Legislature(2003 - 2004)
03/04/2004 09:02 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 35
"An Act making appropriations for the operating and loan
program expenses of state government, for certain programs,
and to capitalize funds; making appropriations under art. IX,
sec. 17(c), Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken noted this legislation, sponsored by the Senate
Rules Committee at the request of the Governor, proposes the FY 04
operating budget and was first heard in the Senate Finance
Committee on April 14, 2003. He noted the distribution to members
of a proposed committee substitute, Version "U".
Senator Hoffman distributed a legal opinion issued by Tamara Cook,
Director of the Division of Legal and Research Services, dated
March 3, 2004, relating to the principles of the Public Meetings
Act, specifically to adequate notice of hearings on legislation.
Senator Hoffman commented to the importance to the public to know
which legislation would be heard in a committee. He understood that
a bill could be brought before a committee without advance notice
if that bill had been previously noticed for a hearing; however, he
remarked it is unreasonable to expect the public to adequately
track each bill that has had a previous hearing.
Senator Hoffman was unaware that this bill would be brought up
until late the previous night and cited the last paragraph of the
aforementioned memorandum as follows.
The Select Committee on Legislative Ethics is charged with
determining how the legislative ethics statutes, including AS
24.60.037, apply to certain fact situations. (AS 24.60.160) I,
frankly, have no idea whether any subject matter notice of a
meeting is required under AS 24.60.037 or, if it is, whether
the notice provided in the situation you describe is
inadequate for purposes of adhering to open meetings
principles. In any case, advice I might give is not binding on
the Select Committee. (AS 24.60.158)
Senator Hoffman stated that as a layperson, he was unsure that
consideration of this bill would meet the requirements of the Open
Meetings Act, so he therefore requested a determination by the
Select Committee on Legislative Ethics. He therefore requested that
no action be taken on this legislation until adequate notice has
been provided.
Co-Chair Green moved to adopt CS SB 35, 23-GS1002\U, as a working
document.
Co-Chair Wilken objected for an explanation.
Co-Chair Green explained this committee substitute provides an
increase to the education foundation funding formula.
AT EASE 9:28 AM / 9:28 AM
DEB DAVIDSON, Staff to Co-Chair Green, detailed that the committee
substitute appropriates funds for K-12 education and the University
of Alaska in the amount requested by Governor Murkowski in his
proposed FY 04 budget. She furthered that Section 3 of the
committee substitute contains standard language to transfer funds
from the Constitutional Budget Reserve (CBR) fund. Section 4, she
concluded, provides language stipulating that contingent upon
approval of access to the CBR with a three-quarter-majority vote of
both bodies of the legislation; an additional appropriation could
be made to K-12 education and the University of Alaska.
Senator Bunde asked the amount of funding for FY 04 requested by
the Governor.
Ms. Davidson replied that the allocations provided in Sections 1
and 2 for K-12 education and the University of Alaska are the
amounts requested by the governor based on the current foundation
funding formula.
Senator Bunde identified the $82 million referenced earlier and
asked if $5.8 million was the intended appropriation for the
University of Alaska.
Ms. Davidson affirmed.
Senator Bunde asked the reason for this amount.
Co-Chair Green responded this funding is intended to offset
increased University expenditures for the Public Employees
Retirement System (PERS) and the Teachers Retirement System (TRS).
Senator Bunde asked if the PERS/TRS cost to the University is $5.8
million.
Co-Chair Green answered the cost is higher, and that this
appropriation would provide a portion of the necessary funds.
Senator Bunde commented that this appropriation would not fund the
entire amount, despite the challenge to raise the remaining funds
necessary.
Co-Chair Green replied that certain employees of the University
might not be included in the PERS/TRS programs, and instead hold
federally funded or grant funded positions.
Senator Hoffman requested an explanation of Section 4 of the
proposed committee substitute.
Ms. Davidson explained that the provision of Section 4 is
contingent upon the approval of this bill by a three-quarter vote
of the legislature. She furthered that the amount of money
appropriated in this section occurs only upon legislative approval
to access funds from the CBR.
Senator Hoffman asked if only $82 million would be withdrawn from
the CBR.
Ms. Davidson could not say the exact amount that would be
appropriated from the CBR. She noted that the CBR draw would be the
difference in the total amount appropriated in the FY 05 budget and
the amount of revenues received. She stated that if the difference
is larger than $82 million, the full amount might be withdrawn from
the CBR, but if the budget gap were smaller, less would be required
from the CBR.
Senator Hoffman reiterated his comments in support of the committee
substitute to SB 1, but cautioned against spending from the State's
savings account before having a complete understanding of the total
financial position. He stated that spending from the general fund
is better policy. He noted that the legislature would be addressing
the operating budget over the next few months and recommended that
decisions on this matter be delayed for a few days for further
review.
Senator Olson remarked that the matter in which this committee
substitute is presented is uncommon. He pointed out that Section 5
provides that authority to withdraw funds for the increased
education appropriation from the CBR would be retroactive to July
1, 2003. He noted this would affect two budget cycles, although the
time period to consider this action is limited.
Co-Chair Wilken affirmed.
Senator Olson found this "highly unusual".
Co-Chair Wilken removed his objection and the committee substitute
was ADOPTED.
Co-Chair Green remarked that the public is "fully aware" of the
dynamics of funding budgets each year. She expressed intent to pass
a budget that "fully funds [education] very early". She disputed
Senator Hoffman's comments regarding spending from the State's
savings account first. She cited Ms. Davidson's testimony that
revenue in relation to expenses is considered first. She informed
that currently the amount of revenue generated is strong and if it
continues to increase, further discussion of an "ominous draw" from
the CBR would not be an issue. She noted that economists and
revenue forecasts predict continued revenue increases, which would
provide adequate funds to fully fund the education increase. She
spoke to the need to "hold down" special interest requests that
would impact the CBR. She stressed that if funds were withdrawn
from the CBR they should be for education expenses. She stated this
is the reason for the provisions in the committee substitute. She
expected that school districts would be appreciative of this
legislation after many years of requests. She suggested that if
some Committee members require additional time to consider this
proposal, they have not been listening to the needs of districts
for several years.
Senator B. Stevens supported modification of SB 1 and he supported
an appropriation bill that provides for the funding increase for K-
12 education. He remarked that this concept "puts forward" the
priority of the twenty-third legislature, which is Kindergarten
through University of Alaska education. He was willing to commit up
to 42 percent of the budget "up front" to education to allow
educators to "know their budget" and to eliminate the question of
whether adequate funding is available for the increased base
student allocation. He accessed that adequate funding would be
available in the State budget to fund this increase in FY 05 and
future years. He pointed out that multiple funding sources are
available to the legislature to appropriate. He reiterated that
increased funding for education is "priority number one" and once
addressed would allow consideration of other matters.
Senator Hoffman "wholeheartedly" agreed, funding education makes
good public policy; however, he stressed that general funds should
be used. He questioned a proposal to utilize CBR funds when
general funds were available. He suggested that if increased
education funding is the number one priority, then it should be
funded from the general fund with only a simply majority vote of
the legislature, rather than from the CBR, which requires a three-
quarter majority vote of the legislature to authorize. He announced
he would likely vote in favor of this bill, but against the motion
relating to the effective date. He indicated he would then
reconsider the proposal after the bill passed the House of
Representatives and was before the Senate again.
Senator Hoffman recalled the initial legislation that established
the CBR account, noting he served as chair of the House Finance
Committee when it was debated and was therefore informed on the
subject. He stressed the intent that the CBR be utilized as a
savings account only after all aspects of the budget are
considered, including public safety and health care appropriations.
Senator Olson also supported increased funding for education but
found the proposal to appropriate from CBR objectionable. He
acknowledged that the public might be aware of the budgetary
process, but pointed out that not permitting public testimony on
the matter prevents the legislature from being fully aware of the
situation.
Senator Bunde relayed discussions he has had with school board
representatives in which he learned that districts are required to
issue "pink slips" to staff and employees if adequate funding for
positions is in question. He stressed the benefit of providing
assurance of this funding as soon as possible.
Senator Bunde continued that the oil and revenue forecasts
predicting the future of the CBR have always been incorrect. He
doubted that an annual budget would not require funding from the
CBR, and therefore argued that the issue of granting access to
withdraw funds from the CBR is irrelevant.
Senator B. Stevens pointed out this legislation does not specify an
amount that would be withdrawn from the CBR, but rather provides
for a withdrawal of the amount necessary.
Co-Chair Green offered a motion to report CS SB 35, 23-GS1002\U
from Committee with individual recommendations.
Senator Hoffman objected and spoke to the Public Meetings Act. He
charged that adequate public notice was not provided and asked why
action could not be delayed until the following Monday.
Co-Chair Wilken noted the original version of SB 35 was the
proposed FY 04 operating budget, and that this committee substitute
is a simple appropriation that does not require several days to
understand. He stressed the importance to expedite the legislation
and assured that opportunity would be available to further consider
the legislation.
Senator Dyson commented that he prefers a significant amount of
time to consider matters, but was satisfied that the education
funding increase is near the amount the Governor has proposed for
education funding and therefore did not require additional time to
review the legislation. He added that he considers amendments
offered on the Senate floor to be questionable in their adherence
to the public notice provisions of the Public Meetings Act, given
that Senators are provided no time to consider the implications. He
surmised that the offering of this committee substitute is not a
unique practice.
SFC 04 # 30, Side B 09:50 AM
Co-Chair Wilken asked if Senator Dyson was speaking to the motion
to report the bill from Committee.
Senator Dyson replied that he was speaking to the objection to the
motion. He informed that he tried to attend and participate in a
Minority Caucus meeting that had been publicly noticed, but was
asked to leave.
Co-Chair Wilken directed the Members to cease commenting on the
Open Meetings Act.
Co-Chair Green told of "endless" correspondence relaying "pleas"
from many organizations representing education and children. She
remarked that this legislation represents the requests and would
allow districts to plan their budget year.
Senator Hoffman removed his objection citing his earlier comments.
Senator Olson pointed out that Section 3 of the bill does not
specify the amount that would be withdrawn from the CBR and
expressed his apprehension of "signing a blank check".
Co-Chair Wilken commented this Committee has "heard the school
bell; it's been rung." He continued," This legislation is the way
that we can answer the call.
There was no objection and CS SB 35 (FIN) MOVED from Committee.
AT EASE 9:53 AM / 9:55 AM
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