Legislature(2001 - 2002)
03/22/2002 09:38 AM Senate FIN
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MINUTES
SENATE FINANCE COMMITTEE
March 22, 2002
9:38 AM
TAPES
SFC-02 # 40, Side A
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 9:38 AM.
PRESENT
Senator Dave Donley, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Loren Leman
Senator Lyda Green
Senator Gary Wilken
Senator Alan Austerman
Senator Donald Olson
Senator Lyman Hoffman
Also Attending: REPRESENTATIVE FRED DYSON; DEBORAH GRUNDMANN,
Staff to Senator Ben Stevens; PAUL GROSSI, Director, Division of
Workers' Compensation, Department of Labor and Workforce
Development
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
HB 349-AGENCY PROGRAM AND FINANCIAL PLANS
The Committee heard from the sponsor. The bill moved from
Committee.
SJR 38-CONST AM: PRIORITY OF EXPENDITURES
The Committee heard from the sponsor of HB 349. The bill moved from
Committee.
SCR 29-HIRING FREEZE
The Committee heard from the sponsor. The bill moved from
Committee.
SJR 37-CONST AM: HIRING FREEZE
The Committee heard from the sponsor. The bill moved from
Committee.
SB 299-WORKERS' COMPENSATION BOARD PANELS
The Committee heard from the sponsor and the Department of Labor
and Workforce Development. An amended amendment was adopted and the
bill moved from Committee.
SB 338-INELIGIBILITY FOR PFD/ CRIME VICTIMS COMP
The Committee heard from the sponsor. A committee substitute was
adopted and the bill moved from Committee.
HOUSE BILL NO. 349
"An Act relating to agency programs and financial plans."
This was the second hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE FRED DYSON commented that nothing has changed since
the previous meeting except that he has become more convinced of
the "wisdom" of the Administration prioritizing budget requests.
Representative Dyson reminded of Senator Wilken's suggestion to
rate priorities in categories rather than a "strict" numerical
ranking of all department activities, which he supported.
Representative Dyson also supported the proposed constitutional
amendment that would allow the Legislature to enforce this
legislation.
Co-Chair Donley offered a motion to report HB 349 from Committee
with a zero fiscal note from the Office of Management and Budget
for all state agencies.
Without objection the bill MOVED from Committee.
SENATE JOINT RESOLUTION NO. 38
Proposing amendments to the Constitution of the State of
Alaska relating to information regarding proposed
expenditures.
This was the first hearing for this resolution in the Senate
Finance Committee.
Co-Chair Kelly noted this constitutional amendment allows the
previous bill, HB 349, to be implemented.
Representative Dyson relayed his experiences serving on the
Anchorage Assembly where a similar prioritization process is in
use. He noted this process was never codified in law, but is
nonetheless effective and had been "greatly refined".
Representative Dyson shared discussions on this legislation with
Annalee McConnell, former leader of the budget department in the
Municipality of Anchorage and current director of the state's
Office of Management and Budget. He noted they talked about the
process employed in the Municipality, whereby the budget analysts
were required to calculate the "exact cost of every component of
every output of every department." He relayed Ms. McConnell's
concerns that these efforts were wasted for those programs that
were of either very high priority, and would not be eliminated, or
low priority and would not receive funding. He countered there is a
benefit for the legislative body to know the cost of all operations
regardless of whether those functions were considered for
reductions.
Senator Ward asked how the items in the Municipality of Anchorage
budget are prioritized.
Representative Dyson replied that the services and outputs are
ranked from most valuable to least valuable by the departments.
Senator Olson asked about transferring this method from a single
municipality to the state, which has more complexity.
Representative Dyson replied this principal is universal, is
practiced by individuals and businesses, and is therefore
reasonable to expect of the state.
Representative Dyson noted the municipality system identifies those
expenditures that are statutory required, those that are
constitutionally mandated, and those that are supported by user
fees. He suggested the state employ this method as well. These
functions, he stressed, would become higher priorities. He stressed
his intention is not to "take a sledgehammer or meat cleaver
approach" but rather one that is thoughtful and rational.
Senator Austerman asked what timeframe would be provided to the
Administration to allow this prioritization process to be
undertaken within the normal budget cycle.
Co-Chair Kelly responded this constitutional amendment only allows
the Legislature the authority to require the Administration to
perform prioritization. He stated that statutes would be the
appropriate venue to provide for an implementation timeframe. He
anticipated statutory changes would be necessary to "refine the
process".
Senator Green offered a motion to report SJR 38 from Committee with
a $1,500 fiscal note from the Office of the Governor, Division of
Elections.
The bill MOVED from Committee without objection.
SENATE CONCURRENT RESOLUTION NO. 29
Relating to urging the Governor to institute a hiring freeze
on state government.
This was the second hearing for this resolution in the Senate
Finance Committee.
Co-Chair Kelly noted this resolution would implement a hiring
freeze identical to one implemented in 1999. He was unsure the
effects of the earlier freeze, but stressed it is reasonable for a
governor to implement a hiring freeze when there are budget
difficulties similar to the current situation.
Co-Chair Kelly mentioned a similar hiring freeze currently
occurring in the State of Washington and noted other Governors are
implementing similar hiring freezes.
Co-Chair Kelly commented that the current Administration, in the
face of budget gaps, has actually proposed increasing expenditures
and has not made an adequate effort to manage the budget problem.
Co-Chair Kelly referenced a 1999 press release issued by Governor
Tony Knowles when he implemented the earlier hiring freeze, and
articles from the Seattle Post Intelligence regarding the
Washington State hiring freeze [copies on file.]
Senator Green offered a motion to report SCR 29 from Committee.
There was no objection and the bill MOVED from Committee.
SENATE JOINT RESOLUTION NO. 37
Proposing an amendment to the Constitution of the State of
Alaska relating to officers and employees of the executive
branch.
This was the first hearing for this resolution in the Senate
Finance Committee.
Co-Chair Kelly testified this constitutional amendment gives the
Legislature authority to "cross the separation of powers lines" and
direct the Executive Branch to implement a hiring freeze. He noted
this would not affect the current Governor, but could be utilized
by future legislatures during budget shortfalls.
Co-Chair Kelly spoke to the use of hiring freezes during budget
crises by "managers all over the world" and "governments all over
the country".
Senator Ward offered a motion to move from Committee, SJR 37 with
$1,500 fiscal note from the Office of the Governor, Division of
Elections.
Without objection the bill MOVED from Committee.
SENATE BILL NO. 299
"An Act relating to the establishment of an additional
southcentral panel to the Alaska Workers' Compensation Board
and to appointments to that panel; and providing for an
effective date."
DEBORAH GRUNDMANN, Staff to Senator Ben Stevens, Chair of the Labor
and Commerce Committee, testified this legislation would amend the
Workers' Compensation Act to provide for an additional panel for
the Alaska Workers' Compensation Board in the "southcentral venue".
She referenced a map of the affected area [copy on file.]
Ms. Grundmann stated this legislation is necessary to allow more
hearings to occur in that area of the state and subsequently reduce
the "lag time" between the date a worker files a claim, and a
hearing date. She noted it would also relieve a growing caseload.
Senator Leman asked if these hearing panels function for the
duration of one hearing then disband, or whether they are standing
committees that address multiple cases.
PAUL GROSSI, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development, explained the panels
are comprised of members of the Workers' Compensation Board. He
detailed how the members are appointed by the Governor, confirmed
by the Legislature and serve a term of office.
Senator Olson asked how this legislation would benefit the "common
worker", aside from timely resolution of claims.
Mr. Grossi answered the worker benefits from decisions rendered
sooner. He noted this also benefits employers in that
administrative and legal expenses are incurred over a shorter
period of time and additionally benefits the Department in that
fewer resources are necessary. He explained this legislation would
impact the disputed cases.
Senator Olson spoke to the high cost of workers compensation to
employers. He asked if small businesses and small municipalities
would be adversely impacted financially by this legislation.
Mr. Grossi replied this legislation would have no impact on the
panel. He stated that if the time lag were reduced, the overall
costs would be somewhat reduced as well.
AT EASE 10:00 AM / 10:25 AM
Amendment #1 as AMENDED: This amended amendment deletes "take
effect" and inserts "be made" and deletes "July 1, 2002" and
inserts "January 1, 2003" on page 2, line 6. The amended language
reads as follows.
TERMS AND INITIAL APPOINTMENTS. (a) The governor shall
expeditiously make initial appointments to the new
southcentral panel of the Alaska Workers' Compensation Board,
authorized by sec. 1 of this Act. The appointments made under
this subsection may not be made before January 1, 2003.
This amendment also deletes Sections 3 and 4, relating to effective
dates, on page 2, lines 14 and 15 and inserts a new bill section to
read as follows.
Sec. 3. This Act takes effect January 1, 2003.
Senator Leman offered a friendly amendment the original amendment,
which did not include "take" in language to be deleted from page 2,
line 6. He moved for adoption of the amended amendment.
Without objection the amended amendment was ADOPTED.
Senator Wilken spoke as a business operator, stressing that
workers' compensation is one of the most expensive aspects of his
business. He expressed he would do whatever he could as a
legislator to make the workers' compensation process more efficient
and less burdensome, while also recognizing that injured workers
must be compensated.
Senator Green offered a motion to move CS SB 299 (FIN) from
Committee with $5,000 fiscal note from the Department of Labor and
Workforce Development.
The bill MOVED from Committee with no objection.
SENATE BILL NO. 338
"An Act making certain individuals convicted of crimes
ineligible for permanent fund dividends and relating to
certain payments of compensation from the crime victim
compensation fund; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley spoke to a proposed committee substitute to address
language in the original bill that he was informed was
unconstitutional relating to the Child Support Enforcement Division
in the Department of Revenue. He explained the committee substitute
provides that the Division retains access to permanent fund
dividends of those Alaskans who owe child support.
Co-Chair Donley moved for adoption of CS SB 338, 22-LS1190\S as a
working draft.
Senator Green clarified that Section 10 is current practice and
would not be perceived as the Legislature "taking money" from the
Division.
Co-Chair Donley affirmed and explained this is the same process
applicable to funds "reprogrammed" from convicts' dividends to
Alaska Council on Domestic Violence and Sexual Assault and the
Victims' Compensation Fund.
Co-Chair Donley anticipated new fiscal notes for the committee
substitute.
Co-Chair Donley offered a motion to report CS SB 338 (FIN) from
Committee with forthcoming fiscal notes from the Department of
Administration, Department of Education and Early Development,
Department of Law, Department of Public Safety, and Department of
Revenue.
The bill MOVED from Committee without objection.
ADJOURNMENT
Co-Chair Pete Kelly adjourned the meeting at 10:32 AM
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