Legislature(2019 - 2020)

2019-02-20 House Journal

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2019-02-20                     House Journal                      Page 0147
HJR 7                                                                                                                         
HOUSE JOINT RESOLUTION NO. 7 by the House Rules Committee                                                                       
by request of the Governor:                                                                                                     
     Proposing amendments to the Constitution of the State of Alaska                                                            
     relating to an appropriation limit; relating to the budget reserve                                                         
     fund and establishing the savings reserve fund; and relating to the                                                        
     permanent fund.                                                                                                            
was read the first time and referred to the State Affairs, Judiciary, and                                                       
Finance Committees.                                                                                                             
The following fiscal note(s) apply:                                                                                             
1.  Zero, Office of the Governor                                                                                                
The Governor's transmittal letter dated January 29 follows:                                                                     
"Dear Chief Clerk:                                                                                                              
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill proposing a resolution to amend                                                          
the Constitution of the State of Alaska, Article IX, Sections 16 and 17.                                                        
The proposed amendment would establish a baseline for a                                                                         
constitutional appropriation limit so that appropriations for a fiscal                                                          
year would not exceed the average of the appropriations for the last                                                            
three fiscal years plus 50 percent of inflation and population or two                                                           

2019-02-20                     House Journal                      Page 0148
percent, whichever is less. The amendment includes exemptions from                                                              
the limit for certain purposes, such as money deposited into the                                                                
permanent fund, the permanent fund dividend program, money to pay                                                               
general obligation and revenue bond proceeds, money of trust funds,                                                             
and the appropriation of federal funds.                                                                                         
Additionally, the proposed amendment implements a constitutional                                                                
savings plan that would transfer the unexpended, unobligated and                                                                
unappropriated balance in the general fund at the end of a fiscal year                                                          
first, to the Alaska Permanent Fund and second, to a savings reserve                                                            
fund. The savings reserve fund may be allowed to grow until the                                                                 
balance is equal to the appropriation limit for the next fiscal year.                                                           
After that, all surplus revenue would be deposited in the Alaska                                                                
Permanent Fund.                                                                                                                 
We must develop a budget that is stable, predictable, and sustainable if                                                        
we are to place our state on a trajectory for economic growth and                                                               
future success. This amendment provides an important mechanism for                                                              
the people of Alaska to curb the growth of future government                                                                    
spending. This amendment respects the intent of voters who choose to                                                            
restrict the size of their government by lowering the constitutional                                                            
appropriation limit amount and tying future appropriations to those                                                             
made in the previous fiscal year. This amendment will ensure that                                                               
when government collects more revenue than it needs to fund essential                                                           
state services, the surplus revenue is saved for the future – not spent on                                                      
growing government as in the past.                                                                                              
This resolution is a powerful but simple way to structurally reduce and                                                         
cap government growth and implement a savings plan. I urge your                                                                 
prompt and favorable action on this measure.                                                                                    
Michael J. Dunleavy