Legislature(2015 - 2016)ANCH LIO
10/19/2016 08:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Executive Session: Pension Obligation Bonds | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
ANCHORAGE LEGISLATIVE INFORMATION OFFICE
October 19, 2016
8:08 a.m.
Note: The following meeting convened in the Anchorage
Legislative Information Office and was teleconferenced and
recorded in Juneau.
8:08:27 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 8:08 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair (via teleconference)
Senator Mike Dunleavy (via teleconference)
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
Senator Click Bishop
ALSO PRESENT
Laura Cramer, Staff, Senator Anna MacKinnon; Suzanne
Cunningham, Staff, Senator Kevin Meyer; Senator Cathy
Giessel; Senator Kevin Meyer.
PRESENT VIA TELECONFERENCE
David Teal, Director, Legislative Finance Division; Rob
Carpenter, Fiscal Analyst, Legislative Finance Division;
Megan Wallace, Attorney, Legislative Legal Services.
SUMMARY
^EXECUTIVE SESSION: PENSION OBLIGATION BONDS
8:09:30 AM
Co-Chair Kelly MOVED to CONVENE an executive session under
Uniform Rule 22 (b)(1) for discussion of matters, the
immediate knowledge of which would adversely affect the
finances of a government unit.
Co-Chair Kelly MOVED that the following individuals will be
allowed to attend the executive session:
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION
(via teleconference)
ROB CARPENTER, FISCAL ANALYST, LEGISLATIVE FINANCE
DIVISION (via teleconference)
MEGAN WALLACE, ATTORNEY, LEGISLATIVE LEGAL SERVICES
(via teleconference)
LAURA CRAMER, STAFF, SENATOR ANNA MACKINNON
SUZANNE CUNNINGHAM, STAFF, SENATOR KEVIN MEYER
There being NO OBJECTION, it was so ordered.
8:10:18 AM
EXECUTIVE SESSION
10:45:34 AM
RECONVENED
Co-Chair MacKinnon stated that the executive session
related to the pension obligation bonds. She stressed that
there was a problem in Alaska's pension system. She
announced that there was a $6.1 billion unfunded liability,
and the liquidity in the system was in jeopardy. She
stressed that the legislature wanted to ensure that there
was a healthy pension system. She shared that the governor
had proposed to solve the problem by issuing up to $3.3
billion of pension obligation bonds. She felt that it may
be irresponsible to borrow against equity, when there was
no immediate revenue to pay the bills. She explained that
the governor proposed issuing the bonds, if there could be
a borrowing rate of under 4 percent. She stated that there
was a resolution from the Pension Obligation Board which
had a borrowing rate of up to 4.25 percent.
Co-Chair Kelly remarked that the governor had a legal right
to propose the issuance of pension obligation bonds. The
governor was given that authority in a 2008 statute, which
allowed the governor to bypass the preparation process set
in law. He stressed that the governor was not outside the
bounds of legal authority. He pointed out that the state
was much different than it was in 2008, and felt that the
proposal may not be the best route. He remarked that the
Senate Finance Committee did not represent the entire
legislature, but communicated that there was some
resistance to the governor's proposal.
Senator Hoffman felt that the pension obligation bonds
issuance was not unreasonable. He remarked that the
governor had the option to sell the bonds, should a better
situation occur.
Vice-Chair Micciche agreed with the recent comments of the
other members.
ADJOURNMENT
10:51:18 AM
The meeting was adjourned at 10:51 a.m.
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