Legislature(2023 - 2024)ADAMS 519
03/30/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB39 || HB41 | |
| HB65 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 65 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 39 | TELECONFERENCED | |
| += | HB 41 | TELECONFERENCED | |
HOUSE BILL NO. 39
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental 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."
HOUSE BILL NO. 41
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:39:11 PM
Co-Chair Johnson MOVED to ADOPT Amendment L 7, 33-
GH1347\I.1 (Marx, 3/29/23) (copy on file):
Page 98, following line 29:
Insert a new subsection to read:
"(b) If, after the appropriation made in sec. 47 of
this Act, the unrestricted state revenue available for
appropriation in fiscal year 2024 is insufficient to
cover the general fund appropriations that take effect
in fiscal year 2024 that are made in this Act, as
passed by the Thirty-Third Alaska State Legislature in
the First Regular Session and enacted into law, and
the general fund appropriations that take effect in
fiscal year 2024 that are made in a version of CSHB
41(FIN), as passed by the Thirty-Third Alaska State
Legislature in the First Regular Session and enacted
into law, the amount necessary to balance revenue and
general fund appropriations that take effect in fiscal
year 2024 that are made in this Act, as passed by the
Thirty-Third Alaska State Legislature in the First
Regular Session and enacted into law, and the general
fund appropriations that take effect in fiscal year
2024 that are made in a version of CSHB 41(FIN), as
passed by the Thirty-Third Alaska State Legislature in
the First Regular Session and enacted into law, is
appropriated to the general fund from the budget
reserve fund (art. IX, sec. 17, Constitution of the
State of Alaska)."
Reletter the following subsection accordingly.
Page 98, line 30:
Delete "The appropriation made in (a) of this section
is"
Insert "The appropriations made in (a) and (b) of this
section are"
Co-Chair Edgmon OBJECTED for discussion.
Co-Chair Johnson explained that she brought the amendment
forward to ensure the committee passed a structurally
balanced budget. She read from prepared remarks:
The budget originally proposed by the administration
contained an over $400 million deficit to start with.
Until the spring forecast last week, committee
substitute (CS) 1 proposed by this committee was a
balanced budget that contained a surplus. As a result
of the new forecast, however, the new CS before you
now contains a deficit of $401 million. I am proposing
language Amendment 7, which is a draw from the
Constitutional Budget Reserve (CBR) as a starting
point from which to fill the deficit for this year's
operating and mental health budgets. There's a lot of
discussion yet to be had on the floor in this body and
in the other body and in conference committee about
how to fill that deficit this year and I look forward
to the debate ahead. However, the legislature can not
kick the can down the road any longer. A CBR draw is
only a band aid and one that we need to stop
reapplying. Our constituents deserve certainty and the
PFD, the essential services they rely on, a strong
capital budget, as well as the preservation of our
savings. The only sustainable way to achieve that is a
complete fiscal plan. That means continued downward
pressure on government spending, new revenue sources,
and major structural reform. This committee has done
its best with the budget that we were given, and I
thank each and every one of you for that and all of
the work that has been done. With the budget that
we've been given, we've done our best given the poor
market conditions and the many competing needs of our
residents; however, Alaskan's deserve a fiscal plan to
end the cycle of uncertainty in our budgeting and in
our economy.
Co-Chair Johnson asked members to support the amendment.
She noted her staff was available to answer any technical
questions.
1:41:55 PM
Representative Hannan looked at the amendment and wanted to
ensure she understood the language and its implications.
She noted that the amendment was for HB 39 and also
referenced HB 41. She noted it did not reference any other
bills including the capital budget. She asked how it would
be incorporated or covered by a future CBR vote if a CBR
draw was required.
Co-Chair Johnson could not speak to the capital budget
because it was not her area of expertise. She asked her
staff to address the question.
REMOND HENDERSON, STAFF, REPRESENTATIVE DELENA JOHNSON,
confirmed that the CBR language only covered the operating
budget and the supplementals contained within. The language
also mentioned the mental health budget because it was
covered by those two budgets. The amendment did not include
the capital budget. He explained that any amendments or
draw required for the capital budget was in the hands of
the other body "at this point."
1:43:50 PM
Representative Hannan asked how a CBR vote and draw worked
if there were bills outside of the budget with substantive
fiscal notes that were not incorporated into the operating
budget at the time of its passage.
Co-Chair Johnson deferred the question to Mr. Henderson.
Mr. Henderson replied that the language would cover fiscal
notes that attached funds to the operating budget.
Co-Chair Johnson clarified that the budget did not
reference additional fiscal notes that had not yet been
passed and did not include money to cover specific fiscal
notes.
Representative Galvin asked for verification that the
amendment language would be a normal piece to add to a bill
when the legislature knew the budget was overdrawn.
Mr. Henderson agreed.
1:45:34 PM
AT EASE
1:48:19 PM
RECONVENED
Representative Josephson understood the language was fairly
boiler plate. He shared that he had been in the majority in
the past and recalled needing to borrow from other sources,
which is what the amendment suggested may need to be done.
However, he pointed out that the bill before the committee
was the majority's budget as amended by the House Finance
Committee. He highlighted that there had been a call by the
majority for a fiscal policy and he looked forward to
hearing a comprehensive fiscal policy. He remarked that it
was almost April and fundamentally there were ways to
balance the budget one was an amendment by Representative
Hannan and committee members all knew the different
valves that could be turned. He stated that "we're waiting
to see if they will be turned and we're willing to be
cooperative with that." He viewed the amendment as a
failsafe or backstop and understood its purpose, but it was
not advancing towards fiscal sustainability. He thought it
was largely the requirement of both majorities to
facilitate.
Representative Ortiz remarked that the committee had the
ability for the amendment process to take action, which
would not have necessitated sending over an unbalanced
budget to the other body, but it had not taken the
opportunity. He appreciated Co-Chair Johnson's opening
comments about the need to adopt a fiscal plan and how the
legislature could not continue to rely on draws from
savings. He also appreciated the comments made by
Representative Cronk about the same need the previous day
on the House floor. He underscored that there would never
be a good time to make the tough decisions. He highlighted
that the committee could have made the tough decisions with
the amendment offered by Representative Hannan, but it had
not. He would support the amendment and would not object to
reporting the bill out. He stressed that the situation
would not get any easier. He reminded everyone that the
tough votes needed to be made.
1:51:32 PM
AT EASE
1:53:14 PM
RECONVENED
Co-Chair Edgmon WITHDREW the OBJECTION Amendment L 7.
Co-Chair Johnson explained that the committee had gotten
slightly ahead of itself and needed to adopt the new CS
prior to adopting the proposed amendment.
Co-Chair Johnson MOVED to ADOPT the proposed committee
substitute for HB 39, Work Draft 33-GH1347\I (Marx,
3/29/23).
Representative Galvin OBJECTED for discussion.
1:54:32 PM
AT EASE
1:55:06 PM
RECONVENED
Representative Galvin WITHDREW the OBJECTION.
There being NO further OBJECTION, the CS was ADOPTED.
Co-Chair Johnson MOVED to ADOPT Amendment L 7 (copy on
file). [Note: see 1:39 p.m. for amendment details.]
Co-Chair Edgmon OBJECTED for discussion.
Co-Chair Johnson clarified that the new CS had been adopted
and there was a motion to adopt Amendment L 7, which had
been discussed earlier in the meeting.
Representative Tomaszewski addressed previous comments
stnd
regarding a fiscal plan. He stated that the 31 or 32
legislatures could have adopted a fiscal plan. He
highlighted that there were 19 new freshmen in the House in
the current year and current legislators were dealing with
a budget and process they had been given by previous
legislators. He relayed that they were working very hard on
developing fiscal plans and it was his hope and goal for
legislators to do it together. He had been working with
different caucuses to facilitate a plan. He pointed out
that taxing the Permanent Fund Dividend (PFD) and the
people was not a fiscal plan. He elaborated that it was
unsustainable and was a regressive tax on Alaskans. He
agreed that it would be part of a fiscal plan, but there
were many other components. He hoped legislators could
collaborate to make a fiscal plan happen. He remarked that
the amendment was not perfect; however, the committee
needed to send over means to pay the state's bills. He did
not come to the legislature to spend the bank accounts down
to zero, but it was the budget the committee had been given
and they would have to deal with that.
1:58:52 PM
Co-Chair Johnson noted there would be an opportunity to
speak to the budget as a whole.
Representative Cronk stated it was his first year on the
committee. He emphasized that cutting the PFD was not a
fiscal plan. He thought if the legislature kept doing so
there would be no money left. He encouraged everyone to
work together on a multifaceted fiscal plan that would not
merely cut the PFD and create a tax. He elaborated that a
plan would include things people liked and things people
did not like. He stated the people of Alaska deserved to
know that the legislature would address the important
issues impacting the daily lives of rural and urban
Alaskans. He stated once that was achieved the legislature
could begin working on the efficiencies government needed.
2:00:28 PM
Representative Josephson requested to have his previous
comments on Amendment L 7 reflected in the record as linked
to the CS.
The OBJECTION was WITHDRAWN.
There being NO further OBJECTION, Amendment L 7 was
ADOPTED.
2:02:23 PM
AT EASE
2:04:25 PM
RECONVENED
Co-Chair Edgmon explained that he would make a motion to
report the bill from committee and would then object in
order for members to make any closing remarks on the bill.
Co-Chair Edgmon MOVED to REPORT CSHB 39(FIN) out of
committee with individual recommendations and that
authorization be given to the Legislative Finance Division
and Legislative Legal Services to make any necessary and
technical and/or conforming changes.
Co-Chair Edgmon OBJECTED for discussion.
Representative Josephson appreciated it was a heavy lift to
ask a body with 17 new members to present a fiscal plan. He
was proud to pass a comprehensive "four pillar" fiscal plan
in 2017 and 2018, which included an income tax, reform to
the PFD formula, a percent of market value (POMV) draw, and
significant cuts. He stated that the other body had
rejected it summarily without giving it serious attention.
He shared the information for context and explained that he
had been there and was still present advancing bold
measures and wanted to be cooperative with people who want
to do that in a balanced way.
Representative Josephson noted that the bill did not
include a full formula PFD and he respected the committee
and its leadership for doing so. He agreed that the bill
should not include a full formula dividend because the
state could not afford one. He stated that the bill already
went some way to recognize it had to be done, short of
raising revenue.
Representative Josephson thought the budget amendment
process was incredibly fair and he thanked the chair for
that; however, there were a number of investments the
committee could have made that would have advanced a stable
future for the state in terms of employment, diversity, and
fiscal balance. He listed various areas such as daycare,
childcare and helping youth grow strong to be productive.
He viewed the budget as a respectable bill, but he believed
more could have been done. He noted he was likely to make
an amend recommendation [on the committee report].
2:08:08 PM
Representative Galvin thanked the chair and committee for
their work on the amendment process. She stated it helped
her to get a good picture of many other parts of the state
and what other representatives were hearing from their
constituents. She felt there had been a rush to get the
amendments in and she felt it was difficult to account for
public testimony in time for the deadline. She shared that
the amendments had been received at 11:30 p.m. the night
before discussing them in committee. She hoped the process
could be worked through more comprehensively as the budget
went to the floor. She stated that discussions on the items
had been somewhat inconsistent in terms of being able to
ask and answer questions. She believed the committee may
have attained more consensus if there had been more
opportunity to review the proposed amendments before voting
on them.
Representative Galvin found the rolling of the supplemental
budget into the operating budget via an amendment without
advance notice combined with the lack of opportunity for
discussion to be something she had not seen before and a
little frustrating. She remarked that the overarching need
to improve recruitment and retention and enhance the social
safety net (i.e., education, childcare, mental health, low
cost housing, and healthcare services for all Alaskans) had
become clear in discussion. She believed an irresponsibly
large PFD made it difficult to meet the needs of Alaskans
and make their lives bearable at present.
Representative Galvin endorsed the co-chair's reaction to
spending an embarrassing amount of time on something she
believed was a small neighborhood issue related to a sign
appropriation. She would have appreciated a discussion
around a state problem of a lack of defense of public
easements across private land. She found there had been too
much time spent on the issue as opposed to other issues.
She thanked the committee and leadership for "pulling us
through" the overall process.
2:11:58 PM
Co-Chair Edgmon thanked the administration for providing a
budget that was by in large fair. He stated that through
time immemorial there would always be members who felt the
budget lacked increments or cuts. He remarked that in the
end a balance was struck. He noted that the budget had to
go through the other body and come back to the House for
concurrence. He remarked on the process of incorporating
the supplemental budget into the operating budget. He
elaborated that some items had been taken out and fast
tracked in a different measure. He thanked members of the
education community in the audience at present. He
continued that in terms of balance, the committee still had
the Base Student Allocation (BSA) for consideration.
Co-Chair Edgmon thanked staff doing a great job on their
work. He appreciated the work done by Co-Chair Johnson as
well. He was hopeful the committee could pass the budget
out and get it to the House floor and the Senate.
Representative Hannan thanked Co-Chair Johnson for the
efforts to keep the committee moving forward on the budget.
She stated it was her first year on the House Finance
Committee. She highlighted that the budget was lower than
the FY 15 budget and that the downward pressure on the
budget had been taking place for almost a decade. She had a
town hall meeting the previous evening and she had a couple
of constituents who were deaf who had asked if there was
talk of restoring services to deaf individuals that had
been cut in 2016. She stated the topic had not even been on
her radar because the programs had been cut in the first
swath of downward pressure and the legislature had not even
looked back to think about restoring services like sign
language interpreter referrals across the state. She
remarked that they had been forgetting how many services
that had been lost along the way that Alaskans needed. She
spoke to the need for a full fiscal plan and discussion on
revenue. She shared that she had been an advocate for
additional revenues and had sponsored an income tax bill
that never received a hearing. She had also sponsored a
small revenue bill on vape tobacco products that had made
it through the legislature and had been vetoed [by the
governor]. She supported a comprehensive fiscal plan to
meet the needs for all Alaskans including services for
deaf, blind, and physically disabled individuals. She
stated that until those needs were included, the budget was
not whole. She recognized the committee had a budget to
send to the floor for the next fiscal year, which was a
hurdle in itself. She thanked the committee leadership for
moving the budget forward and she looked forward to
continuing dialogues about the true fiscal needs of Alaska.
2:16:10 PM
Co-Chair Johnson relayed that she would save her remarks on
the budget for the end of the meeting.
Co-Chair Edgmon WITHDREW the OBJECTION to the motion to
report the bill from committee. There being NO further
OBJECTION, it was so ordered.
CSHB 39(FIN) was REPORTED out of committee with six "do
pass" recommendations and four "amend" recommendations.
2:17:13 PM
AT EASE
2:20:29 PM
RECONVENED
Co-Chair Johnson MOVED to ADOPT the proposed committee
substitute for HB 41, Work Draft 33-GH1349\I (Marx,
3/29/23).
Co-Chair Edgmon OBJECTED for discussion.
Co-Chair Edgmon WITHDREW the OBJECTION.
There being NO further OBJECTION, it was so ordered.
Co-Chair Johnson MOVED to REPORT CSHB 41(FIN) out of
committee with individual recommendations and that
authorization be given to the Legislative Finance Division
and Legislative Legal Services to make any necessary and
technical and/or conforming changes.
Co-Chair Edgmon OBJECTED for discussion.
Co-Chair Johnson thanked members, staff, the Legislative
Finance Division, Legislative Legal Services, the Office of
Management and Budget, and the administration for their
work on the budget process. She remarked that the minority
and majority had worked together towards a common goal of
doing the right thing for Alaska.
2:24:19 PM
Co-Chair Edgmon WITHDREW the OBJECTION.
There being NO further OBJECTION, it was so ordered.
CSHB 41(FIN) was REPORTED out of committee with six "do
pass" recommendations and four "amend" recommendations.
2:24:59 PM
AT EASE
2:28:17 PM
RECONVENED