Legislature(1995 - 1996)
02/09/1995 09:10 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HCR 1 - LONG RANGE FINANCIAL PLANNING COMMISSION
Discussion was had with Senator Pearce,
Representative Phillips, Pat Pourchot, and Pam
Neal. An amendment suggested by the
administration was moved by Senator Donley but
failed on a vote of 5 to 2. SCS CSHCR 1 (STA) was
REPORTED OUT of committee with a $51.3 fiscal note
from the Legislative Affairs Agency.
CS FOR HOUSE CONCURRENT RESOLUTION NO. 1(FIN)
Creating the Long Range Financial Planning Commission.
SENATE PRESIDENT DRUE PEARCE came before committee and
directed attention to SCS CSHCR 1 (STA). She referenced a
recommendation from Commonwealth North for a statewide
effort involving Alaskan citizens in long-range financial
planning. She further stressed need for a "soft landing" as
Prudhoe Bay revenues fall and the state faces "huge budget
deficits over the next ten years."
The resolution would create a balanced, statewide
commission. Pages 2 (lines 25-29) and 3 (through line 24)
present specific areas of commission review. The Senate
State Affairs' version calls for nine public members:
1. Three chosen by the Speaker of the House
2. Three chosen by the Senate President
3. Three chosen by the Governor
The House-passed version required unanimous consent by the
Governor, Speaker, and Senate President for all nine
members. Concern arose that that type of consensus would
involve a difficult and lengthy selection process and not
provide the needed wide range of diversification. Senate
State Affairs added a provision requiring that legislative
appointments by both the House and Senate consist of one
member of the majority and one member of the minority.
Senator Pearce acknowledged that work to be undertaken by
the commission should be done by the legislature. She then
added that a long-range plan could probably not be developed
without participation by the public. The resolution would
allow the legislature to work with the public on development
of new ideas for future budgeting. Senator Pearce spoke to
constituent concern that the state does not presently have a
budgetary plan. She referenced the Cremo Plan and the "safe
landing plan" proposed by ISER. There has been no
opportunity for review and discussion of these plans by the
public.
The resolution passed the House on a vote of 37 to 1.
Senator Pearce noted support by the Alaska Municipal League,
Alaska State Chamber of Commerce, Common Sense for Alaska,
the National Federation of Independent Businesses, Resource
Development Council, etc.
Senator Zharoff referenced fiscal note information
indicating that public members would be selected from
Fairbanks, Anchorage, and Southeast. Senator Pearce
explained that since there is no way to anticipate where
public members might come from, a regional diversity was
simply set forth by Legislative Affairs. She said she
expected rural members would participate and advised that
the fiscal note could be revised to show membership from the
four judicial districts, if that would provide a greater
level of comfort. Senator Zharoff stressed need for
participation by people from rural Alaska.
Discussion followed regarding identification of anticipated
fiscal gaps and recurring revenue and expenditures. Senator
Pearce spoke to projections by the administration,
Legislative Finance Division, the Oil and Gas Division with
the Dept. of Revenue, etc.
REPRESENTATIVE GAIL PHILLIPS, sponsor, came before
committee. In response to a question from Senator Zharoff,
she spoke to need for involvement of more public than
legislative members. A total of nine was selected to "keep
the committee from getting too big." Senator Zharoff asked
how the public members would be selected. Representative
Phillips referenced lists of people who have been involved
in state financial planning for some time as well as experts
and volunteers.
Senator Halford expressed his hope that membership would not
be weighted toward direct or significant indirect
beneficiaries of state spending. More general beneficiaries
should be well represented.
Senator Rieger voiced support for the resolution, saying
that it would create a mechanism for protecting state
reserves such as the earnings of the permanent fund, AHFC,
AIDEA, etc.
PAT POURCHOT, Legislative Director, Office of the Governor,
next came before committee. He voiced support for the idea
of a long-range fiscal planning commission, but noted
disagreement regarding composition of the members. All
members must have equal involvement in the process to ensure
both the function and credibility of the commission. The
Governor's position is that commission members should work
toward consensus and avoid vote count situations. The
proposed fifteen-member commission could lead to an eight to
seven configuration. Mr. Pourchot proposed that the
commission consist of a structure that does not include the
typical tie-breaking vote. He noted that when the vote is
eight to seven, the credibility of commission work is
greatly weakened. He pointed to an even number of members
on the PERS and TRS investment board and even representation
of management and employee interests. In that situation,
members are forced to work together to reach consensus. Mr.
Pourchot suggested addition of another public member,
appointed by the Governor, for a sixteen-member commission,
including ten public members: four appointed by the
Governor, three by the Senate, and three by the House. He
cautioned that lessening the Governor's role in selection of
commission members might force him into a "less proactive
role in the ultimate recommendations of the commission."
PAM NEAL, Alaska State Chamber of Commerce, next came before
committee. She told the committee that the chamber
represents approximately 700 businesses, employing 80,000
people. She voiced support for the resolution and said that
reduction in state spending and long-range financial
planning are the first priorities on the chamber's
legislative agenda. The chamber is less concerned by
composition of the commission than the requirement that it
include:
1. Statewide representation.
2. Representatives of beneficiaries of state
spending.
3. Representatives of providers of state revenue (the
business community).
Speaking to questions regarding need for the commission, Ms.
Neal stressed that it would "help get this process rolling .
. . get something on the table that everybody can look at."
Referencing commission costs, Ms. Neal noted that planning
is a necessary and beneficial process in the business
community. It thus justifies the expense. The $51.3 fiscal
note is a small price to pay for a solution to state
deficits.
Co-chairman Halford called for additional testimony on the
resolution. None was forthcoming. Senator Donley MOVED for
adoption of the amendment suggested by the administration:
Page 2, Line 6:
Change "nine members of the public" to "ten
members
of the public"
Page 2, Line 8:
Change "three" to "four" appointed by the
Governor.
Page 2, Lines 7 and 8:
Include language specifying appointment of three
public members, each, by both the Senate and
House.
End: SFC-95, #3, Side 1
Begin: SFC-95, #3, Side 2
Senator Rieger voiced support for the resolution without the
proposed amendment. Senator Zharoff spoke in support of the
change, stressing need for the sixteen-member commission to
reach consensus. Co-chairman Halford called for a show of
hands on the motion. The motion FAILED on a vote of 2 to 5.
Senator Rieger MOVED that SCS CSHCR 1 (STA) pass from
committee with individual recommendations. No objection
having been raised, SCS CSHCR 1 (STA) was REPORTED OUT of
committee with a $51.3 fiscal note from the Legislative
Affairs Agency. Co-chairman Frank and Senators Rieger and
Sharp signed the committee report with a "do pass"
recommendation. Co-chairman Halford and Senators Donley and
Zharoff signed "no recommendation." Senator Phillips signed
"do not pass."
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