Legislature(2005 - 2006)HOUSE FINANCE 519
04/18/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB93 | |
| SB155 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 51 | TELECONFERENCED | |
| + | SB 93 | TELECONFERENCED | |
| + | SB 155 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 155(FIN)
"An Act making appropriations from the earnings reserve
account for construction of an integrated science
complex at the University of Alaska in Anchorage, for
replacement of the virology laboratory in Fairbanks,
for expansion of the Anchorage Museum of History and
Art, for the major maintenance grant fund, and for
other capital projects related to education; and
providing for an effective date."
SENATOR BEN STEVENS, sponsor, explained that SB 155 is a
one-time appropriation bill for major projects across the
state. The bill retires the entire deferred maintenance
list of the Department of Education and Childhood and Early
Development, $142 million for 70 projects across the state.
The bill funds new construction of schools and some
rehabilitation projects. The third part of the bill funds
university projects across the state. The fourth part of
the bill appropriates money for a museum in Anchorage. He
suggested that all projects are a lasting investment,
education-related, and affect future generations of
Alaskans. He encouraged support of the bill.
3:24:38 PM
Co-Chair Meyer spoke about the possibility of adding new
funding amendments. He asked how flexible the sponsor is.
Senator Stevens said the flexibility is contingent upon the
three criteria of the bill. He said he is opposed to a one-
time debt service relief such as the request from his school
district.
3:26:19 PM
Representative Hawker applauded the bill. He asked for
comments on the fund source and the impact on future
permanent fund dividends. Senator Stevens referred to the
last page of a handout by the Department of Education and
Early Development on the Effect of "One-Time" Earnings
Reserve Account Withdrawal in FY06 on the Dividend Check
(copy on file.) He stated that the money he has paid for
education as a property tax owner over 15 years has been ten
times greater than the impact on future dividends.
Representative Hawker summarized that the cost absorbed by
individual Alaskans over 15 years is $300. Senator Stevens
shared that that would be his kindergarten son's impact. He
emphasized that it is well worth the effort.
3:29:51 PM
Representative Croft referred to the 1999 permanent fund
vote and asked why the permanent fund would be used now that
oil is at $50 per barrel and there is a great reserve in the
government's saving account. Senator Stevens related that
the difference is that this is a one-time source. He opined
that "earnings reserve for government" means the annual
operation expenses and a continuing fund source. This bill
is an investment in state assets, a transfer of an asset,
not expenditure. He implied that the return of the
investment is non-tangible, due to the savings in school
improvements and the benefits to students.
3:32:53 PM
Representative Kelly asked what chance the bill has.
Senator Stevens replied "one step at a time". He said he
hoped there is enough evidence for the House Finance
Committee to consider this bill.
3:34:34 PM
Representative Hawker requested more discussion about the
capital projects major maintenance list.
Co-Chair Meyer inquired if this bill is part of the capital
budget. Senator Stevens replied it is not, it is a stand-
alone appropriation.
3:36:18 PM
Senator Stevens referred to the Department of Education and
Early Development list and reported that there are 71
projects throughout Alaska (copy on file.) He related that
it would be many years before so many maintenance needs
would surface again. Current appropriation bills only
address the top 20 projects.
3:38:34 PM
Vice-Chair Stoltze stated appreciation for the efforts of
Senator Stevens. He speculated that the bill would not wipe
out all maintenance needs and there would be new requests
next year. Senator Stevens noted that in order to be
eligible for this list, schools had to have a department-
approved maintenance program.
Co-Chair Meyer asked if some of the new school projects
could be completed with the 70/30 match. He wondered if
this bill would set a precedent. Senator Stevens replied
that it was not a major consideration when the bill was
written. He related a story about his children, M & M's and
issues of fairness. He noted that the same concept applies
to this bill, which is an attempt to meet many needs.
3:43:44 PM
Co-Chair Meyer noted that this is a bold bill.
Representative Foster commented that there is nothing in the
capital budget for his district. He agreed with the use of
the funding source. He repeated that his district receives
nothing.
3:45:26 PM
Senator Stevens said that the competition for resources is
fierce. This bill is an attempt to eliminate one of the
areas of competition, the deferred maintenance list. He
addressed whether Alaska is benefiting in the best way, the
way the fund is currently being managed. He related the
history of the fund and the how checks are paid out. He
suggested that the fund is an underutilized asset, and it
should be transferred to facilities that generate a
different type of return instead of a monetary return.
3:48:39 PM
Co-Chair Meyer pointed out that school maintenance is a good
use for these funds. He questioned if Amerada Hess funds
should be used for these projects. Senator Stevens replied
that the Senate has not mingled the two sources. Co-Chair
Meyer suggested that is another funding source. He implied
that the Amerada Hess is also "dead money".
3:50:55 PM
Representative Weyhrauch noted that the debate on this bill
is a tune up for future debates about the use of the
permanent fund. He stated that he analyzes this bill on an
independent basis. He opined that the most valuable return
on the investment is the contribution that kids will make in
the future.
3:52:49 PM
ED MARTIN, SR., KENAI, opined that raiding the permanent
fund is against the Alaskan's will, which was expressed by a
statewide vote in 1999. He suggested that there is very
strong support against the bill. He testified against SB
155.
3:55:43 PM
PETRIA FALKENBERG, KENAI, spoke in opposition to HB 155.
She referenced the vote in 1999 against tapping the
permanent fund. She shared details of a recent survey where
the majority voiced opinion against the bill.
3:58:41 PM
RED SMITH, COOPER LANDING, voiced concern about using the
permanent fund for projects in this bill. He maintained
that the people own the fund. He testified in opposition to
HB 155.
4:01:03 PM
FRED STURNAM, SOLDOTNA, testified in opposition to HB 155.
4:03:17 PM
JAMES PRICE, NIKISKI, spoke in opposition to HB 155 because
the people voted not to use the permanent fund for this
purpose.
4:06:36 PM
IAN FELTON, KENAI, testified in opposition to HB 155.
4:06:59 PM
ROCKY FRANK, ANCHOR POINT, speaking as a senior citizen,
spoke in opposition to HB 155. He suggested giving a one-
time permanent fund payout.
4:09:08 PM
Co-Chair Meyer closed public testimony.
Co-Chair Meyer related that a new CS for SB 155,
incorporating new amendments, would be drafted.
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