Legislature(2015 - 2016)SENATE FINANCE 532
04/29/2015 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB1001 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB1001 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 1001
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, making
reappropriations, making capital appropriations, and
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."
1:45:51 PM
Co-Chair Kelly discussed the agenda.
PETE ECKLUND, STAFF, REPRESENTATIVE MARK NEUMAN, explained
that the House Finance committee had taken up the mirror
image CS to the one being considered in committee. He
explained that the CS contained the differences between the
governor's introduced budget bill, and the conference
committee bill that had been adopted previously. He
referred to the 2015 Legislature - Operating Budget Agency
Summary, which reflected the $54,954.5 that was above the
conference committee bill previously adopted. He also noted
the $39 million in non-additive fund transfers were
reflected on the page.
1:47:52 PM
Mr. Ecklund walked through the sections of the work draft.
He said that Section 1 contained various appropriations for
different items that the governor wanted to see funded. He
noted that the items were familiar. He pointed out the
appropriation on Page 3, which was to fund the FY 2016 cost
of living adjustment (COLA).
1:49:13 PM
Senator Bishop requested clarification on the page numbers.
1:49:56 PM
AT EASE
1:50:10 PM
RECONVENED
Mr. Ecklund directed attention to page 4 of the work draft,
which reflected the State-Wide All Employees COLA of
$56,386,100, this covered both the union and non-union CLOA
for FY 16.
1:50:42 PM
Co-Chair Kelly understood that in the governor's budget the
union employees would receive the COLA increase and the
non-union employees would not.
Mr. Ecklund replied in the affirmative.
1:51:06 PM
Mr. Ecklund referred to Pages 5 through 11 as fund "roll-
ups" or the different fund sources that funded Section 1.
He referred to Page 12, section 4, which listed all of the
appropriations related to Medicaid expansion.
1:52:12 PM
Co-Chair Kelly wondered whether the section eliminated a
public policy discussion on Medicaid expansion.
Mr. Ecklund clarified that if the legislature adopted the
section, Medicaid expansion would be authorized through the
budget.
Co-Chair Kelly noted that the budget before the committee
split state employees between union and non-union and then
took away any public policy debate concerning Medicaid
expansion.
1:53:09 PM
Mr. Ecklund referred Section 7. He said that the bill would
amend the appropriation of $157 million from the In-state
Natural Gas Pipeline fund to the Education fund. He relayed
that the appropriation would be $118 million transferred
from the In-State Natural Gas Pipeline fund to the Public
Education fund. He shared that $1,006,027,900 would be
appropriated from the general funds to the public education
fund. He stated that the net effect of Section 7 would be
to fund the FY16 statutory base student allocation (BSA) of
$58.80, at 100 percent.
1:54:30 PM
Mr. Ecklund addressed Section 8 of the work draft, which
would fund the union contracts for FY16.
1:54:50 PM
Senator Dunleavy asked whether there was any funding for
non-union positions in the bill.
Mr. Ecklund replied no. He added that the bill specifically
took away any funding for non-union COLA increases.
1:55:12 PM
Mr. Ecklund referred to Section 9, which contained the
constitutional budget reserve (CBR) language for FY15 and
FY16, and was the same language that had been in the
conference committee report, as well as the language in
Section 10.
1:56:04 PM
Co-Chair Kelly expressed disappointment with the
administration.
1:58:41 PM
AT EASE
1:58:59 PM
RECONVENED
Co-Chair Kelly stressed that the budget that the senate had
passed in the legislative session had been fully funded. He
expressed frustration with the administration. He thought
that it was unfair for non-union employees to be left out
of the COLA increases. He contended that the legislature
had planned to bring in experts to discuss Medicaid
expansion, but that not the governor was forcing the issue
through the budget.
1:59:33 PM
Senator Dunleavy whether the committee would hear from the
Governor's Office.
Co-Chair Kelly replied that he did not want to hear from
the Governor's Office at this time. He thought that the
policy objectives in SB 1001 were clear.
1:59:44 PM
Vice-Chair Micciche found it interesting that the governor
felt he could "wave a wand" and approve Medicaid expansion
without legislative approval. He felt that the governor was
using the three-quarter vote as a tool to force the
expansion. He expressed discomfort with major policy issues
being passed within a budget and without public discussion.
2:01:35 PM
Co-Chair Kelly stated that the legislature had been headed
toward a discussion of Medicaid expansion. He spoke of
former Commissioner Struer's renewed contract to guide the
committee through the issue. He said that the legislature
had asked if the discussion could happen in Anchorage where
there were computers and files available. He opined that
the construction that would soon begin would make
conducting legislative work on the issue difficult. He felt
that the governor was "stamping his feet" and that that was
not the way to get things done. He asserted that the
governor had a willing group of people in the legislature
that wanted to take up the issue, but now it was too late
because of the impending construction on the Capitol
Building.
2:03:18 PM
Senator Dunleavy queried the total increase in SB 1001,
versus what the legislature had passed.
Mr. Ecklund replied that the total fund increase was
$217,660.0, the unrestricted general fund (UGF) was
approximately $55 million. He said that in addition to that
there was $39 million in fund transfers of UGF that would
go to the public education fund. He offered a total of
approximately $94 million.
2:04:22 PM
Senator Dunleavy expressed frustration with the state's
fiscal situation.
2:06:00 PM
Co-Chair Kelly said that special sessions that were
concentrated on the budget usually came down to a debate
between people who wanted to spend, and people who did not.
2:08:07 PM
Co-Chair MacKinnon worried that the budget took one-time
money that might not be available in FY17.
2:08:41 PM
Senator Dunleavy stated that SB 1001 appeared to be a road
map to higher taxes.
2:09:44 PM
Co-Chair Kelly asked if Vice-Chair Micciche would walk the
committee through tax credits for oil companies and why the
minority's argument against paying them was bunk.
2:10:07 PM
AT EASE
2:10:13 PM
RECONVENED
Co-Chair MacKinnon wondered whether there needed to be a
discussion about the constitutional rights of the
legislature to pass the budget.
Co-Chair Kelly stated that the words "legislature" and "the
people" were synonymous.
2:10:42 PM
AT EASE
2:13:46 PM
RECONVENED
Co-Chair Kelly stated that people frequently used the
argument that reduction of oil company tax credits could
help the state's financial picture. He said that emails he
received from the public stating that the state received
less money under SB 21 was absurd. He stated that the fact
that the state received more money under SB 21 was not
debatable.
2:14:47 PM
Vice-Chair Micciche prefaced his discussion by saying that
oil taxes should be living documents and that people should
be open to adjustments. He said that there was no negative
impact from SB 21; the positive earnings from all oil and
gas production related revenue in FY15 and 16 was
approximately $1.6 billion in production taxes alone. He
said that people often attributed tax credit issues to SB
21, but the credits were not the result of SB 21. He
asserted that the credits were more of a result of Alaska's
Clear and Equitable Share (ACES) or the Cook Inlet Recovery
Act of 2010. He added that the minority had supported those
bills. He said that there was not causal relationship
between Alaska's deficit and oil tax credits. He said that
SB 21 earned $400 million more in FY15 than what would have
been earned under ACES, and $550 million more in FY16. He
continued to expound on the merits of oil and gas
production to the state and why SB 21 was beneficial over
ACES.
2:17:42 PM
Vice-Chair Micciche argued that the senate had made cuts to
the budget with an absence of politics. He said that he had
prioritized by what was most important to the state. He
said that the increased budget presented by the governor
offered no middle ground and reflected largely political
changes. He said that the SBR three-quarter vote had been
designed to be very prudent with the state's reserves, but
was now being used by the governor as leverage to spend $94
million.
2:19:45 PM
Senator Bishop asserted that the Commissioner of Revenue
had stated that SB 21 was working.
2:20:48 PM
Co-Chair MacKinnon asked for a brief at-ease for the
committee to consider a press release from the Governor.
2:20:55 PM
AT EASE
2:21:38 PM
RECONVENED
Co-Chair Kelly criticized the governor's press release and
congratulated the committee on the work done in the
previous 94 days. He characterized the current special
session as a debate between those who wanted to spend more
and those who wanted to spend less.
2:22:59 PM
Senator Dunleavy stated that he wanted to work with the
governor, but that the legislature did not work for the
governor.
2:23:43 PM
AT EASE
2:24:05 PM
RECONVENED
SB 1001 was HEARD and HELD in committee for further
consideration.
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