Legislature(2017 - 2018)SENATE FINANCE 532
03/06/2017 04:00 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB21 || SB26 || SB70 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 21 | TELECONFERENCED | |
| += | SB 26 | TELECONFERENCED | |
| += | SB 70 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
March 6, 2017
4:02 p.m.
4:02:23 PM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 4:02 p.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Mike Dunleavy
Senator Peter Micciche
Senator Donny Olson
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Senator Bert Stedman; Bill Corbus, Self, Juneau; John
Sonin, Self, Juneau.
PRESENT VIA TELECONFERENCE
David Otness, Self, Cordova; Paul Kendall, Self, Anchorage;
Dennis Watson, Mayor, Craig; Michael Brantley, Self,
Anchorage; Orin Seybert, Self, Anchorage; Bruce Jaffa,
Self, Moose Pass; Dave Hanson, Self, Anchorage; Jerry
Alderman, Self, Anchorage; Ben Mulligan, Deputy Director,
Alaska Chamber, Anchorage; Mike Coons, Self, Anchorage;
Marleanna Hall, Executive Director, Resource Development
Council, Anchorage; Clyde Boyer, Self, Homer; Earl Lackey,
Alaska Raceway Park, Mat-Su; Beth Fread, Self, Palmer;
Deantha Crocket, Executive Director, Alaska Miner's
Association, Anchorage; George Pierce, Self, Kasilof; David
Scott, Self, Juneau; Jeanine St. John, Self, Anchorage;
Michael Chambers, United for Liberty, Anchorage; Rebecca
Culley, Self, Anchorage; Karen Perry, Self, Chugiak; Chris
Eichenlaub, Self, Eagle River; Dayne Clark, Self, Soldotna;
Michael Garhart, Self, Wasilla; Garvan Bucaria, Self,
Wasilla; Daryl Nelson, Self, Chugiak; Lesa Hollen, Self,
Anchorage; Denny Kay Weathers, Self, Prince William;
William Topel, Self, Anchorage; David Nees, Self,
Anchorage; John Faulkner, Self, Homer; Kathie Wasserman,
Executive Director, Alaska Municipal League, Juneau; Bryan
Zak, Self, Homer; Tom Braun, Self, Sutton; James Squyres,
Self, Rural Deltana; William Deaton, Self, Cordova; Jesse
Bjorkman, Self, Nikiski; Bethany Andersen, Self, Kasilof;
Michael Shower, Self, Wasilla; Andree McLeod, Self,
Anchorage; Steve St. Clair, Self, Wasilla; Deborah
Brollini, Self, Anchorage; William Reiner, Self, Anchorage;
Pam Goode, Self, Rural Deltana.
SUMMARY
SB 21 PERMANENT FUND: INCOME; POMV; DIVIDENDS
SB 21 was HEARD and HELD in committee for further
consideration.
SB 26 PERM. FUND:DEPOSITS;DIVIDEND;EARNING
SB 26 was HEARD and HELD in committee for further
consideration.
SB 70 APPROP. LIMIT/BUDGET PROCESS/PERM FUND
SB 70 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 21
"An Act relating to appropriations from the income of
the Alaska permanent fund; relating to the calculation
of permanent fund dividends; and providing for an
effective date."
SENATE BILL NO. 26
"An Act relating to the Alaska Permanent Fund
Corporation, the earnings of the Alaska permanent
fund, and the earnings reserve account; relating to
the mental health trust fund; relating to deposits
into the dividend fund; relating to the calculation of
permanent fund dividends; relating to unrestricted
state revenue available for appropriation; and
providing for an effective date."
SENATE BILL NO. 70
"An Act relating to an appropriation limit; relating
to the budget responsibilities of the governor;
relating to the Alaska permanent fund, the earnings of
the Alaska permanent fund, and the earnings reserve
account; relating to the mental health trust fund;
relating to deposits into the dividend fund; relating
to the calculation and payment of permanent fund
dividends; and providing for an effective date."
4:04:02 PM
^PUBLIC TESTIMONY
4:04:09 PM
DAVID OTNESS, SELF, CORDOVA (via teleconference), spoke
against using money from the Permanent Fund Dividend (PFD).
He felt that it would negatively affect the people who
depend on the money from the PFD. He stressed that there
was serious government spending problems. He felt that
state employment was too high, and expressed disappointment
in the consideration of taking money from the PFD.
4:06:19 PM
PAUL KENDALL, SELF, ANCHORAGE (via teleconference),
encouraged the committee to take their time in considering
the bills. He felt that public employees could not be paid
more than those in the private sector. He understood that
Senator Dunleavy would introduce a plan that may be more
benefit to the state. He encouraged the legislature to
continue to make cuts, and eliminate public pensions. He
felt that a public employee could not be paid more than one
in the private sector, because then the person in the
private sector may be considered an "indentured servant."
He also felt that all public unions should be eliminated.
He felt that public employees should be paid between $10
and $20 per hour, and not be provided additional
compensation or benefits. He felt that the legislature
should return to Anchorage and have an open discussion. He
felt that there were many events that the legislature had
no control over, so the efforts of the legislature were
therefore futile.
Mr. Kendall stressed that the state had nearly $60 billion
in total revenue, but the state had been divided between
the bureaucrats and those that "want to be free." He hoped
that the legislature would make Anchorage the "hub of
Alaska", and form partnerships to resolve the state's
issues.
4:12:22 PM
DENNIS WATSON, MAYOR, CRAIG (via teleconference), spoke in
support of all three of the bills, but expressed his
specific support for SB 21. He felt that there should also
be additional cuts to state government.
4:13:46 PM
MICHAEL BRANTLEY, SELF, ANCHORAGE (via teleconference),
spoke against a state income tax, but spoke in support of a
sales tax in larger communities. He spoke against use of
the PFD. He encouraged the committee to split the PFD into
three: $19 billion for the PFD; $19 billion for the use to
balance the state budget; pay everyone in the state a
$45,000 check.
4:17:31 PM
ORIN SEYBERT, SELF, ANCHORAGE (via teleconference), spoke
in support of SB 70. He remarked that he did not know the
implications of the other bills. He felt that using the
earnings reserve could support the PFD. He also noted that
the fund would be inflation proof, so the fund would be
protected in perpetuity. He opposed any further budget
cuts, and the depletion of the constitutional budget
reserve (CBR). He felt that the income tax would provide a
higher return. He felt that there should be a reinstatement
of the school tax.
4:22:23 PM
BRUCE JAFFA, SELF, MOOSE PASS (via teleconference),
testified in support of a state income tax; partial
reduction of the PFD; reinstitution of the school tax; and
other taxes including fuel taxes, etc. He remarked that he
has paid various types of taxes in the time that he has
lived in the state. He felt that there would be difficult
decisions. He felt that any short term solutions may be
hasty, but he felt that using the PFD would not be a frugal
decision.
4:26:15 PM
DAVE HANSON, SELF, ANCHORAGE (via teleconference), spoke in
support of SB 70, with some slight modifications. He
supported the bills percent of market value (POMV)
endowment approach. He supported the 75 percent to general
fund; 25 percent to PFD separation for the earnings
reserve; and limiting the annual PFD to $1000, which was
almost equal to the average payout over 36 years. He
encouraged the committee to use 5 percent instead of 5.35
percent for the annual earnings reserve draw. He felt that
the spending cap should be a spending target. He encouraged
the committee to modify SB 70 inflation proofing with
procedures to assure the value of the permanent fund
principle would not be eroded. He felt that adequate
inflation proofing was a form of spending the principle,
and may be unconstitutional. He felt that there should be a
"claw back" of the $75 million of the $100 million given to
the state's pipeline development corporation, because they
could afford to sponsor a musher for $55,000. He encouraged
the legislature to enact the 16 cent over 2 year gasoline
tax increase. He testified in support of an income tax.
4:29:27 PM
JERRY ALDERMAN, SELF, ANCHORAGE (via teleconference), spoke
against additional cuts to the state budget. He testified
in support of SB 70.
4:30:20 PM
BEN MULLIGAN, DEPUTY DIRECTOR, ALASKA CHAMBER, ANCHORAGE
(via teleconference), spoke in support of SB 70. He felt
that the bill would create a stable and predictable economy
in the state. He shared that a spending cap was last
considered in 2015, with a 75 percent approval rate from
the members of the Alaska Chamber.
4:31:52 PM
MIKE COONS, SELF, ANCHORAGE (via teleconference), spoke
against the bills. He mentioned a plan from Senator
Dunleavy called, "The Fifty-Fifty Plan." He shared that
ExxonMobil was investing in the Gulf Coast. He remarked
that Alaska had the highest unemployment rate. He felt that
the bill would "steal" from the people.
4:34:30 PM
MARLEANNA HALL, EXECUTIVE DIRECTOR, RESOURCE DEVELOPMENT
COUNCIL, ANCHORAGE (via teleconference), felt that Alaska's
budget policy should concentrate first on finding
efficiencies and focusing on a series of annual reductions;
it must also include a framework to use the permanent fund
earnings to support essential services. She spoke in
support of SB 70. She felt that cautious and prudent use of
the earnings from state investments would strengthen the
economic viability of Alaska leading to increased private
sector investment in the natural resource industries.
4:37:07 PM
BILL CORBUS, SELF, JUNEAU, spoke in support of the bills,
but specifically urged support of SB 70. He felt that the
bill would provide money for the principle of the permanent
fund.
4:38:52 PM
CLYDE BOYER, SELF, HOMER (via teleconference), spoke in
support of implementation of a state income tax. He felt
that the state budget had been adequately reduced.
4:40:55 PM
EARL LACKEY, ALASKA RACEWAY PARK, MAT-SU (via
teleconference), felt that there were more cuts that could
be implemented into the state budget. He spoke in support
of Senator Dunleavy's "Fifty-Fifty Plan." He felt that the
reduced PFD made a negative impact on the economy.
4:43:44 PM
BETH FREAD, SELF, PALMER (via teleconference), spoke
against an income tax and use of the PFD until the state
budget was reduced to $8.8 billion. She spoke about a bill
from Senator Dunleavy.
4:46:52 PM
DEANTHA CROCKET, EXECUTIVE DIRECTOR, ALASKA MINER'S
ASSOCIATION, ANCHORAGE (via teleconference), spoke in
support of immediate implementation of a long-term fiscal
plan in 2017 to ensure responsible spending at a
sustainable level of between $4.1 and $4.5 billion. She
felt that the plan should include a budget reduction; the
use of permanent fund earnings; and new revenue from broad-
based taxes. She remarked that, in order to reduce state
government expenses, the legislature should repeal laws
that created expenditures that were not a necessary
government function.
4:48:36 PM
GEORGE PIERCE, SELF, KASILOF (via teleconference), spoke in
opposition to the bills and restructuring the PFD. He
recounted that when the PF was set up, it was intended to
benefit Alaskans, not to balance the budget. He mentioned
population growth. He thought the bills should be called
"The Destruction Act of the PFD." He discussed tourism and
non-resident workers; and suggested there should be an
income tax for such individuals. He thought the oil
companies should be taxed. He thought that tax credits
should be abolished. He did not think tax credits would
contribute to future revenue.
4:52:59 PM
DAVID SCOTT, SELF, JUNEAU (via teleconference), testified
in opposition to the bills and using the permanent fund. He
relayed that he had worked in the oil and gas industry.
4:54:17 PM
JEANINE ST. JOHN, SELF, ANCHORAGE (via teleconference),
spoke in support of SB 70. She was thrilled that former
Commissioner Bill Corbus supported the bill.
4:56:09 PM
MICHAEL CHAMBERS, UNITED FOR LIBERTY, ANCHORAGE (via
teleconference), spoke against reductions to the PFD. He
felt that the money was taken from the private sector to
the public sector.
4:59:20 PM
REBECCA CULLEY, SELF, ANCHORAGE (via teleconference), felt
that families who make less than $50,000 should not be
taxed in the state. She stressed that many people living in
the rural communities must receive a PFD. Those individuals
could barely afford the cost of fuel. She spoke against
additional budget cuts, specifically to the Department of
Education and Early Development (DEED). She encouraged the
committee to reduce the oil and gas tax credits, and an
increase in the fuel tax.
5:03:33 PM
KAREN PERRY, SELF, CHUGIAK (via teleconference), spoke
against the bills. She encouraged the committee to continue
to cut the budget. She spoke against the legislature as a
whole.
5:07:49 PM
CHRIS EICHENLAUB, SELF, EAGLE RIVER (via teleconference),
remarked that a previous legislature had attempted to use
the permanent fund to fix a budget deficit, with no
success. He stressed that college age people depend on the
PFD to attend school, and other people who were on the
verge of homelessness because of the reduction in the PFD.
He was in support of a plan offered by Senator Dunleavy.
5:11:52 PM
DAYNE CLARK, SELF, SOLDOTNA (via teleconference), spoke
against the bills. He felt that the permanent fund should
not be used to pay the people. He felt that the PFD program
should be eliminated.
5:16:01 PM
MICHAEL GARHART, SELF, WASILLA (via teleconference), shared
that his brother would often see that there was $1 to $3
billion missing from the revenue, and never received an
explanation for that missing money. He felt that the budget
should be cut, and noted that large size of government. He
stressed that many people relied on the PFD, and felt that
the PFD should not be adjusted.
5:18:24 PM
GARVAN BUCARIA, SELF, WASILLA (via teleconference), spoke
in opposition to the bills, and any bills that would use
the earnings reserve.
5:21:53 PM
DARYL NELSON, SELF, CHUGIAK (via teleconference), spoke in
opposition to the bills. He encouraged the committee to
create a state sales tax.
5:26:47 PM
LESA HOLLEN, SELF, ANCHORAGE (via teleconference), felt
that the permanent fund was created for the people of
Alaska, not for political gains and greed. She shared her
personal experience related to the economy in Alaska.
5:31:09 PM
JOHN SONIN, SELF, JUNEAU, felt that subsidizing large
corporations and lobbyists were the reason for the budget
crisis. He spoke in support of an income tax. He spoke
against reduction to the PFD, and wondered whether there
could be a needs-based PFD.
5:35:03 PM
DENNY KAY WEATHERS, SELF, PRINCE WILLIAM (via
teleconference), spoke against the bills. She felt that SB
70 was confusing and contained too many issues for one
bill. She encouraged the committee to examine Senator
Dunleavy's plan.
5:39:30 PM
WILLIAM TOPEL, SELF, ANCHORAGE (via teleconference), spoke
against the bills. He spoke in support of Senator
Dunleavy's bills: SB 1 and SB 2 to restore the other halt
of the previous year's PFD. He encouraged that committee to
listen to the people of Alaska, rather than special
interest groups.
5:43:24 PM
DAVID NEES, SELF, ANCHORAGE (via teleconference), testified
in support of SB 70, but remarked that he did not
particularly support any of the bills.
5:45:23 PM
JOHN FAULKNER, SELF, HOMER (via teleconference), spoke
against SB 26 and SB 70. He felt that there should be
careful consideration with all actions. He shared that
there was optimism in the immediate future in the state to
develop its gas resources. He stated that he was in favor
of Senator Dunleavy's plan.
5:48:44 PM
KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, JUNEAU (via teleconference), testified in support
of the bills. She felt that the bills were a great start to
fix the state's fiscal situation.
5:50:44 PM
BRYAN ZAK, SELF, HOMER (via teleconference), spoke in
support of the bills. He remarked that there were elements
of each of the bills that he found useful.
5:53:47 PM
TOM BRAUN, SELF, SUTTON (via teleconference), testified
against the bills. He urged the committee to continue to
cut the budget.
5:55:18 PM
JAMES SQUYRES, SELF, RURAL DELTANA (via teleconference),
spoke in support of the plan from Senator Dunleavy. He
spoke against the bills. He felt that some legislators were
circumventing the will of the people in favor of big
government.
5:57:34 PM
WILLIAM DEATON, SELF, CORDOVA (via teleconference), spoke
against the bills. He wanted the full PFD. He spoke in
support of Senator Dunleavy's plan. He remarked that there
were various agencies that could see reductions.
5:59:52 PM
JESSE BJORKMAN, SELF, NIKISKI (via teleconference),
supported stable plan for Alaska's fiscal future. He spoke
in support of Senator Dunleavy's plan.
6:02:21 PM
BETHANY ANDERSEN, SELF, KASILOF (via teleconference), spoke
against the bills. She did not feel that it was a
sustainable solution.
6:05:13 PM
MICHAEL SHOWER, SELF, WASILLA (via teleconference), spoke
against the bills. He spoke in support of Senator
Dunleavy's plan.
6:08:13 PM
ANDREE MCLEOD, SELF, ANCHORAGE (via teleconference),
testified against the bills. She spoke in support of
Senator Dunleavy's bills. She noted that Governor Walker
had implemented a hire and travel freeze, but there was a
recent high travel compensation report. She felt that
travel costs could be reduced, because of the possibility
for teleconferencing. She spoke against the use of the PFD.
She wondered about the purchasing of office uniforms.
Co-Chair MacKinnon replied that she had purchased her staff
kuspuks.
6:12:08 PM
STEVE ST. CLAIR, SELF, WASILLA (via teleconference),
opposed the bills. He felt that combining three bills into
two hours of testimony was "disingenuous." He felt that
there was not adequate time for public testimony. He spoke
in support of Senator Dunleavy's plan.
6:16:05 PM
DEBORAH BROLLINI, SELF, ANCHORAGE (via teleconference),
spoke against the bills. She shared a personal story. She
urged more cuts to the operating budget.
6:18:46 PM
WILLIAM REINER, SELF, ANCHORAGE (via teleconference),
testified against the bills. He felt that the models were
created for a different system.
6:22:05 PM
PAM GOODE, SELF, RURAL DELTANA (via teleconference), spoke
against the bills. She felt that there would be an
inappropriate relationship between the government and the
permanent fund corporation. She felt that there was too
much trust between the people and the government.
Co-Chair MacKinnon CLOSED public testimony.
6:25:31 PM
AT EASE
6:25:59 PM
RECONVENED
Co-Chair MacKinnon discussed the following day's agenda.
SB 21 was HEARD and HELD in committee for further
consideration.
SB 26 was HEARD and HELD in committee for further
consideration.
SB 70 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
6:26:46 PM
The meeting was adjourned at 6:26 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 70, SB 26, SB 21 Letters of Opposition.pdf |
SFIN 3/6/2017 4:00:00 PM |
SB 21 SB 26 SB 70 SB 70, SB 26 |
| SB 70, SB 26, SB 21 Letters of Support.pdf |
SFIN 3/6/2017 4:00:00 PM |
SB 21 SB 26 SB 70 SB 70, SB 26 |
| SB 70, SB 26, SB 21 Opposition Public Testimony.pdf |
SFIN 3/6/2017 4:00:00 PM |
SB 21 SB 26 SB 70 |
| SB 70, SB 26, SB 21 Support Public Testimony 2.pdf |
SFIN 3/6/2017 4:00:00 PM |
SB 21 SB 26 SB 70 |