Legislature(1995 - 1996)
02/08/1996 04:45 PM Senate STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SSTA - 2/13/96
SCR 23 LONG RANGE FINANCIAL PLANNING
TAPE 96-11, SIDE A
Number 001
CHAIRMAN SHARP called the Senate State Affairs Committee back to
order at 4:45 p.m. after recess from the Joint House and Senate
State Affairs Committee meeting and brought up SCR 23 as the only
order of business before the committee. The chairman noted that
during the joint meeting of the House and Senate State Affairs
Committees earlier in the day, the Chairman of the Long-Range
Financial Planning Commission stated SCR 23 was the one item he
wanted to see move forward.
CHAIRMAN SHARP stated there is a committee substitute in front of
the committee that primarily resolves that we will reduce the size
and scope of state government gradually - decrease the gap over a
five-year period. The second resolve basically states some of the
areas we feel should be looked at. The chairman thanked the Long-
Range Financial Planning Commission for their work and effort.
There is a slight change: the original figure of $429,000,000 was
adjusted to $433,000,000, taking into account up-to-date revenue
projections.
Number 040
SENATOR RANDY PHILLIPS asked if the figure of 80% on page 1, line
10 is accurate, or if that figure should be 85%.
CHAIRMAN SHARP thinks it is 80%.
Number 046
SENATOR LEMAN stated that figure is correct. What that figure
doesn't acknowledge is that a substantial part of the state's
budget is funded by user fees. So petroleum fees are actually in
the 50-60% range of the actual total budget.
SENATOR LEMAN made a motion to adopt the committee substitute for
SCR 23.
Number 074
SENATOR DUNCAN objected. His concern with the committee substitute
is that by adopting the original resolution, we are responding to
the broad general intent or goals of the Long-Range Financial
Planning Commission to close the fiscal gap to a certain level by
1997, and to continue to do so up until 2000. That indicates that
it's up to us to change the mix of expenditure reductions and
revenue increases, and other measures we deem necessary. This
resolution goes a lot further than that, and is asking us to adopt
some specific provisions before they've even been heard and debated
in this committee. For example, he thinks welfare reform will
occur; he is not sure what entitlement reform means; privatization
of state services has not been determined by the legislature to be
the way to go; Tier 3 state pension, wage, and benefit package- he
is not willing to vote for a resolution that specifies
that's...where I endorse that as one of the steps, or maybe
alternative steps; and on page 2, lines 16-18, he does not think
any of us oppose depositing 1.1 billion dollars into the permanent
fund from the earnings when it's done as part of a plan-but this
does not specify...this could lead to people believing that we're
endorsing doing that immediately. The minority caucus thinks that
all components of the full plan should reach the governor's desk at
the same time. He is concerned CSSCR 23(STA) indicates it's ok to
go ahead with the easy part of the plan before addressing the tough
part of the plan. Therefore, he thinks a very non-political
resolution has been politicized.
Number 120
CHAIRMAN SHARP responded that the language on page 2, lines 8-9
basically states that a financial plan be adopted by the
legislature. With Senator Duncan's other concern on page 2, lines
22-25, it "will make significant spending reductions through means
such as...." This language is just pointing out areas which should
be looked at. It doesn't say that it shall be done. The
statements are broad enough to allow legislative debate to occur.
As to getting all pieces of a plan to the governor's desk at the
same time, the chairman thinks that is a dream. They will have to
be completed a piece at a time. He thinks there will be a plan out
there shortly, along with SCR 23.
Number 150
SENATOR DONLEY stated concern that since the referral of SCR 23 to
the Judiciary and Finance Committees was waived, the State Affairs
Committee is the only committee where there will be a hearing on
the legislation at the committee level. He doesn't think the
public would have known that this resolution would now specify some
of the things that it does until just now. Therefore, this would
be the only opportunity for members of the public to comment on any
of these particular provisions now contained in the committee
subsitute. He thinks people would be interested in commenting, and
unless the committee delays action on SCR 23, those people will not
get an opportunity to comment on it at any stage of the legislative
process before it reaches the floor of the senate.
CHAIRMAN SHARP replied that the committee substitute incorporates
nothing more than was just recommended to us by the co-chair of the
Long-Range Financial Planning Commission. The debate will come on
the individual bills, on whether or not any of these will occur
through statute or through the budget. He thinks Senator Donley
will agree that there will be considerable debate on any particular
item contained in SCR 23 before it's locked into a bill that passes
the senate. He thinks there will be plenty of opportunity for
public input.
Number 186
SENATOR LEMAN noted that several of the items contained in SCR 23
are not new to this legislature. He would prefer that the list of
things the legislature looks at include more things than those
contained in SCR 23. He would include things such as the revision
of the education foundation formula. Overall, Senator Leman thinks
SCR 23 just states, "These are things that the legislature is going
to do." It's a plan. It may take 40 or 50 pieces of legislation
to implement all that. It will certainly be soundly debated.
Number 210
SENATOR DUNCAN commented he stands by his statement, and thinks
it's unfortunate that SCR 23 is being politicized beyond what it
needs to be. He thinks the commission also recommended a
retirement incentive program, which is not listed in SCR 23, for
political reasons undoubtedly. He thinks they also recommended
that revenue measures be considered. Nowhere is that specified in
SCR 23. Senator Duncan stated he is not trying to be overly
political, but this is a political statement. It is not a broad
framework.
Number 230
CHAIRMAN SHARP stated that no matter how the resolution is worded,
it will always be a political statement; that's the name of the
game around here. Some legislators have been accused by others
that we haven't acted quickly enough. This is just a very small
step, and it does reflect very accurately most of the things the
commission recommended as potential possibilities. He is sure
there will be many other things that are looked at, which aren't
listed specifically in SCR 23.
Number 255
SENATOR DONLEY stated he agrees with the chairman that everything
the legislature does is part of politics, so he doesn't think he
would criticize it because it's a political statement. But his
concern is that certain things have been chosen for inclusion, and
it would be appropriate to have a public debate over what should be
included in the resolution. Since this is the only committee that
will be taking action on SCR 23, he thinks it would be appropriate
to take public comment. If it is the chair's intent to move the
legislation today, Senator Donley has several amendments he would
like to suggest.
CHAIRMAN SHARP asked the pleasure of the committee.
SENATOR RANDY PHILLIPS stated, "Let's entertain the amendments."
SENATOR DONLEY agreed with some of the comments made earlier that
a key element is reform of the education foundation formula. He
feels uncomfortable moving ahead with the resolution and leaving
out such a huge part of the budget. He is frustrated that hasn't
been addressed the last three or four years, and thinks it should
be mentioned in SCR 23. Senator Donley also is disappointed that
the commission didn't have the time to deal with the issue of the
relationship between local government and state government. The
commission acknowledged that relationship is a very significant
element in closing the fiscal gap. As a member of the legislature,
Senator Donley would like that to be part of any package which is
developed. There are a lot of inequalities out there in terms of
how services are delivered versus who pays for those services.
CHAIRMAN SHARP agreed with Senator Donley. That was also discussed
in the Finance Committee this morning. He still feels strongly
that entitlement reform, benefits packages, and those kinds of
wordings allow broad areas that can be worked on, without naming a
whole litany of every item the state provides.
Number 295
SENATOR RANDY PHILLIPS noted that Senator Donley's concern over
addressing education foundation formula funding would be covered by
the term entitlement reform . If Senator Donley has amendments,
Senator Phillips stated he would be open to considering them.
SENATOR DONLEY commented that the only other opportunity for
amendments will be on the floor.
Number 305
SENATOR DUNCAN thinks all kinds of amendments could be offered to
SCR 23. He is concerned - there is a laundry list started, and
we're going to add to the laundry list. There will still be a lot
of things left off. It is for that reason he prefers the original
resolution. It was very broad in nature, endorsing the idea of
having a financial plan, endorsing the concept that we bring the
gap down to a certain level, endorsing the concept that we look at
spending reductions, and perhaps look at revenue measures. Once we
start a laundry list, that can go on forever. Senator Duncan
stated that when he referred earlier to a political statement, he
meant that SCR 23 is not a balanced political statement. It
reflects the viewpoints of the drafters. Senator Donley can make
his own laundry list, but he thinks it's foolish to put together a
laundry list. SCR 23 was supposed to be a broad endorsement of
adopting a financial plan.
CHAIRMAN SHARP stated he would like to see the laundry list remain
broad.
SENATOR DUNCAN commented he does not think that Tier 3 and
privatization are broad.
CHAIRMAN SHARP disagreed; privatization of state services is every
state service out there. He thinks that's about as broad as you
can get.
SENATOR DUNCAN responded there has been no decision that would even
be economically efficient, or should be the way we're going. And
Tier 3 is not broad. There is no revenue in this.
CHAIRMAN SHARP responded there is a statement in SCR 23 that
revenues-
SENATOR DUNCAN interrupted, "Not in the resolve clauses."
Number 338
SENATOR DONLEY stated he personally supports the implication that
the legislature look at reductions in government and spending. It
seems to be saying that, "First, reduce the size and scope of state
government to decrease the gap." He thinks that means we're going
to look at cuts before we add revenue generators. It doesn't say
exactly that, but the whereas clause on page two, lines 8-10 states
that any fiscal plan should contain a combination of spending
reductions and new revenue resulting from an expanded economy. His
concern with that specific language is it doesn't really conform
with the report from the commission. He disagrees with the report
in this specific area. But it was interesting that the chairman of
the commission made the comment to the State Affairs Committees
that you won't get new revenue for the state with an expanded
economy, with possibly the exception of natural resource areas
where we do have a tax, because in most areas there aren't state
taxes. Just expanding the economy won't give Alaska the additional
revenue that other states would have. So he is a little concerned
that particular phrase is actually out of line with what the
commission's report stated. Not that he agreed with the
commission's proposal for new taxes, but he also thinks that clause
misrepresents the commission's proposal.
Number 360
CHAIRMAN SHARP appreciates those comments, but he does not think
the commission chairman anticipated the legislature adopting the
commission's recommendations carte blanche, or even a majority of
what the commission recommended. He doesn't believe, as he heard
the presentation, that there was any direction on anything in their
plan which was sacred.
SENATOR LEMAN stated the committee substitute could be called
amendment #1. There is a motion before the committee to adopt the
committee substitute. He suggested acting on the motion to adopt
the committee substitute, and then beginning on further amendments
or suggestions.
CHAIRMAN SHARP asked if there were objections to adopting the
committee substitute.
SENATOR DUNCAN objected.
CHAIRMAN SHARP asked the secretary to call the roll.
Number 376
The committee substitute was adopted by a vote of 3 yeas, 2 nays.
Voting in favor of adoption were Senators Phillips, Leman, and
Sharp. Voting in opposition were Senators Donley and Duncan.
SENATOR LEMAN offered an amendment to SCR 23. In the last resolve
on page 2, line 32, delete "wishes to thank", and insert "thanks".
CHAIRMAN SHARP asked if there is objection to the amendment.
Hearing none, the amendment is adopted.
Number 388
SENATOR DONLEY thinks it would be important to add several other
items to the resolution. He doesn't think most people would
consider education funding as being an entitlement. Since it is
such a huge element of our budget, he thinks it would be
appropriate to address it directly.
CHAIRMAN SHARP agreed that individuals might think that, but
borough and city governments know it's an entitlement.
SENATOR DONLEY supposed amendments could be considered when SCR 23
reaches the floor.
Number 400
SENATOR RANDY PHILLIPS thinks concerns could also be addressed in
the Rules Committee.
Number 403
SENATOR RANDY PHILLIPS made a motion to discharge CSSCR 23(STA) and
the accompanying zero fiscal note with individual recommendations.
SENATOR DONLEY objected. He thinks some people would like to
testify on the resolution, and feels uncomfortable not giving them
the chance to do so.
CHAIRMAN SHARP asked the secretary to call the role.
The motion passed 3 yeas, 2 nays. Voting in favor of the motion to
discharge are Senators Leman, Phillips, and Sharp. Voting against
the motion are Senators Duncan and Donley.
CHAIRMAN SHARP stated that the motion passes and the resolution is
discharged from committee with individual recommendations.
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