Legislature(2001 - 2002)
02/26/2002 03:37 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 freeze." 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 positions. 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 testify. C 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. C 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 Airports. 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 circumstance. C 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 naught. 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.