Legislature(1993 - 1994)
03/19/1993 01:30 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 32: SCHOOL CONSTRUCTION DEBT REIMBURSEMENT Number 417 REPRESENTATIVE PAT CARNEY, PRIME SPONSOR OF HB 32, read his sponsor statement for the record. (A copy of the sponsor statement may be found in the House Community and Regional Affairs Committee Room, Capitol 110, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) He added, "I have a little trouble understanding why there's a big fiscal note because they're already reimbursing municipalities for school construction for past bonded indebtedness that was covered by state law." Number 460 REPRESENTATIVE CARNEY continued, "This legislation (HB 32) is strictly a judgement call, I think, on the part of the committee. The only decision we have to make, I think, is whether or not organized municipalities that pay taxes should have an opportunity to get state reimbursement for school construction. Everyone knows that the current system isn't working. I think if we make a decision to spend some BP money or some other money for school construction statewide, even then we aren't assured that our urban areas will be adequately taken care of. ...The decision will have to be made at a later date in finance, about what we ultimately do about this problem." REPRESENTATIVE DAVIES said he strongly supported HB 32 and added, "Under the present system, even if the governor's proposal to spend $150 million a year in additional money were to go into effect under the current system of priorities, we don't believe that schools will be constructed (fast enough) to meet the need in Fairbanks." Number 499 CHAIRMAN OLBERG requested clarification of the school appropriation process and asked, "Aren't we already doing this?" REPRESENTATIVE CARNEY said, "The current funding has to do with commitments made in the past...this legislation (HB 32) will not affect this year's budget at all. It won't affect the budget until two years after the bonds are sold by the municipalities. ...Then the municipalities gets reimbursement from the state for 70 percent. Even at the best, it would be three to four years before we see any cost to the state in the way of bonded indebtedness reimbursement." CHAIRMAN OLBERG asked, "Does this fall in the category of binding a future legislature?" REPRESENTATIVE CARNEY replied, "We can always under-fund, Mr. Chairman, we're doing that right now." Number 515 REPRESENTATIVE DAVIES commented, "The state has been paying off its indebtedness at a fairly rapid rate. The usual rule of thumb is...to have that down less than five percent of your rolling GF (general fund) dollars. This wouldn't have any effect on our annual budgets until a couple of years from now. At that time we will have paid down our bonded indebtedness...below that magic five percent number." Number 530 VICE CHAIR JERRY SANDERS said, "I think the situation they're describing would explain the fiscal note. I think, by the time we'd be paying this two or three years from now, the state intended to be out of this business and not have anybody paying that and they'd have to reinstitute it." REPRESENTATIVE TOOHEY asked about the list distributed to the committee members. (A copy of the list may be found in the House Community and Regional Affairs Committee Room, Capitol 110, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) REPRESENTATIVE CARNEY said, "This is a list of the proposed schools to be funded under the Governor's proposal for priority one schools and if you'll notice, it puts almost no money into the areas where the heaviest population is." Number 565 CHAIRMAN OLBERG asked, "Does the present reimbursement system exist in statute, the debt reimbursement that's being done now, or is that an annual capital appropriation that is subject to legislative whim?" REPRESENTATIVE CARNEY said, "It is covered in the statute but it is legislative whim, the amount to be funded in relationship to the total amount we're committed to." REPRESENTATIVE DAVIES pointed out, "Last year (1992) the total amount that we funded for statewide school construction was only about 27 million dollars. We anticipate in the Fairbanks area we will need to construct in this next decade 100 million dollars worth of schools." CHAIRMAN OLBERG said, "I need to do a little bit of homework on this (HB 32)." Then offered to bring up HB 32 again Tuesday, March 23, 1993. ADJOURNMENT CHAIRMAN OLBERG adjourned the meeting at 3:54 p.m.