Legislature(2015 - 2016)Anch LIO Rm A,B,C
06/03/2015 08:30 AM Senate CONFERENCE COMMITTEE ON HB2001
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* first hearing in first committee of referral
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29TH ALASKA STATE LEGISLATURE (YEAR ONE)
SECOND SPECIAL SESSION
CONFERENCE COMMITTEE ON HB 2001
June 3, 2015
8:52 a.m.
[Note: Meeting was held in Anchorage, Alaska at the
Anchorage Legislative Office.]
8:52:21 AM
CALL TO ORDER
Chair Neuman called the Conference Committee meeting on HB
2001 to order at 8:52 a.m
MEMBERS PRESENT:
House:
Representative Mark Neuman, Chair
Representative Steve Thompson
Representative Les Gara
Senate:
Senator Pete Kelly, Vice-Chair
Senator Anna MacKinnon
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT:
Aides to committee members and other members of the
Legislature.
SUMMARY
HB 2001 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 2001 was HEARD and HELD in committee for
further consideration
CS FOR HOUSE BILL NO. 2001(FIN) am
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; making appropriations for the
operating expenses of the state's integrated
comprehensive mental health program; capitalizing
funds and repealing appropriations; 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."
and
SENATE CS FOR CS FOR HOUSE BILL NO. 2001(FIN)
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs and capitalizing funds; repealing
appropriations; 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."
8:53:03 AM
Chair Neuman relayed that limited powers of free Conference
were granted by both the House and the Senate. He conveyed
that the committee would be addressing open items 1, 6, 7,
8, 9, 10, 11, 12 and 15 based on the motion sheets
distributed to members and dated June 2.
Vice-Chair Kelly MOVED to ADOPT the following:
Item 1 House
Item 6 House
Item 7 House
Item 8 House
Item 9 House
Item 10 House
Item 11 House
Item 12 House
Item 15 House
Chair Neuman OBJECTED for the purpose of discussion.
Chair Neuman reviewed each of the action items. Item 1
appropriated monies for the K-12 base student allocation
(BSA) in the amount of $16.5 equal to $5,880 per student;
Item 6 provided funding in the amount of $700 thousand for
early learning for the Parents as Teachers Program; Item 7
apportioned money in the amount of $2 million for Pre-
kindergarten grants; Item 8 conveyed $2.5 million to fund
front line social workers within the Office of Social
Services (OCS); Item 9 provided $2.8 million in funding for
the Senior Benefits Payment Program; Item 10 funded an
additional $1.75 million for the Alaska Marine Highway
System for marine vessel operations; Item 11 supported an
additional $5 million to the University of Alaska's budget;
Item 12 subsidized $250 thousand for Public Communications
Services and Public Broadcasting Radio. The total for the
listed items equaled $15 million. He reported that because
of the $2.5 million increase to OCS's budget for front line
social workers the state would receive federal matching
funds in the amount of $681.7 thousand.
8:55:34 AM
Representative Gara recognized that the one item not
addressed in the current committee hearing was the previous
agreement between the House Republicans, House Democrats,
and House Independents to honor the already-negotiated wage
contracts. He felt that the legislature had moved the goal
post backwards. He relayed that the House had a deal, which
he understood did not include the Senate. However, there
was a deal that crossed party lines within the House prior
to pink slips being issued. He opined that the legislature
should have had a budget. He informed the committee that he
understood the Senate was a separate body. He asserted that
there was a significant amount of give and take. He thought
that the current deal in the legislature was similar to a
home purchase agreement in which a purchase price was
agreed upon and then changed a few days later.
Representative Gara reasoned that the Senate wanted to save
additional money which he understood. However, he expressed
frustration with being voted down on his method of saving
state money. He believed there were smarter ways to save
money than to break a wage agreement which increased wages
by 1 percent the first year, 1 percent the second year, and
2.5 percent the third year. He claimed that the total
increase for the three years stayed behind inflation. He
furthered that the state employees did not get the agreed-
to salary increases while contrastingly oil companies
received $600 million more than what was promised to them
under Alaska's statutes. He wanted to attempt to discuss
the issue one more time in order to see if it was a way to
save money.
Chair Neuman redirected Representative Gara to limit his
discussion to the current agenda items. He also asked
Representative Gara to limit his comments to his own
thoughts rather than the thoughts of others.
Representative Gara speculated that the state could easily
save $50 million, $100 million, or $200 million by slowing
down the payment that was currently an overpayment of oil
tax credits. He understood that the state was allowed to
make overpayments but did not feel it was the right thing
to do in tight financial times. He referenced a statute
limit of $91 million. He opined that the oil companies were
the only entities getting a good deal.
Representative Gara commented on education funding. He
reported that there had been an agreement with House
members made the previous Friday about education dollars.
Although his caucus was in favor of reinstating the $32
million one-time funding that was placed in statute the
previous year, he understood the need for compromise. His
caucus agreed to leave the one-time funding out of the
budget. He asserted that he stood by the agreement made the
previous Friday. He commented that the budget did not have
everything he liked or wanted, but it was a compromise. His
aim was to work together to reach an agreement and asserted
that a budget should have already passed with the deal made
the prior Friday.
9:00:54 AM
Vice-Chair Kelly stated that the governor signed a bill [HB
72] into law which rejected the monetary terms for meeting
the state's collective bargaining unit agreements for pay
raises; the cost of living adjustments (COLA) for union
state employees. He stressed that the language in the bill
survived both bodies [House and Senate]. He commented that,
as far as working across party lines, there were a number
of democrats in the House Majority that negotiated and came
to an agreement. In the Senate there was a Democrat in the
majority and a Democrat on the finance committee. The labor
agreements were negotiated, talked about, and discussed in
the open. The language survived both bodies in a 90 day
process laid out in the state's constitution. He
acknowledged what had been agreed upon across party lines.
In addition, he reported that the statutes required the
contracts to have language in them that was subject to
appropriation by the legislature. He reiterated that the
legislature followed what was allowed in the contracts
negotiating across party lines and had reached the current
circumstance.
Vice-Chair Kelly clarified that with the current action
items the committee would be giving money to education, to
social workers, to the University of Alaska, and more. He
summarized that the Senate started with $860 million in
reductions to the state's operating budget, lessened its
cuts an additional $50 million in its negotiations with the
House, and currently suggested lowering cuts by another $31
million. All of the negotiations were being done out in the
open. He remarked that the obvious discussion was about
giving pay raises at a time when the state had no business
doing so due to an $8 billion debt tsunami. He reiterated
that the disagreement was whether the state should give pay
raises while facing an $8 billion deficit or do the
responsible thing by dispensing funds in the most
distributive way through education. He made it clear that
the Senate Majority and the House Majority felt that it was
far more responsible and beneficial to Alaskans to give
money to education, social workers, and to the university
system than to fund pay raises.
9:05:17 AM
Representative Thompson asked if the committee was
discussing Item 3 or the open items.
Chair Neuman began to clarify the items being addressed.
Representative Thompson interjected that the committee was
currently discussing Item 3.
Chair Neuman remarked that the committee should keep to the
open items.
9:05:47 AM
Senator MacKinnon thanked Chair Neuman for working
diligently and advocating for the House's position as it
was brought forward to the Conference Committee. She
reported that she was elected by a group of people from a
conservative community who believed that the state needed
to take a hard look in tough fiscal times at right sizing
government. She was elected by her constituents who were
trusting her to represent all of Alaska. She mentioned that
her co-chairman spoke to the huge deficit tsunami that the
state was facing and to trying to come up with a solution
together without pointing fingers. She felt that what was
being proposed was a compromise. She relayed that the
Senate said everything was on the table. She furthered that
the Senate planted $16.1 million outside of the base
student Allocation (BSA) for education to widen the goal
post. She did not support the characterization that the
Senate brought less to the table or that the Senate moved
the goal post inside. She believed that the goal post was
planted outside. She clarified that when the Senate rolled
out its compromise that it was headed for Conference
Committee. She pointed out that the Senate offered $16.1
million of additional spending in a range and that it
proposed to accept $31 million of new spending with the
support of the Senate caucus in a time the state was
drawing funding from savings.
Senator MacKinnon restated that the Senate's offer was a
compromise and that every single one of the spending items
that were conveyed by the House were accepted. She asked
Chair Neuman to confirm that the compromise included $15
million in new spending and all of the individual requests
were included.
Chair Neuman agreed that the $15 million of outside funding
was included. He noted that he felt the offer was presented
such that the $15 million could be spent at the minority's
discretion. He suggested that the money could be used to
fund education outside the BSA or anywhere the minority saw
fit.
Senator MacKinnon concurred that the Senate stepped up with
an additional $15 million of spending in the operating
budget and left it up to the House Minority and the House
Majority to allocate the funds. She stated that spending
was very important in terms of right sizing government. She
felt that it was important to get the state's house in
order and to make sure the people working for the state
received the benefits promised them. She also wanted to be
sure that promises were sustainable. She concluded that the
problem the Senate was facing was the difficulty of taking
on recurring spending. She explained that the Senate placed
$16.1 million for education outside the foundation formula
to make sure everyone was involved in right sizing
government with education being the Senate's highest
priority. She opined that it was really about jobs. She
suggested that the people that will get laid off will be
new families not necessarily those that have been with the
state for 10 to 20 years. She felt that the Senate was
compromising and has tried to accommodate the agreement
reached in the House. The Senate also had items that it
wanted to negotiate as well. She specified that, as the co-
chairs of both the Senate and House had already stated, the
negotiations needed to take place in front of the general
public so that it would not be hearsay whether the Senate
was willing to compromise. Members agreed that education
was the highest priority. However, she contended that with
education taking $1.3 billion and Health and Social
Services taking $1.3 billion and held harmless then the
rest of the state would be picking up all of the cuts. She
reported that some departments were taking a 30 percent
cut. She stated that it was not about the state's highest
priority it was about money being available. She
appreciated the good faith efforts on behalf of the House
Minority and Majority and wanted to demonstrate to the
public that the Senate was ready to discuss reconciliation
and to put forward a fully-funded budget.
9:11:22 AM
Vice-Chair Kelly clarified that the $15 million could be
spent in any way the minority wanted to within the context
of what was on the table in Conference Committee. He
pointed out that members were limited to the topics at hand
and with the caveat that the funds be distributed within
the group and not for pay raises.
9:11:57 AM
Representative Gara stated that it was not about spending.
He wanted the public to understand that the legislature
could go outside the confines of the items identified by
waiving Uniform Rule 42B and addressing other items. He
reiterated that it was not about spending. As the
legislature moved forward, he hoped some of the $250
million worth of budget savings and spending cuts the
minority caucus proposed would be considered in order to
change the deal. He indicated that if he voted "yes" on the
open items he would not be voting "yes" on the deal that
was being proposed. He asked if the wage agreement was
currently an open item.
9:13:04 AM
Chair Neuman conveyed that what was being offered was what
was in front of the Conference Committee.
The offer was to accept the open items currently being
addressed. If the items were accepted he would close the
Conference Committee.
Representative Gara asked if a "yes" vote would close the
Conference Committee.
Chair Neuman responded affirmatively. He stated that
accepting the items would close the Conference Committee.
Representative Gara responded, "I cannot do that, Mr.
Chair."
Chair Neuman stated that his intent was to put the items on
the table. All of the members of the Conference Committee
would have an opportunity to confer with their respective
caucuses before returning from a recess. The committee
would reconvene once a decision was made. He wanted to make
sure the public was aware of the discussion. He did not
think the committee would be closing out presently. His
plan was to recess once the discussion was over.
9:14:08 AM
Representative Thompson clarified that the only items being
discussed were Items 1, 6, 7, 8, 9, 10, 11, 12, and 15. He
also wondered if the other items not being address would be
addressed at another time.
Chair Neuman responded that the items would be addressed
one way or another.
Vice-Chair Kelly interjected that he thought items had to
be addressed with a motion.
9:14:31 AM
Representative Thompson wanted to make sure that the other
items would be addressed because he felt that a deal had
been made. He suggested that the House did compromise after
30 days of working many hours, many nights, and seven days
a week. He relayed that he had not been home in over a
month. He mentioned that when the House had come up with a
compromise agreement he felt as if it was a handshake
saying "yes." He asserted that he had never been a person
to go back on his word. He did not see how he could. He
remarked that his word was all he had. He wanted to make
sure that the other items would be addressed because they
meant something.
Chair Neuman confirmed that the open items would be
addressed first and there would be further discussions.
9:15:22 AM
Senator Olson asked if the committee would be taking a vote
during the meeting. Chair Neuman responded in the negative.
Senator Olson asked if they could continue a discussion
after the meeting recessed. Chair Neuman responded
affirmatively.
Senator MacKinnon wondered if she heard correctly that the
items that the Senate was agreeing to were not enough.
9:15:58 AM
Representative Gara thought that there was confusion. He
stated that the items in Conference Committee along with
the items agreed upon in the House would constitute a deal.
He was not going back on his word. He furthered that the
bill that passed the House was a compromise and he would
not go back on his word. He avowed that his word was his
bond. He continued that it appeared that the terms were
changing. He suggested that there needed to be clarity. He
wanted to better understand about agreeing to certain
items.
9:16:43 AM
Chair Neuman explained that the open items were the only
items being discussed. He further clarified that any
previous compromises were voted on and either passed or
failed just like any other legislation. He pointed out that
the committee was a different committee and that committee
members were only addressing what was before them
currently. He reiterated that what was before the committee
could be accepted in full or in part, but limited to the
open items. He stated that the open items were all up for
discussion. He stressed that anything voted on in the past
was in the past. He asserted that the committee was
starting over again with the current open items.
Chair Neuman affirmed the importance of funding education
as heard from many Alaskans during public testimony. He
understood that the Senate compromised by placing $16.5
million inside the BSA formula rather than one-time funding
outside the BSA, as originally proposed. He also addressed
the additional $15 million that was being added to the
budget. He relayed that members from the minority had asked
him if the $15 million in additional monies could be put
towards education funding outside of the BSA which he
confirmed was possible.
Chair Neuman returned to what was mentioned earlier that
the oil credits were currently due and that the payment was
an overpayment. He emphasized that the payment was a
payment due to the state. He summarized that the open items
on the motion sheets in front of the committee made up an
offer brought forward in good faith. He specified that the
committee would continue to work [on a compromise]. He
explained that what was before the committee for
consideration was what was contained in the motion sheets.
He stated that any one of the items could be accepted or
denied. He pointed out that it was a different day, a
different piece of legislation, and a different committee.
He reported that the committee would continue to discuss
the items. He specified that he would be recessing the
meeting to the call of the chair with the hopes that
following a break the parties would get together to support
the present motion.
9:19:32 AM
Senator MacKinnon took a moment to thank members of the
legislature, particularly those who were away from their
families or struggling. She also offered birthday wishes to
Senator Kelly.
Chair Neuman commented on some of the sacrifices
legislators and staff made in order to do the state's work.
He emphasized that there was a significant amount of work
being done by a number of committed people in the midst of
a state fiscal crisis.
Vice-Chair Kelly qualified his statement that it was not
about him in particular but representative of what everyone
was going through. He informed the committee that he had
not slept in his own bed more than 5 times since January 7,
2015. He affirmed that it was what he had signed up for.
Chair Neuman added that he had had only 4 or 5 personal
days off since January 10th.
9:21:28 AM
Representative Thompson informed the committee that he had
a legal opinion from Legislative Legal Services that he
could attend the Conference Committee meetings
telephonically and could vote on individual items
telephonically. He also reported that he had to be present
on the final vote and would have to sign off on the
committee report.
Chair Neuman thanked Representative Thompson for the
information.
9:22:30 AM
Representative Gara commented that there were disagreements
on the budget of which he wanted to work through as quickly
as possible. He wanted to clarify to the public that the
committee members liked each other and wished Vice-Chair
Kelly a happy birthday. He added that his heart went out to
legislators who had family issues and life struggles like
the 700 thousand Alaskans who shared the same experience.
9:23:22 AM
Senator Olson asked if the Senate Minority would have a say
in the $15 million in funds to be allocated.
Chair Neuman responded that he did not have an answer for
Senator Olson presently but possibly in the future. He
suggested speaking with Representative Gara.
Chair Neuman recessed the Conference Committee to the Call
of the Chair.
HB 2001 was HEARD and HELD in committee for further
consideration.
9:24:04 AM
RECESSED
[Note: The meeting did not reconvene and was rescheduled
for a later date.]
ADJOURNMENT
9:24:04 AM
The meeting was adjourned at 9:24 a.m.
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