Legislature(2001 - 2002)

02/26/2002 03:37 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                 SJR 37-CONST AM: HIRING FREEZE                                                                             
SENATOR PETE  KELLY introduced the  resolution as a way  to reduce                                                              
state spending. He said, "It's very  difficult for us to force the                                                              
executive branch  to engage in what  is considered by  most people                                                              
to  be  a  fairly simple  and  common  sense  response  to  budget                                                              
problems.  This constitutional  amendment is  designed to  do just                                                              
that.  It gives  the  Legislature  the  authority to  require  the                                                              
executive  branch,  through  resolution,   to  initiate  a  hiring                                                              
The  Legislature would  pass  a resolution,  which  would enact  a                                                              
statute  and  the governor  would  then  be directed  toward  that                                                              
statute  to  begin  a  hiring  freeze.   The  framework  for  that                                                              
resolution would be worked out by  the next Legislature after this                                                              
constitutional amendment is passed.                                                                                             
CHAIRMAN  THERRIAULT  referred  to  the  exception  for  temporary                                                              
emergency positions  needed for  health and  safety and  asked who                                                              
makes that determination and what constitutes health and safety.                                                                
SENATOR  KELLY  replied  the  Constitutional  Amendment  does  not                                                              
directly  speak to those  issues.  We have a  resolution that  one                                                              
might consider  a sample  resolution that we  heard up  in finance                                                              
today  that talks  about  health  and safety.  The  Constitutional                                                              
Amendment doesn't  do that and, I  think the sponsor  statement is                                                              
probably in error  to bring up that specific thing  regarding this                                                              
constitutional amendment."                                                                                                      
SENATOR THERRIAULT said it would  then apply to all general funded                                                              
SENATOR  KELLY said  it could.  The Legislature  would make  those                                                              
determinations as needed.                                                                                                       
CHAIRMAN  THERRIAULT  asked  for verification  that  a  concurrent                                                              
resolution requires a simple majority in both house.                                                                            
SENATOR KELLY agreed.                                                                                                           
CHAIRMAN THERRIAULT  asked the administration's  representative to                                                              
ANNALEE MCONNELL,  Director of the Office of  Management & Budget,                                                              
said  it  is  her understanding  that  the  reasoning  behind  the                                                              
proposal  is  that  some  in  the  Legislature  feel  that  it  is                                                              
unconstitutional  to  require  a  hiring  freeze  because  of  the                                                              
separation of  powers. Therefore, it  would be necessary to  go to                                                              
the  voters  to  allow  the  Legislature   to  be  the  body  that                                                              
determines whether there will be a hiring freeze or not.                                                                        
One of  the issues this  raises is whether  this kind  of function                                                              
makes sense  in the Constitution  because it is not  very specific                                                              
on purpose about  how particular programs should  be administered.                                                              
The  Legislature   has  the  power  to  make   appropriations  but                                                              
recognizes that  the execution or management of  programs requires                                                              
some flexibility within an administration.                                                                                      
Although the  resolution is being  presented as a response  to the                                                              
fiscal gap, the  administration does not believe this  is the best                                                              
response to  that issue.  There is  already difficulty  in filling                                                              
positions   in  many  areas   of  state   government  because   of                                                              
competition  with the federal  government  and the private  sector                                                              
and  every   position  is  not   filled  today.  Looking   to  the                                                              
Legislature to decide what a hiring  freeze should look like would                                                              
place them in  the administration's current difficult  position of                                                              
having  to decide  which positions  are  critical for  maintaining                                                              
public safety functions.                                                                                                        
The  Legislature  does  have  the option  to  suggest  changes  to                                                              
statutes that are  on the books as a means of  cutting the budget.                                                              
This type  of budget  cutting would  generate healthy  discussions                                                              
about  taking  the   state  out  of  the  business   of  providing                                                              
particular  programs  and  services  and provide  the  public  the                                                              
opportunity  to   express  their   views  on  the   importance  of                                                              
particular  services.  Putting  something  of  this  sort  in  the                                                              
constitution  as a  way  of forcing  the  administration  to do  a                                                              
hiring freeze is an awkward maneuver.                                                                                           
The specifics of a hiring freeze  are a more appropriate topic for                                                              
the Finance Committee, but she wondered  whether this is necessary                                                              
to put into the Constitution because  there are other ways to make                                                              
budget cuts more  directly if that in fact is  the goal. Governors                                                              
have done hiring freezes on their  own initiative in both 1999 and                                                              
1986 when there  were precipitous drops in revenues  and without a                                                              
constitutional amendment.                                                                                                       
CHAIRMAN  THERRIAULT  agreed  that the  Legislature  controls  the                                                              
budget, but once  it is passed they have little  control. If there                                                              
is a  drastic reduction  in revenue part  way through  that fiscal                                                              
year, they  want the  administration to carry  some of  that money                                                              
forward to  the next  fiscal year,  they have  no power  to direct                                                              
that  action.  They  can eliminate  programs  and  make  statutory                                                              
changes as  well as  passing an  amendment to  the budget  but all                                                              
these are  subject to  a governor's  veto. It  is because  of this                                                              
lack of  direct control  over the  budget once  it is passed  that                                                              
makes this attractive.                                                                                                          
MS.  MCONNELL  thought  the  provisions  that currently  exist  do                                                              
allow the Legislature to cut the  budget mid year. It is true that                                                              
the veto could be overridden, but  that is a function of the basic                                                              
system  that says  if the  Legislature  passes a  measure and  the                                                              
governor vetoes  it, then that veto  may be overridden by  a three                                                              
quarters  vote of  the entire  Legislature.  This is  a much  more                                                              
direct  approach and  puts the  responsibility  for the  decisions                                                              
about which  areas should be funded  on the Legislature,  which is                                                              
the arm that has the appropriation  power. A hiring freeze doesn't                                                              
necessarily  affect the  fiscal gap.  Cutting  a federally  funded                                                              
project  does  not help  with  the  fiscal  gap and  neither  does                                                              
cutting  a position at  the Fairbanks  or Anchorage  International                                                              
The  Legislature  can change  specific  parts  of the  budget  and                                                              
evaluate  whether it is  a wise  action in  terms of the  services                                                              
that are needed  because the administration would be  able to tell                                                              
the Legislature  what the  impact would be  for any cut  proposal.                                                              
This is  a good reciprocal process  for determining whether  a cut                                                              
should be made and if so, where.  A hiring freeze is an across the                                                              
board cut that doesn't distinguish between life safety or not.                                                                  
In prior years when the administration  has proposed certain areas                                                              
for  budget cuts  they have  not been  acceptable. Closing  DOT/PF                                                              
maintenance  stations  or  letting  roads melt  open  rather  than                                                              
plowing   are  examples.   Such  changes   are  better   addressed                                                              
individually so the impact on services can be evaluated.                                                                        
CHAIRMAN  THERRIAULT replied  that the current  system allows  for                                                              
the Legislature to make changes but  it is a system where a simple                                                              
majority increases spending but there  must be a super majority to                                                              
make any kind of reduction.                                                                                                     
He  asked  whether  she  thought the  proposed  language  for  the                                                              
resolution  and  the  amendment has  enough  flexibility  for  the                                                              
Legislature  to   tailor  the  hiring  freeze  to   the  immediate                                                              
MS. MCONNELL  replied that if she were reading  the amendment as a                                                              
citizen she would assume that it  meant all vacancies. There could                                                              
be  statutes  that say  differently,  but  it  seems that  even  a                                                              
statute that addresses an across  the board hiring freeze is still                                                              
not getting at the specific issues  of whether it helps the fiscal                                                              
gap or whether  it goes to  the places that the  Legislature feels                                                              
that money should  not be spent. In the Department  of Labor there                                                              
are some general funded positions  in the research section that do                                                              
the work  that is necessary  to get the  federal funds.  There are                                                              
about  $550 million  in funds  in the  budget that  come from  the                                                              
federal government  and are dependent on population  and formulas.                                                              
If a position is frozen and accurate  data cannot be produced, the                                                              
state's  share of  federal formula  programs is  put in  jeopardy.                                                              
Another example  is worker compensation hearings.  The Legislature                                                              
agreed that  it was taking too  long to get a  worker compensation                                                              
hearing so another position was added  in last year's budget. That                                                              
person was  hired but another hearing  officer is now  leaving. If                                                              
that vacancy  is not filled, the  changes made last year  were for                                                              
If   the   Legislature   believes   there  are   ways   that   the                                                              
administration  should  be  holding   back  on  spending,  a  more                                                              
strategic way of  doing that is by taking specific  actions in the                                                              
budget.  Although it  would take  a super majority  to override  a                                                              
governor's  veto, the  Legislature  has that  same obligation  now                                                              
when the budget is formulated. It  should not be easier to cut the                                                              
budget than to establish it in the  first place. The same goes for                                                              
budget amendments;  there is not a different threshold  for budget                                                              
amendments or supplemental budgets than for the original budget.                                                                
CHAIRMAN THERRIAULT  noted that the  fiscal note was  the standard                                                              
note for anything that goes onto the ballot.                                                                                    
There  was  no  additional  testimony.   There  was  no  committee                                                              
substitute and no amendments.                                                                                                   
He asked for the will of the committee.                                                                                         
SENATOR PHILLIPS made a motion to  move SJR 37 and attached fiscal                                                              
note from committee with individual recommendations.                                                                            
There being no objection, SJR 37 moved from committee.                                                                          

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