; and providing
for an effective date."
- PASSED CSHB 136(STA) OUT OF COMMITTEE
CS FOR SENATE CONCURRENT RESOLUTION NO. 23(STA) am
Relating to long range financial planning.
- PASSED HCS CSSCR 23(STA) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 136
SHORT TITLE: ESTABLISH ALASKA RAILROAD COMMISSION
SPONSOR(S): REPRESENTATIVE(S) MARTIN
JRN-DATE JRN-PG ACTION
01/30/95 174 (H) READ THE FIRST TIME - REFERRAL(S)
01/30/95 174 (H) TRA, STA, FIN
04/03/96 (H) TRA AT 1:00 PM CAPITOL 17
04/10/96 (H) TRA AT 1:00 PM CAPITOL 17
04/11/96 (H) STA AT 8:00 AM CAPITOL 102
04/12/96 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/12/96 3691 (H) TRA RPT CS(TRA) NT 1DP 5NR 1AM
04/12/96 3692 (H) DP: G.DAVIS
04/12/96 3692 (H) NR: WILLIAMS,SANDERS,LONG,JAMES
04/12/96 3692 (H) NR: MASEK
04/12/96 3692 (H) AM: BRICE
04/12/96 3692 (H) INDETERMINATE FISCAL NOTE (DCED)
04/12/96 3692 (H) FISCAL NOTE (LAW)
04/12/96 3692 (H) 2 ZERO FISCAL NOTES (GOV, DOT)
04/13/96 (H) FIN AT 1:00 PM HOUSE FINANCE 519
04/16/96 (H) STA AT 8:00 AM CAPITOL 102
04/18/96 (H) STA AT 8:00 AM CAPITOL 102
04/23/96 (H) STA AT 8:00 AM CAPITOL 102
04/25/96 (H) STA AT 8:00 AM CAPITOL 102
04/27/96 (H) STA AT 10:00 AM CAPITOL 102
04/29/96 (H) STA AT 9:00 AM CAPITOL 102
BILL: SCR 23
SHORT TITLE: LONG RANGE FINANCIAL PLANNING
SPONSOR(S): RULES BY REQUEST OF LONG RANGE FINANCIAL PLAN CMSN
JRN-DATE JRN-PG ACTION
01/22/96 2197 (S) READ THE FIRST TIME - REFERRAL(S)
01/22/96 2197 (S) STA, JUD, FIN
02/07/96 2330 (S) JUD REFERRAL WAIVED
02/07/96 2330 (S) FIN REFERRAL WAIVED
02/08/96 (S) STA AT 3:30 PM BUTROVICH RM 205
02/09/96 2345 (S) STA RPT CS 3DP 2NR SAME TITLE
02/09/96 2345 (S) ZERO FISCAL NOTE (S.STA)
02/09/96 2362 (S) MOTION TO ADD FIN REFERRAL
02/09/96 2362 (S) MOTION FAILED Y9 N10 E1
02/12/96 (S) RLS AT 8:00 AM FAHRENKAMP RM 203
02/12/96 2381 (S) RULES RPT 3CAL, 2NR 2/12/96
02/12/96 2386 (S) HELD TO 2/13/96 CALENDAR
02/13/96 2405 (S) READ THE SECOND TIME
02/13/96 2406 (S) STA CS ADOPTED Y12 N8
02/13/96 2406 (S) AM NO 1 DIVIDED Y12 N8
02/13/96 2407 (S) AM NO 1 PART 1 FAILED Y8 N12
02/13/96 2408 (S) AM NO 1 PART 2 ADOPTED Y17 N3
02/13/96 2408 (S) PASSED Y12 N8 CSSCR 23(STA) AM
02/13/96 2408 (S) DUNCAN NOTICE OF RECONSIDERATION
02/14/96 2432 (S) RECONSIDERATION NOT TAKEN UP
02/14/96 2432 (S) TRANSMITTED TO (H)
02/15/96 2768 (H) READ THE FIRST TIME - REFERRAL(S)
02/15/96 2769 (H) STATE AFFAIRS, FINANCE
04/29/96 (H) STA AT 9:00 AM CAPITOL 102
WITNESS REGISTER
WALTER J. HICKEL, Former Governor
1905 Loussac Drive
Anchorage, Alaska 99517
Telephone: (907) 248-0013
POSITION STATEMENT: Testified on HB 136
JOE USIBELLI, JR.
1645 Taroka Drive
Fairbanks, Alaska 99709
Telephone: (907) 479-5591
POSITION STATEMENT: Testified on HB 136
JOHNE BINKLEY
Fairbanks, Alaska
Telephone: (907) 479-6006
POSITION STATEMENT: Testified on HB 136
REPRESENTATIVE TERRY MARTIN
Alaska State Legislature
Capitol Building, Room 502
Juneau, Alaska 99801-1182
Telephone: (907) 465-3783
POSITION STATEMENT: Sponsor of HB 136
ACTION NARRATIVE
TAPE 96-63, SIDE A
Number 015
The House State Affairs Committee was called to order by Chair
Jeannette James at 9:25 a.m. Members present at the call to order
were Representatives James, Porter and Ivan. Members absent were
Representatives Ogan, Green, Robinson and Willis.
HB 136 - ESTABLISH ALASKA RAILROAD COMMISSION
CHAIR JEANNETTE JAMES announced the first order of business was HB
136. She noted that public testimony had been closed at the
previous hearing, but she would re-open public testimony for the
purpose of allowing those individuals to testify who didn't have an
opportunity to speak at the previous hearing. She had a long list
of people who had signed up to testify in opposition to HB 136 and
she had agreed to read their names into the record.
CHAIR JAMES said the committee would be discussing a committee
substitute. She asked Governor Hickel to present his testimony and
confirmed he had received a copy of the committee substitute.
Number 274
GOVERNOR WALTER HICKEL testified from Anchorage that he is a great
supporter of the Alaska Railroad. He said when the Railway Act was
passed in 1914, it was a simple Act that authorized the President
of the United States to build not to exceed 1,000 miles of railroad
for the primary purpose of opening up the country; it didn't have
anything to do with profits. The intention of the railroad in
those days is still the intention of it today. It states that it's
basically a governmental operation and has a lot of governmental
responsibilities which it still has. Governor Hickel noted the
legislature was going to do this study as to if and when the
railroad should be sold, but he had another thought he wanted to
share with the committee; that being expanding the railroad instead
of selling it. He pointed out the vast country in the Arctic and
the hundreds of millions of tons of coal which is useless unless
there is a way to get it to tidewater. He suggested extending the
railroad to the Red Dog area, the Brooks Range down to the south of
Nome to a year-round port. He believed the study should take into
consideration not only the "if and when" but also what can be done
to enhance the railroad. Governor Hickel said the railroad is
making money; it is not a drain on the state. He thought maybe
everyone should take a look at this great asset Alaska has. He
invited questions from the committee.
Number 601
CHAIR JAMES said there were two additional people to testify, but
asked Governor Hickel to stand by for questions.
Number 630
JOE USIBELLI, JR., wanted to address a couple of specific points in
HB 136. He said as committee members are aware, the coal that
comes from the Usibelli Coal Mine in Healy represents something
between 20 and 25 percent of the total transportation revenues the
Alaska Railroad receives, which makes them the second largest
customer. He expressed concern with the provision that specifies
that the railroad be operated for 20 years. Usibelli Coal is 53
years old and another 20 years of life isn't all that long. He is
making business plans that extend beyond 20 years and would like
some assurance the railroad will be available for transportation
for longer than that. A second area of concern for Mr. Usibelli
was the representation of the commission; that is only one member
being among the major customers of the railroad. He felt that
major customers should have more representation on the commission.
He thought a 5-member committee was a small committee and perhaps
should be expanded. Additionally, he believed the November 1,
1996, submittal to the Governor and to the Legislative Budget &
Audit Committee was an unattainable goal. Finally, he expressed
concern regarding the mandate that the Alaska Railroad Corporation
pay for the evaluation. Those funds are necessary for the
continued maintenance and up keep of the railroad itself. The
Alaska Railroad has very little access to outside capital and their
internal generation of funds are needed for their ongoing
operations. He said overall, he doesn't necessarily disagree with
some sort of assessment of the Alaska Railroad Corporation as far
as what the assets mean to the corporation, to the public and to
the customers that currently utilize the railroad system. He would
like to see it assessed on that basis first and then decide whether
or not it should be sold. He tended to think it was an asset of
the state of Alaska that the state should continue to hold control
over for some additional period of time. He thanked the committee
for the opportunity to testify.
Number 900
CHAIR JAMES thanked Mr. Usibelli for his testimony and asked him to
stand by for questions.
Number 913
JOHNE BINKLEY testified that it had been almost 100 years ago that
his grandfather came to Alaska and began piloting rafts on the
upper Yukon River helping the gold rush folks get down the upper
stretches of the Yukon River. Since that time, his family has been
involved in the river transportation business in almost all the
major rivers of Alaska. In those early days, Fairbanks was
completely dependent on the large, steam powered paddle-wheelers
which hauled freight 1250 river miles which was ice bound in the
winter. There was only about 100 days in which to get all the
freight required in the Interior hauled up that river system. All
of that changed in 1923 when the Alaska Railroad was completed and
all of a sudden, Fairbanks unlike all the other boom towns of that
era, had a year round rail link to the ice free tidewater port of
Seward. That fundamentally changed Fairbanks and distinguished it
from many of the other boom towns in the Interior which eventually
went bust. His purpose was not to re-live history, but to simply
impress upon the committee how critical that link is - that
transportation corridor from ice free tidewater to the Interior.
It's what keeps them going and what was so critical to the
development of the Interior over the years and it's just as
critical today as it was 75 years ago when it was completed.
MR. BINKLEY said he has had the privilege over the last year of
serving on the Board of the Directors for the Alaska Railroad. He
and his family have always been in the private sector, but over the
last year he's been impressed how well the Alaska Railroad
Corporation is run. He said it's a good organization, people in
the organization are dedicated and look out for the assets of the
corporation, it's not run on politics and the board makes sound
management decisions. Since it's not run on politics, occasionally
there may be some political toes that are stepped on. He didn't
know if that was the source of this legislation or if there was
some political concern that was driving this legislation. He
noted, however, that is not their primary focus. The board never
loses sight of who their shareholders are; the 600,000 people in
Alaska and the board strives to protect their assets. He said the
Alaska Railroad is financially sound, it's never been subsidized by
the state general fund, they have a vision for the future and he
thought it was an asset that all Alaskans can and should be proud
of.
MR. BINKLEY pointed out he has not seen the proposed committee
substitute so he didn't know the details of it. For the concern of
Interior constituents, he urged the committee to kill the bill. If
this is such a critical idea, he suggested taking some time to
review the issue and allow the public to get involved in the
discussion. He thanked the committee for the opportunity to
participate.
Number 1223
CHAIR JAMES announced that concluded the list of individuals who
had signed up to testify but did not get the opportunity to testify
the previous Saturday. She had a list of people who wished to
testify today if time allowed but she had previously closed public
testimony. She read their names for the record: Lou Dickinson,
David Thompson, Ernie Brannon from Palmer, Tom Dow from Seattle,
Mayor Lute Cunningham from North Pole, Mayor Jim Hayes from
Fairbanks, Mayor Jim Sampson from the Fairbanks North Star Borough,
Frank Chapados former board member of the Alaska Railroad, Dick
Knapp, Ron Majors, Susie Keller, Jeff Benz (sp), John Harlow,
Gordon Evans, Randy Jordan, Steve MaHay (sp), Joe Josephson,
Charles Krompacky, Ted Rogers, a delegate from Princess Tours, Tom
Tougas of Kenai Fjords, Herb Lange, Paul Ross of Wilder
Construction, R.C. Collin, Frank Withey, Bruce Gough, B.J. Bjorgan,
Don Sherwood, Steve VanGoor, Ken Brovold, Stan Bissentte, Phil Todd
and Pat Durand. She asked Representative Martin to comment on the
committee substitute and noted that Governor Sheffield was on-line
to answer any questions. Governor Sheffield pointed out that Mayor
Don Gillman's name had been omitted from the list of individuals
that Chair James read for the record.
Number 1340
REPRESENTATIVE TERRY MARTIN said he was surprised and almost
overwhelmed by the negativeness of former Senator Binkley and
others who testified. He noted that he along with the others
addressing the problem were very optimistic about the future of the
railroad; no one was trying to get rid of it. He pointed out the
source of the legislation was his commitment 10 years ago when the
railroad was purchased from the federal government for $20 million.
The railroad was running down and the federal government was no
longer able to handle the cost, so the state purchased it and made
a 10-year commitment to keep it going. He remarked he wouldn't
mind a 10 million year commitment to keep it going and hoped that
people would get more optimistic. It's the 10-year anniversary of
the railroad and that's the reason why he introduced legislation in
December 1994. He noted that some background work had been done
and with the 10-year commitment having been fulfilled, he felt they
could begin in an orderly way to transfer the land to the state of
Alaska that was promised. His thought was to look at the
possibilities that exist. He had nothing against the corporation,
but he believed that when this was brought out in the light, the
public would recognize the tremendous future of the railroad. He
had no problem with users of the railroad joining in the discussion
regarding the future of the railroad. He asked people not to limit
the opportunities.
Number 1600
CHAIR JAMES noted there were additional individuals who had wished
to testify and read the names for the record: John Harlow was on-
line in Seattle, Sean Lambnen (sp), Carol Brown and Kevin Shaffer
(sp).
Number 1626
CHAIR JAMES said she would go through the proposed committee
substitute and note the changes that were made from the draft R
accepted as a working draft by the committee on Saturday. She said
the title had been changed to read, "To determine whether a sale of
the Alaska Railroad is in the best interest of the state" as
opposed to evaluating the sale of the Alaska Railroad. Also, the
language in Section 1 had been changed from, "The Alaska Railroad
Commission is established as an agency or under the Legislative
Budget & Audit..." to "an agency of the Legislative Branch." She
noted that a whole new paragraph Section 1(b) was added which says
specifically that the $250 a day for each member of the commission
is only for the public members and if any of the members on the
commission are legislators, state employees or railroad employees
and are already on a state payroll, they will not get any extra.
It also states that public members would be entitled to travel and
per diem as is outlined for other commission members by the Board
of Commissions. Those state employees, legislators or employees of
the Alaska Railroad would be entitled only to the travel and per
diem their employment provides for them. She pointed out the
language in Section 1(d) had been changed from the payment of the
costs for this commission and this evaluation process would be paid
from the working capital of the Alaska to read "from the corporate
receipts of the Alaska Railroad" which she believed would be a more
appropriate designation. Section 1(e) was added which includes
another date of September 1 and November 1 when the Alaska Railroad
Commission would submit a report to the Legislative Budget & Audit
Committee. The Legislative Budget & Audit Committee requested they
be able to see the progress on September 1 before the "drop dead"
date of November 1 when the evaluation process is to be completed.
She noted the sections following had been renumbered.
CHAIR JAMES explained the language "or convenient" was deleted in
the renumbered Section (f)(1) so it now reads, "(1) identify all
assets, real and personal and tangible and intangible, of the
Alaska Railroad corporation and classify those assets as necessary
for the operation of the railroad or as other assets of the
corporation;". In all cases reference in the bill to "the sale of
the Alaska Railroad" had been changed to "a sale of the Alaska
Railroad". She believed that was more responsive because otherwise
the language sounded like there was a sale in mind. A new Section
(1)(k) was added which reads, "The Alaska Railroad Commission may
not expend more than a total of $250,000 to perform the
commission's functions under this section." Those were the
sideboards that were the subject of discussion in the hearing held
the previous Saturday. She wanted to know exactly how much money
was going to be expended because she didn't want to put the
railroad in any kind of position with a huge expenditure that would
totally devastate their cash flow. She asked for comments from the
committee on the committee substitute. She noted that no decision
could be made because a quorum was not present, but Representative
Ogan was available and had been notified that his presence was
necessary to make a decision.
Number 1820
REPRESENTATIVE MARTIN said that a number of people had expressed
concern about the commission being limited to five members. He
noted that at one time the committee was made up of 15 members but
people thought that 15 was too many. His belief was that any
commission would be open and there would be ample opportunity for
anyone wishing to give testimony including all the users, employees
and individuals concerned about the future of the Alaska Railroad
to express their concerns. He expressed enthusiasm about the
people of Alaska having an opportunity to see what they have and
the future of the Alaska Railroad. He felt that five members on
the commission was more than enough for this short period of time.
Number 1900
CHAIR JAMES said Representative Martin's enthusiasm pleased her
even though his approach to the issue was totally different than
hers. She noted the legislation states that the commission would
hold open meetings, its limits as to what they could do in
executive session and that public testimony would be taken.
CHAIR JAMES said she had just gotten notice that Governor Hickel
had to leave. She thanked him for his testimony.
Number 1930
GOVERNOR HICKEL commented that he liked Representative Martin's
idea of letting the public know what the Alaska Railroad is and
what a great benefit it is to the state.
Number 1945
CHAIR JAMES said a lot of the information was available now and she
wasn't totally convinced that an organization like this was needed
but if this would get the job done, she was willing to let the bill
go forward. She would have felt better if this had been just a
dictate to the railroad to do this rather than having a commission
put together to do it. She thought that a lot of the testimony
heard by the committee was very valid and she believed there were
a number of people in the Interior that were very concerned about
the future of the railroad. She noted that her district is a very
industrious district. For example, MAPCO is one of the biggest
users of the Alaska Railroad, Eielson Air Force Base and Usibelli
Coal Mine, Princess Tours and Denali Park also are all users of the
railroad. Thus it is not surprising that she is extremely
sensitive about the future of the railroad. She agreed with
Governor Hickel that the railroad should be expanded. She believed
the railroad was the most environmentally sound way to access the
state.
CHAIR JAMES noted for the record that Representatives Green, Ogan,
Robinson and Willis had arrived and a quorum was now present.
Number 2049
REPRESENTATIVE PORTER said he was quite happy with the changes
reflected in the new committee substitute. He shared the concerns
of not wanting to give the appearance of wanting a bill that would
generate the sale of the Alaska Railroad. He said generally, being
of the philosophy that the private sector is quite often in a
better position to have success at business than government, he
thought that private ownership of these kinds of assets was
certainly worthy of consideration, but most certainly the idea
should not be that we will sell, but rather we are interested in
determining whether that sale would be in the best interest of the
state because of all the things the committee has heard, not the
least of which is the control that we now have with the ownership
in expansion. He said one of the things that is unique about the
railroad, among the many, is that it has been a quiet functioning
entity that has not been a problem to the legislature, it has not
been a drain on the revenues of the state and it has just plugged
along improving its position and its service and perhaps now
getting in a position where expansion is a viable consideration for
that organization. All that having been said, he still thought it
was worthwhile to take a look but not with any preconceived
notions.
Number 2118
REPRESENTATIVE JOE GREEN said that Representative Porter had summed
up his concern and that his first reaction was that this was step
one of a few steps to sell the railroad and he has found that is
not the case at all. He felt the evaluation was a worthwhile
process.
Number 2143
REPRESENTATIVE SCOTT OGAN said the proposed committee substitute
was a much improved version. He had expressed concern in the last
hearing of this being just another study that would gather more
dust on the shelf. He said he was willing to let this bill go
forth because it has set some parameters. He didn't know how he
would vote when this piece of legislation reached the House floor,
but he thought their votes on the floor should reflect whether or
not they believed the Alaska Railroad should sell. If they
believed it should sell, they should vote to study it; if they
believed it shouldn't be sold, they should vote not to study it
because again it will be another government study.
Number 2190
REPRESENTATIVE IVAN IVAN apologized for missing the work session on
Saturday, but expressed his appreciation for the hard work done by
the committee on the committee substitute. He thought the
committee substitute would address the concern expressed in much of
the testimony that had been given.
Number 2226
REPRESENTATIVE CAREN ROBINSON said she felt strongly this bill
shouldn't move because of the existence of a corporation and
commission that could do the work. She personally believed the
right direction would be a resolution or a letter from both the
House and Senate Leadership setting out what should be accomplished
instead of passing legislation. She thought the existing board
should do the evaluation instead of setting up another commission
that would cost more money. She shared Representative Ogan's
concern about having just another study instead of having a real
decision one way or another.
Number 2268
REPRESENTATIVE ED WILLIS concurred with the remarks of
Representative Robinson. He said he honestly didn't see any reason
why there should be a study; he hadn't heard any testimony
indicating the railroad should be sold. The board of directors and
the employees have done a good job; they're headed in the right
direction and making a profit. He said we have a railroad that is
well managed with about 550 very dedicated Alaskans working for the
railroad who have expressed concerns about their pensions and their
lives. He felt very strongly this was unnecessary and the railroad
should be allowed to continue operating as it has been. He
expressed disappointment that everyone who wanted to testify has
not had that opportunity, especially given the new committee
substitute. He is vehemently opposed to the direction the
committee was going and made a motion to table the whole issue.
Representative Green objected to the motion.
CHAIR JAMES asked for a roll call vote. Voting in favor of the
motion were Representatives Willis and Robinson. Voting against
the motion were Representatives Ogan, Green, Ivan, Porter and
James. The motion to table was defeated by a vote of 5 to 2.
Number 2400
CHAIR JAMES agreed with many of the comments that had been
expressed. She noted the committee had heard three hours of
testimony on Saturday and there had been testimony in the
Transportation Committee which was the first committee of referral.
She apologized to those individuals who did not get to testify, but
public testimony had to be closed at some point. She agreed this
was an important issue to a lot of people and she personally would
like to have heard everyone's testimony. She stated she was
willing to accept a motion to move this bill out of committee with
individual recommendations. She asked Representative Martin for
his closing statement.
Number 2438
REPRESENTATIVE MARTIN said this railroad is extremely important to
the people of Anchorage, also....
TAPE 96-63, SIDE B
Number 001
REPRESENTATIVE MARTIN continued that this legislation has been in
the committee process for the last two years.
Number 012
CHAIR JAMES said this was not the first time and probably not the
last time in this legislative session that she would have to vote
for the Interior against Anchorage. She noted the committee had
heard from Anchorage legislators who have similar concerns as hers.
She didn't think this should be a regional issue, but rather it was
a statewide issue.
Number 034
REPRESENTATIVE PORTER made a motion to pass CSHB 136, Version W,
dated 4/28/96, out of the House State Affairs Committee.
Representative Willis objected.
CHAIR JAMES requested a roll call vote.
REPRESENTATIVE OGAN wished to make a statement before he voted. He
said he was going to vote to pass this bill out of committee. He
thought it was an issue that should be settled on the House floor.
It was not a motion to sell the railroad; it was simply a motion to
look at the options.
Number 068
CHAIR JAMES said this issue of whether or not to sell the railroad
is not going to go away if we don't pass this bill out or if we do
pass this bill out. It is an issue that must be dealt with and any
time there is an issue that is controversial, it must be dealt
with. Whether she agrees that this is necessary or not, there are
sufficient numbers of people in the state who want to deal with it
and the legislature must deal with it. She stated there was a
motion to move CSHB 136, Version W, out of committee and asked for
the roll call vote.
Voting in favor of the motion were Representatives Ogan, Green,
Ivan, Porter and James. Voting against the motion were
Representatives Robinson and Willis.
CHAIR JAMES announced that CSHB 136(STA) had passed out of the
House State Affairs Committee.
CSSCR 23(STA) am - LONG RANGE FINANCIAL PLANNING
Number 195
CHAIR JAMES announced the next item on the agenda was CSSCR 23(STA)
amended, which related to long range financial planning and she had
a committee substitute, Version K, dated 4/29/96. She noted the
Senate Rules Committee sponsored this legislation at the request of
the Long Range Financial Planning Commission. Chair James said she
would explain the committee substitute which she had drafted. She
said the changes from the original bill were made in the Senate
State Affairs Committee and passed through the Senate some time
ago. The proposed committee substitute changed the language on
page 1, line 9, from a $433 million estimated budget gap in FY 96
to an anticipated $313 million. She continued, "The other
statements that the fiscal gap is projected to grow steadily;
changes in projected revenue and expenditures could use up the
constitutional budget reserve by the year 2000 if we don't do
something about it; and the conclusion is that there is no single
fiscal tool sufficient to address the fiscal gap and that we have
to do several different things; the members of the Long Range
Financial Planning Commission were charged with developing a 3-, 5-
and 10-year plan; the permanent fund is a cornerstone of the
state's economic future, as well as it should continue to grow to
provide reliable dividends to the general public; that a financial
plan adopted by the legislature should contain a combination of
spending reductions and new revenue resulting from an expanded
economy that will close the gap by fiscal year 2001; whereas the
combination of the fiscal policies adopted by the legislature
should put the state on firm fiscal ground and strike a balance
between current needs and protection of the permanent fund for
future generations; and the Nineteenth State Legislature has
prepared a fiscal plan to close the fiscal gap which incorporates
the following: 1) as part of the plan to ensure maximum earnings
from the permanent fund, the legislature has deposited $1.1 billion
to the fund's principal; 2) significant spending reductions through
reasonable and responsible budget cuts; 3) tax levels that are less
than those proposed in other plans; and 4) protection for the
permanent fund and constitutional budget reserve fund. Therefore,
be it resolved that we will first reduce the size and scope of
state government to decrease the gap between recurring revenue and
recurring expenditures; and that in closing the fiscal gap and
developing a long range plan the legislature will prioritize
expenses by taking into account our constitutional responsibilities
and the needs of our children, the elderly, and our needy citizens;
and that further, we will make significant spending reductions
through means such as welfare reform, entitlement reform,
privatization of state services, and the institution of procedural
changes to state employees' pension, wage, and benefit package; and
be it further resolved that the legislature pledges to work with
all parties to implement this long range financial plan and meet
the needs and desires of the Alaskan people; and be it further
resolved that the Nineteenth legislature urges all Alaskans to
learn about Alaska's fiscal situation and support actions necessary
to close the fiscal gap; and that the legislature thanks all
members of the Long Range Financial Planning Commission for their
hard work and efforts to address the state's fiscal future and
assist the legislature in addressing the economic challenges we
face as a state. Copies of this resolution shall be sent to the
Honorable Tony Knowles, Governor of Alaska and to the members of
the Long Range Financial Planning Commission."
CHAIR JAMES noted that no one had signed up to testify. She asked
if there were comments or questions from committee members.
Number 357
REPRESENTATIVE OGAN expressed support for the Resolution but
proposed an amendment on page 2, line 9, to insert "from resource
development" after the word "economy". He said there are some
plans that would propose to expand the economy by using the
permanent fund to fund government at current levels or actually
expand the current levels of government. He didn't think the
economy should be expanded by the size of government. Realistically
at this time, revenues result from resource development and he
thought that should be the priority.
Number 408
REPRESENTATIVE PORTER offered a friendly amendment to the amendment
to insert "from an expanded private sector economy."
Number 420
REPRESENTATIVE OGAN agreed.
CHAIR JAMES restated the amendment on page 2, line 9, would insert
"private sector" following "expanded". Hearing no objection,
Amendment 1 was adopted. She asked if there was further
discussion.
Number 439
REPRESENTATIVE PORTER remarked this was the joint philosophy of the
joint caucuses which had been discussed for some time, so it
shouldn't strike anyone as a surprise. He moved to adopt and pass
HCS CSSCR 23, Version K, with individual recommendations out of
committee. Hearing no objection, HCS CSSCR 23(STA) moved from the
House State Affairs Committee.
CHAIR JAMES called an at-ease.
HB 136 - ESTABLISH ALASKA RAILROAD COMMISSION
Number 492
REPRESENTATIVE PORTER moved that Chair James prepare an appropriate
fiscal note to reflect the new committee substitute for HB 136.
CHAIR JAMES said a motion was before the committee to prepare a new
fiscal note in the amount of $250,000 for CSHB 136(STA). Hearing
no objection, the motion passed.
ADJOURNMENT
Number 547
There being no further business to come before the House State
Affairs Committee, CHAIR JAMES adjourned the meeting at 10:26 a.m.
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