Legislature(2007 - 2008)HOUSE FINANCE 519
03/19/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB418 | |
| HB396 | |
| HB419 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 396 | TELECONFERENCED | |
| *+ | HB 419 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 418 | TELECONFERENCED | |
2:56:18 PM HOUSE BILL NO. 396 An Act relating to and increasing the amount of the 2008 permanent fund dividend; and providing for an effective date. REPRESENTATIVE BILL THOMAS, SPONSOR, introduced his staff, Kaci Schroeder. He pointed out that high cost fuel is affecting everyone statewide. Alaska contributes a significant amount of resources to the Nation, yet residents pay some of the highest prices for fuel. If the hardships associated with fuel costs continue, it will force many families to leave the State for a lower cost of living. While the State devises a permanent plan to address the problem, people are continuing to pay the costs. HB 396 attempts to temporarily address the problem by increasing the amount of the 2008 Permanent Fund Dividend (PFD) check by $500 dollars. Representative Thomas summarized that the proceeds from Alaska's oil belongs to all of Alaska and should be shared equally. He urged support for HB 396. 3:01:23 PM Vice-Chair Stoltze asked if Representative Thomas would oppose the money coming from a progressivity formula. Representative Thomas commented that until the Legislature as a body can create a plan that treats everyone equally, HB 396 provides a one-time shot. With the high energy costs, it is important. Vice-Chair Stoltze reiterated his question if the sponsor was amenable to another source of funding for the bill. Representative Thomas wanted it to one come out of the PFD [a $310 million one-time cost]. Vice-Chair Stoltze worried about removing funds out of the formula. He agreed that getting money to Alaskans "is not a needs issue but a fair distribution concern". Representative Thomas thought the proposed legislation provides a fair way to distribute the wealth accumulated by the State. He agreed it could be classified as an energy rebate. Vice-Chair Stoltze thought it would be more appropriate as an energy dividend. He asked if issuance of a separate check had been considered. Representative Thomas thought that one distribution would be cheaper. Co-Chair Meyer was concerned about getting the money back to the people for fuel. He disagreed with using the PFD earnings and proposed instead, use of the surplus resulting from high fuel costs. He advised that the dollars will help the economy regardless on how they are spent. 3:06:55 PM Representative Gara agreed with finding a way to issue money to help people defray their high energy costs but would not support money coming out of Permanent Fund. He said he would support the rebate coming out of the General Fund. He noted it was a proposed one-year only item so a continual funding source was not necessary. Representative Gara expressed many people have a problem giving the funds to the wealthy. He disagreed with comments made by Co-Chair Meyer. It is the lower income people that actually put the money into the economy. He thought the funds could be given to people who make only a certain amount. Every adult could apply and indicate how much they earn, noting that it is a crime to lie on a State benefit form. 3:09:27 PM Representative Thomas agreed that using General Fund money would also be a good funding source. He mentioned the discrimination issue voiced by Representative Gara, maintaining he wanted a program that does not discriminate against an income bracket. Representative Gara stated he would not support the legislation if it gives money to rich people. Representative Thomas referenced a bill in the Senate Finance Committee (SFC) providing certain dollars as charitable donations. He noted, currently, everyone in the State receives a PFD and that there is no discrimination with that issuing. Co-Chair Chenault supported all Alaskans receiving the subsidy and thought that it could help spur statewide economy. He understood that Earnings Reserve was relatively low on funds; he did not know the effect paying the subsidy from the PFD. 3:13:26 PM Vice-Chair Stoltze appreciated the debate. He remembered that initially, the proposal was floating as an energy program. He did not want to see an increase to the PFD. Representative Crawford indicated his concern with the legislation. He commented that energy costs are going to be high next year as well. He encouraged the State be investing ways to get off fuel such as making renewal energy the goal. He suggested that a $300 million dollar investment into considerations for renewable energy costs would be a huge boost. He wanted to see a plan that could create dividends for years to come. Representative Thomas pointed out that HB 152 was sitting in Senate Finance Committee in support of renewable energy ideas. He agreed with the need to support alternative power sources. 3:20:03 PM Representative Joule supported finding alternative energy sources as recommended. He noted that he supports the legislation submitted by Representative Thomas to addresses short term concerns as he believes that the core premise is to help people with energy costs and was less concerned with who gets it. He agreed that the long term concerns must be discussed. The survivability of rural Alaska is directly related to high energy costs, which a huge concern and those decisions must be made soon. 3:23:39 PM Representative Gara mentioned fiscal discipline and the need to prioritize these concerns. He voiced support the first $150 million dollars going to the poorest, sincerely needing the funds. He stated that second half [$150 million dollars] could fund a strong university financial aid program to get people into college. He revisited his concerns for financing low income college students. Representative Gara advised he is a co-sponsor for the renewable resource funding bill, adding that it is important to prioritize and rank projects with relationship to how to transform society. Co-Chair Meyer supported HB 396, indicating that the same argument could be used for the PFD's. He maintained that everyone should be treated fairly and equally. 3:27:13 PM Co-Chair Chenault agreed with comments made by Co-Chair Meyer that all Alaskans should be given the entitlement and that he would not support creating two classes of people, an upper and lower income group. He did not want to see the State divided, yet wanted to address statewide needs in a fair and equitable manner. Co-Chair Meyer relayed that the Governor has the oil prices; he maintained that should be shared with all Alaskans. Representative Thomas advised that over 53% of Alaskans are in favor of the bill. He hoped that the money could help put food on the table. 3:29:43 PM TIM JOYCE, MAYOR, CORDOVA (Testified via teleconference), voiced support for HB 396. He stated that the cost of energy has drastically increased in the past few years and much more quickly than inflation. The economy can not adjust fast enough to compensate for the costs of energy and as a result, spending by individuals needs time to adjust. He listed resource costs in Cordova. There is a hydro plant in Cordova. The recommended allowance proposed by Representative Thomas could pay for approximately one month of heating in the Cordova area. He urged consideration for relief for citizens of Alaska, providing time to adjust to the new energy factors. He reminded members that last year, the price of oil increased to $110 dollars per barrel. 3:34:33 PM ELLIE FITZJARRALD, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, offered to answer questions of the Committee on the fiscal notes. 3:35:34 PM PUBLIC TESTIMONY CLOSED 3:35:43 PM Co-Chair Meyer wanted to hold the bill in Committee in order to determine an appropriate funding source. Representative Gara reiterated that he would not support the bill if the funds came out of the Permanent Fund. He maintained the need for funding a university financial aid program. Co-Chair Meyer believed that should be a later philosophical debate. He maintained that the distribution should be the same as the PFD. The list of eligible persons are known so the costs associated with administering the program would be substantially less. 3:37:42 PM Representative Crawford pointed out there is a statutory definition of the poverty rate. He maintained that if the government is making an investment in people's lives, it needs to be a long-term investment and should get away from high fuel costs. He urged consideration of alternative energy options. He asked to work with Representative Thomas on a long-term fix. Co-Chair Meyer pointed out that the Longevity Bonus had been available to everyone as well as the PFD program. There have been programs in place that are not income based. He maintained, it is the most fair way. Representative Thomas advised that included in the supplemental funding for the energy assistance was $350 million dollars and that $100 million of that was for grants for home improvements, based on income. Representative Gara reiterated that this is a poverty level issue, especially for the kids at poverty level. He maintained that the logic used was inconsistent and that discrimination against wealthy people is not discrimination. He emphasized that he does not share the Co-Chair's view of discrimination. 3:43:16 PM HB 396 was HELD in Committee for further consideration.
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