03/14/2012 08:30 AM House FINANCE

HOUSE BILL NO. 284                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs,    capitalizing   funds,   amending                                                                    
     appropriations,   and   making  reappropriations;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
HOUSE BILL NO. 285                                                                                                            
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
8:51:51 AM                                                                                                                    
                                                                                                                                
Co-Chair Thomas  reported that the amended  operating budget                                                                    
was  $31,044,700  in  general  funds  below  the  governor's                                                                    
amended  request; in  all funds,  $77,683,700 was  below the                                                                    
governor's  amended request.  He thanked  the committee  for                                                                    
helping  to slow  the growth  of  government. The  agencies'                                                                    
general fund  portion of the  budget was 3.4  percent larger                                                                    
than  the   current  year.  In  total   the  government  was                                                                    
investing $6.272 billion in general  funds and $9.49 billion                                                                    
in all funds.                                                                                                                   
                                                                                                                                
Co-Chair   Stoltze  MOVED   to   ADOPT  proposed   committee                                                                    
substitute HB  284 (FIN), Work Draft  CS 27-GH2599\T (Bailey                                                                    
3/13/12) as a working document.  There being NO OBJECTION is                                                                    
so ordered.                                                                                                                     
                                                                                                                                
Co-Chair  Stoltze  MOVED  to report  CSHB  284(FIN)  out  of                                                                    
committee with individual recommendations.                                                                                      
                                                                                                                                
Representative   Gara   OBJECTED.  He   thanked   Vice-chair                                                                    
Fairclough and  the Governor  for discovering  federal money                                                                    
to help  fund much  needed housing  for victims  of domestic                                                                    
violence. He felt it to be a very positive move.                                                                                
                                                                                                                                
Representative Gara  WITHDREW his objection. There  being NO                                                                    
further  OBJECTION,  CSHB  284  (FIN) was  REPORTED  out  of                                                                    
committee with a "do pass" recommendation.                                                                                      
                                                                                                                                
Co-Chair   Stoltze  MOVED   to   ADOPT  proposed   committee                                                                    
substitute HB 285 (FIN) CS27-GH2593\I  (Bailey 3/13/12) as a                                                                    
working  document.  There  being  NO  OBJECTION  it  was  so                                                                    
ordered.                                                                                                                        
                                                                                                                                
Co-Chair  Stoltze  MOVED  to report  CSHB  285(FIN)  out  of                                                                    
committee with individual recommendations.                                                                                      
                                                                                                                                
Representative  Gara  OBJECTED.  He  noted a  change  to  be                                                                    
looked at before the bill hits the floor.                                                                                       
                                                                                                                                
Representative Gara  WITHDREW his objection. There  being NO                                                                    
further  OBJECTION,  CSHB  285  (FIN) was  REPORTED  out  of                                                                    
committee with a "do pass" recommendation.                                                                                      
                                                                                                                                
Representative Doogan expressed  his thoughts concerning the                                                                    
budget. He  signified that  he would  be voting  against the                                                                    
budget on the floor as he  thought it was too much money. He                                                                    
stressed that  it was not  a criticism of anyone  who worked                                                                    
on  the   budget,  but  believed   the  legislators   had  a                                                                    
responsibility  to  not do  what  has  always done  whenever                                                                    
money was available. He cautioned  that the present level of                                                                    
spending  was not  sustainable. He  admitted voting  for the                                                                    
budget the  last two  years for  political reasons,  but now                                                                    
regrets his action, and, if he  had it to do over, would not                                                                    
vote for the  budget. He remarked that he did  not know what                                                                    
to do about the high  costs and acknowledged that inflation,                                                                    
salary increases,  and higher  costs all  contribute inflate                                                                    
the  budget. The  budget passes  with good  explanations and                                                                    
reasons, but the result is  the budget has risen 7.8 percent                                                                    
per year and the operating  budget has nearly doubled in the                                                                    
last  ten years.  He admitted  being unable  to see  how the                                                                    
high increases can  be resolved. Along with  the increase in                                                                    
the  budget,  he  pointed  out  that there  needs  to  be  a                                                                    
corresponding level of oil money  to meet the growing needs.                                                                    
He was  concerned about the  time when more money  was being                                                                    
spent  than was  being  generated. He  applauded the  people                                                                    
working  on the  problem, especially  Vice-chair Fairclough.                                                                    
He  regretted  leaving the  legislature  with  the work  not                                                                    
complete. He  predicted that the spending  was unsustainable                                                                    
and  hard times  were  in  the future  if  spending was  not                                                                    
reigned  in. He  thanked the  committee for  giving him  the                                                                    
opportunity to explain why he was voting against the bill.                                                                      
                                                                                                                                
9:02:34 AM                                                                                                                    
                                                                                                                                
Representative Joule  agreed with many issues  brought up by                                                                    
Representative Doogan,  but indicated he would  vote for the                                                                    
budget.  He   found  it  amazing   that  due  to   the  time                                                                    
constraints of  the session, the legislature  must deal with                                                                    
the  operating budget  by the  increments  requested by  the                                                                    
governor. He  did not feel the  best was being done  for the                                                                    
people in the  state in a limited 90 day  session. He stated                                                                    
that more  time was needed and  cited the need to  return to                                                                    
the 120 day session. He pointed  out it was possible to deal                                                                    
with the budget in 90 days  if more work was involved during                                                                    
the interim. The Missions and  Measures process was in place                                                                    
to help  review how well  the agencies were using  the money                                                                    
being  spent. Policy  and  funding of  how  the process  was                                                                    
conducted  will benefit  the budget  process. He  reiterated                                                                    
the need to work harder  during the interim on budget items.                                                                    
He thanked  the budget subcommittees  and his staff  for all                                                                    
their work and assistance.                                                                                                      
                                                                                                                                
9:07:29 AM                                                                                                                    
                                                                                                                                
Representative Neuman  indicated he  had been  more involved                                                                    
in  the  budget  process  over recent  years  and  commended                                                                    
Missions and Measures program. He  believed the budget money                                                                    
would help  Alaska become more  efficient in the  future. He                                                                    
pointed out that  the cost of government  continued to climb                                                                    
while the pipeline  was delivering less and  less. There are                                                                    
things to  like and  dislike in the  budget, but  the budget                                                                    
process was a public process.  He stressed the importance of                                                                    
spending money  efficiently now to  try and help  the future                                                                    
when money may not be  as readily available. He declared his                                                                    
support for the bill.                                                                                                           
                                                                                                                                
9:10:19 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  acknowledged  the individuals  who  dealt                                                                    
with the hard parts of  the budget: the Department of Health                                                                    
and  Social  Services,  the university,  and  education.  He                                                                    
pointed out  that the  amount of spending  was going  up and                                                                    
items   were   more   expensive.    He   remarked   on   the                                                                    
responsibility  and  difficulty  in making  tough  unpopular                                                                    
decisions  and acknowledged  the internal  pressures in  the                                                                    
capitol  from   the  public.  New  bills   were  also  being                                                                    
presented that  would increase formula growth.  He furthered                                                                    
that  the  price  of  oil   will  not  always  be  high  and                                                                    
production  was slowing  down. He  impressed that  decisions                                                                    
are daunting especially with large  departments, such as the                                                                    
ones Vice-chair  Fairclough and Representative Joule  had to                                                                    
deal with. Spending will continue to add up.                                                                                    
                                                                                                                                
9:14:50 AM                                                                                                                    
                                                                                                                                
Representative Gara acknowledged  that Representative Doogan                                                                    
had been consistent on his  views concerning the budget. The                                                                    
political idea in Washington D.C.  has been for one party to                                                                    
tear apart  anything that  another party  presents. Although                                                                    
the impasse is  seen all the time in  politics, he indicated                                                                    
his plan to vote for the  budget as he believed it moved the                                                                    
state  forward. He  remarked that  there were  parts of  the                                                                    
budget he  liked and some parts  he did not like.  He told a                                                                    
story of funding for a  health care issue and expressed that                                                                    
there were items in the budget  that paid for things that no                                                                    
one with  a conscience would take  out. It was hard  to find                                                                    
major changes without  a slash and burn  approach. One thing                                                                    
the  legislature is  unable to  do is  ask agencies  if they                                                                    
were  operating  efficiently.  Only  the  governor  has  the                                                                    
ability to  perform that task,  but efficiency could  be one                                                                    
way to get control of the  budget. He pointed out that there                                                                    
were some  items in  the budget  that would  make situations                                                                    
better  and save  the  state  money in  the  future such  as                                                                    
education. He added that an  unpopular stand might be to ask                                                                    
wealthy  cities to  pay for  more of  their municipal  needs                                                                    
instead of asking for state  funding. He believed the budget                                                                    
to  be  a  status  quo  budget.  He  recognized  the  future                                                                    
struggle to find exactly where and when to cut the budget.                                                                      
                                                                                                                                
9:20:58 AM                                                                                                                    
                                                                                                                                
Vice-chair  Fairclough gave  credit  to  the Alaska  Housing                                                                    
Finance Corporation  for discovering  a way,  in cooperation                                                                    
with  the  governor's  office,  to  help  with  housing  for                                                                    
individuals affected by domestic violence.                                                                                      
                                                                                                                                
Representative  Guttenberg  mentioned  that  being  involved                                                                    
with  the budget  process was  like wrestling  with a  giant                                                                    
beast.  He  signified  that  each  member  has  a  role  and                                                                    
responsibility  with external  and  internal pressures,  but                                                                    
Alaska  was a  young  state where  funding  basic needs  was                                                                    
still part  of the  growth process.  He likened  the growing                                                                    
health  care to  a giant  beast; at  some point  health care                                                                    
will need  to be  addressed and dealt  with. He  thanked the                                                                    
co-chairs and subcommittee chairs for their work.                                                                               
                                                                                                                                
9:25:38 AM                                                                                                                    
                                                                                                                                
Co-Chair Thomas thanked the committee  and the chairs of the                                                                    
subcommittees for  their hard work.  He asserted  that there                                                                    
are many decisions to make,  but cuts were needed to prepare                                                                    
for the future  shortfall. He thanked David  Teal and Amanda                                                                    
Wright and their staff. He  also thanked his staff for their                                                                    
assistance. He  announced that the operating  budget in 1966                                                                    
was  $100,000,000 and  stressed the  inflation level  of the                                                                    
budget which  is now at  $9.6 billion. He thanked  again the                                                                    
administration and all who worked on the budget.