Legislature(2003 - 2004)
01/13/2004 01:35 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 13, 2004
1:35 P.M.
TAPE HFC 04 - 1, Side A
TAPE HFC 04 - 1, Side B
TAPE HFC 04 - 2, Side A
CALL TO ORDER
Co-Chair Harris called the House Finance Committee meeting
to order at 1:35 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
None
ALSO PRESENT
Representative Jim Holm; Representative Mary Kapsner;
Representative Dan Ogg; Representative David Guttenberg;
Senator Gary Stevens; Cheryl Frasca, Director, Division of
Management & Budget, Office of the Governor; Joan Brown,
Chief Budget Analyst, Office of Management and Budget
GENERAL SUBJECT(S):
OVERVIEW:OFFICE OF MANAGEMENT & BUDGET
FY05 BUDGET
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 23rd Legislative Session, contact 465-
2156. After the 23rd Legislative Session they will be
available through the Legislative Library at 465-3808.
LOG SPEAKER DISCUSSION
TAPE HFC 04 - 1 SIDE A
000 Co-Chair Harris Called the House Finance Committee
meeting to order at 1:35 P.M. Co-Chair
Harris introduced members present.
115 Co-Chair Williams Noted the presence of Representative Jim
Holm, Representative Mary Kapsner,
Representative Dan Ogg, Representative
David Guttenberg, and Senator Gary
Stevens.
OVERVIEW: OFFICE OF MANAGEMENT & BUDGET
FY 05 BUDGET
300 CHERYL FRASCA, Commented on the budget provided by the
DIRECTOR, DIVISION Governor. Ms. Frasca introduced Joan
OF MANAGEMENT & Brown. She addressed the changes as
BUDGET, OFFICE OF recommended by the Governor.
THE GOVERNOR *Limit CBR draw to $400 million
*Spend less than FY 04 which must cover
$145 million in increased costs by
Absorbing $34 million in employer
costs
Covering $7 million in merit step
increases
Covering $62 million in formula
programs
Covering $42 million in increased debt
425 Co-Chair Harris Asked about the "rule of engagement" and
the Legislature asking questions.
440 Ms. Frasca Responded that she could address the
overall plan and let legislators ask
question either during or after the
presentation.
509 Ms. Frasca Provided information on the overall
proposed Budget Plan which will:
•Control spending
•Make government smaller, more effective
•Stabilize revenues over the short term
•Increase revenues over the long term
619 Ms. Frasca The Administration's approach includes:
•Policy drives spending decisions
Ensure public value by Strategically
align resources with mission and
performance targets set, results measured
638 Ms. Frasca
•Target administrative savings first;
cuts to direct services last
706 Co-Chair Harris Asked if there had been a lot of
administrative savings found.
721 Ms. Frasca Referenced the FY05 General Fund Spending
chart on Page 3 of the handout.
734 Ms. Frasca She added that in terms of general
overall general funding spending, the
current budget is less than the FY04
operating budget was. The departments
were requested to target administrative
savings first instead of direct services.
844 Ms. Frasca Continued her reference to Page 3 of the
handout speaking to the placeholders.
When the revenue versus the spending is
compared, the revenue is short. The
State is still $75 million dollars short.
If the proposed revenue measures are
approved, the State will be able to raise
an additional $78 million dollars.
911 Representative Croft Asked how the new revenues compared.
928 Ms. Frasca Stated that the new revenues would
require legislation and there would be
fees for implementing the regulations &
authority for additional revenues to
bring in the $53 million dollars,
different from the $78 million dollars.
957 Representative Croft Asked about last year's legislation. He
thought that the bonding could create the
$140 million dollars.
1008 Ms. Frasca Replied that the bond proceeds would be
considered general funds. The proposed
is a summary of the general funds only.
The $40 million dollars would result from
AHFC purchasing the State asset in which
the State would receive about $40 million
dollars and would be corporate receipts.
Then it would move to the "other fund"
column.
1101 Representative Croft Asked about the Student loan bonding and
if it would affect it.
1120 Ms. Frasca Responded that they are not general funds
and would be listed in the other chart.
1123 Vice Chair Meyer Asked about the revenue based on the oil
price.
Ms. Frasca Responded that it was based on $24.55
barrel price for FY05.
1143 Vice Chair Meyer Asked about the production and what
happens when the price of oil goes down.
1202 Ms. Frasca Acknowledged that when the price goes
down $1 dollar, the State looses $65
million dollars. The State could reduce
the short fall by reducing spending or
drawing more from the Capital Budget
Reserve (CBR).
1214 Representative Questioned the $40 million dollars short
Hawker spending line would correspond with Line
2 under new revenues.
Ms. Frasca Replied that was correct. In FY04, the
amount is $27.70. Department of Revenue
predicts $24.65 dollars per barrel for
FY05.
1325 Co-Chair Williams Asked how those numbers had been
determined.
1338 Ms. Frasca Stated that the Department of Revenue
determines those proposals not Office of
Management and Budget (OMB). They are
based upon analysis from the previous
fiscal year.
1405 Co-Chair Williams Understood that in the FY04 budget, it
was projected $27 per barrel.
1423 Ms. Frasca Clarified that was the updated number
from last December.
1431 Co-Chair Williams Thought that was what the FY04 budget had
been built upon.
Ms. Frasca Reiterated that $24.28 is today's project
amount.
1460 Co-Chair Williams Inquired the rational for determination
of these numbers.
1512 Ms. Frasca Responded that the Department goes
through a long process to determine the
prices and evaluating the world price of
oil.
1531 Co-Chair Williams Requested to find out the "rational" used
to determine these prices.
1546 Co-Chair Harris Added that the Department would be
testifying regarding the price
determinations.
1609 Vice Chair Meyer Commented that the Iraq situation will
influence the supply prices. He agreed
that the Department should provide the
Committee the updated information.
1638 Co-Chair Harris Thought that the numbers suggested are
reasonable and that if the price averages
higher, it will be better for the State
of Alaska.
1715 Ms. Frasca Compared FY04 to FY05, referencing Page 3
of the handout. She noted that the State
would be down 402 positions.
1810 Co-Chair Harris Asked if those positions had been filled.
1819 Ms. Frasca Commented that 60% were vacant positions.
1833 Ms. Frasca Some of those positions could move into
an already existing position and would
not warrant a "pink" slip.
1902 Ms. Frasca Commented on administrative savings.
*Consolidate Human Resources in
Administration
*Enterprise-wide IT standards,
coordination
*Consolidate administrative functions
within departments
2056 Representative Joule Asked about the supplemental proposal and
if it was for FY04 or FY05.
2115 Ms. Frasca Responded that it is for FY05. She added
that the number for FY04 for $15 million
dollar placeholder.
2145 Representative Questioned the $31 million dollar
Hawker difference in other state funds on the
th
fiscal summary released on December 15,
2003.
2240 Ms. Frasca Stated that the OMB analysts work with
those from Legislative Finance Division;
they found category differences. She
offered to provide that information to
th
Committee members. There is a January 9
updated fiscal summary.
2324 Representative Stressed that there had been a change in
Hawker total spending between the two.
2337 JOAN BROWN, CHIEF Stated that it related to the Permanent
BUDGET ANALYST, Fund adjustment. She offered to
OFFICE OF MANAGEMENT investigate that information.
AND BUDGET
2410 Ms. Frasca Continued listing the administrative
savings:
*Reduce layers of mid-management
*Eliminate funded, but vacant positions
2540 Representative Inquired where the funds in last year's
Hawker budget had been placed.
2558 Ms. Frasca Some of the funding was only partially
funded. Otherwise, the departments could
use those funds for step or PERS
increases. They are not allowed to use
that money for something outside that
appropriation or BRU.
2651 Representative Asked if most of those positions were now
Hawker out of the budget.
2700 Ms. Frasca Stated that this is the type of "house
keeping" used by the Governor.
2719 Ms. Frasca Listed the last administrative proposed
savings:
*Maximize charges to grants to cover
administrative costs
2739 Ms. Frasca Referenced the Missions and Measures.
*Strategic framework for each department:
-Mission
-Desired end results
-Strategies to achieve end result
-Performance targets
-Measure of success in achieving target
2835 Co-Chair Harris Inquired if OMB had all the missions and
projected measures for each department.
He noted that the legislature is
"missing" some of those.
2853 Ms. Frasca Replied that they were all complete. She
offered to follow-up on that information.
2915 Ms. Frasca Acknowledged the value of the process for
state services.
2935 Ms. Frasca Spoke to the Missions & Measures:
*Ensures public value
*Strategically aligns resources with
mission
*Sets targets and measure results
*Reports accountability to Legislature,
citizens
*Gives managers information by which
program performance can improve
3017 Ms. Frasca Noted that some departments have
requested more broad appropriation
authority. As resources get tighter, it
is important to question the "results"
achieved for the dollars appropriated.
"Checks & Balances" for flexibility.
3133 Ms. Frasca New in this year's budget is the
"prioritizing", which is a work in
progress.
3212 Co-Chair Harris Asked what the prioritizing would be
based upon. He asked if it would be the
value of the service to the public.
3223 Ms. Frasca Each department determined that
individually. Next time, there will be a
more integrative process framework
addressing that concern.
3257 Ms. Frasca Referenced the chart provided in the
handout on Page 5 - Spending Per Capita
in FY05 by category.
3400 Co-Chair Harris Pointed out that the largest single
expenditure for the public in the State
is the Permanent Fund dividends and
inflation proofing.
3428 Ms. Frasca Replied it was.
3437 Representative Croft Referenced the chart regarding the
University spending. Discussion between
Representative Croft and Ms. Frasca
followed regarding that concern. He
stressed that the information was
misleading.
3548 Representative Stressed that these are general funds
Hawker "plus" the other funds category in the
budget. He thought that was important
for the University to realize. All
revenue generated by the University is
included in the "other" category. He
thought that was a "distortion". He asked
the general fund per capita number.
3743 Ms. Frasca Responded that is all "public spending"
and that it is part of the appropriation
bill. She referenced 1975 comparison.
3851 Representative Asked if the Governor was still
Hawker interested in pursuing HB 325 to transfer
some of those categories back to general
funds.
3941 Ms. Frasca There will be legislation. She noted
that there are other areas where the
proposed budget is making "interest"
investments: Department of Public Safety
*20 troopers, 5 court service officers
Located primarily in rural Alaska
4007 Representative Croft Commented on that budget and the 20 new
troopers. He questioned that number.
4028 Ms. Frasca Stressed that there would be 20 more/new
troopers funded in the budget.
4041 Co-Chair Williams Commented on the 5 court service officers
- replacing the State troopers in the
rural communities with the court service
officers.
4119 Ms. Frasca There are five troopers currently serving
as court service officers. That will
"free-up" some money.
4138 Co-Chair Williams Asked if they would need same level of
training as a state trooper.
Ms. Frasca Did not know. She stated that the
Department would follow up on that
information.
4229 Ms. Frasca Described on the role of the state
troopers. There will be federal funds to
help with the Village Public Safety
Officers (VPSO).
4305 Representative Joule Commented that State troopers in rural
Alaska will cost more than they will in
urban Alaska. He stated that there could
be 3 VPSO officers per 1 State trooper
based on salary. He asked if the
troopers would be going to the places
that where the VPSO's were last year.
4431 Representative Croft Asked if the proposed budget had restored
the VPSO positions that had been cut last
year.
4435 Ms. Frasca Recalled that two of the areas continue
to fund the VPSO's and that one did not.
She offered to follow-up on the status of
the VPSO's reduced in the current fiscal
year budget.
4449 REPRESENTATIVE DAN Interjected that Kodiak lost six VPSO's
OGG last year. The local community picked up
grants from other sources to continue
funding those positions. The community
wants those officers, which was clear to
the Department. If the VPSO positions
are not being funded, he asked the
reasoning behind that decision.
4539 Ms. Frasca Responded that Commissioner Tandeske,
Department of Public Safety, would be the
best person to speak to the Committee
regarding these concerns.
4603 REPRESENTATIVE MARY Commented on the Public Safety
KAPSNER Subcommittee discussions and the losses
to the troopers and VPSO's. She hoped
that with an increase in troopers, a
significant portion would go back to the
village safety concerns.
She asked about village public health and
the possible loss to public health
nurses.
TAPE HFC 04 - 1, Side B
4641 Ms. Frasca Stated that the Department of Health &
Social Services has been aggressive
working with other rural agencies for
other ways to finance public health.
Commissioner Gilbert of the Department
should come to the Committee to address
the Department's intent with the rural
organizations and the level of services.
4528 Representative Joule Asked what would happen when Senator
Stevens was no longer Chairman of the
Appropriations Committee.
4438 Ms. Frasca The Commissioner is working on
"earmarked" projects. He is working on
existing finance structures & federal
programs that allow the State to leverage
money.
4409 Representative Joule Asked if it would be rolled into the
federal base.
4351 Ms. Frasca Correct.
Ms. Frasca Noted the addition of six criminal
prosecutors in the Department of Law.
There will be 14 social workers and 7
associate social workers.
4247 Ms. Frasca Continued, commenting on the Investment
in Education funding level:
*K-12
-Fund as provided by law
K-12 foundation program
School debt
Pupil transportation
*University
5% ($10.6 million) for Regent
Priorities
4133 Vice Chair Meyer Commented on the "No Child Left Behind"
issue. He asked if any additional funds
had been suggested to help the local
school districts.
4058 Ms. Frasca There is not additional money to the
formula in the proposed budget. The
amount of the decrease was $7.8 million
dollars to the foundation formula.
4030 Representative Croft Asked if there had been an increase
required of the local contribution.
3949 Ms. Frasca Stated that there was not. Anchorage
pays 3.5 mils.
3919 Representative Croft Commented on adequate funding and the
impact on the local school districts.
The Anchorage School District has had to
make substantial cuts, with layoffs. The
Administration indicating that they are
adequately funding education is a
fundamental problem.
3834 Ms. Frasca Clarified that she did not use the words
"fully" or "adequately" funding for
education. Education could never be
fully funded. It is funded at the level
prescribed by State law. The retirement
system has added to the burden of the
school districts. The Department has had
to make priorities. She encouraged
discussion with Commissioner Sampson from
Department of Education & Early
Development regarding "no child left
behind".
3719 Representative Croft Emphasized what would be a higher
priority than education.
3648 Ms. Frasca Replied not much. The Governor's
commitment was to provide the University
with a 5% increase to the degree that he
could. That was not guaranteed. There
was a 5% equivalent in the Capital budget
and will be made available to the
regions. The Administration has gone
through a "top down review" of the
departments that will be on going. The
Administration has not had that same
opportunity with the University system.
3538 Representative Croft Commented on usual capital requests.
3522 Ms. Frasca Currently, there is an expectation that
the University will come to the
legislative process to allocate funds.
3510 Representative Croft Clarified that was a Governor's
commitment and not a guaranteed
commitment.
3454 Ms. Frasca Reiterated that this will be a difficult
determination and that it cannot be
guaranteed
3434 Co-Chair Harris Asked the last time was when the per
student amount was researched to
determine statewide accurate. He
remembered the cost differential study
done a couple years ago
Ms. Frasca Did not know. She offered to check with
the Department.
3334 Co-Chair Harris Commented that it is important to know
that number with facts and knowledge of
the real numbers.
3310 Representative Joule Referenced the other post secondary
institutions other than University of
Alaska. He asked if there would be an
increase for those places.
3234 Ms. Frasca Did not believe that they are scheduled
for an increase.
3217 Representative Joule Emphasized that there are a host of other
postsecondary institutions that play an
equally important roll in getting
Alaskans trained and putting them to
work. It is an issue of parity.
3151 Ms. Frasca Responded that was correct. There have
been increased dollars in capital budget
for maintenance of the facilities. There
have also been federal funds for those
programs.
3056 Representative Joule Commented that time spent on the
paperwork for federal funds takes
additional manpower. He encouraged that
if the funds are being allocated for the
University, the Administration should
consider making funds available to the
other institutions.
3009 Co-Chair Williams Commented on the pupil transportation
concerns.
2950 Ms. Frasca Commented that last legislative session,
there was grant approval for additional
$500.0 thousand for concerns. Little
concern has been voiced regarding pupil
transportation. She offered to check
with Eddy Jeans regarding how the school
districts were doing.
2850 Co-Chair Williams Asked about the exit exam and the costs
associated with management of that.
Ms. Frasca Understood that there was one contract to
manage that for $1.5 million dollars for
the entire state.
2835 Representative Commented that his school district is
Stoltze adapting to the fiscal constraints of the
budget in creative ways.
2759 Ms. Frasca Spoke to the Investment in Resource
Development:
Natural Resources
-Oil & Gas Division new positions
Alaska Peninsula oil and gas lease
Gas pipeline
NPR-A
-Coastal Management "Permit Portal"
2710 Co-Chair Harris Asked if it was fair to assume that the
Governor supported the Senate's $2
million dollar request for the pipeline
authority.
2646 Ms. Frasca Stated that the Administration had asked
the Authority to provide a work plan. It
has not yet been received.
2621 Representative Fate Referenced the NPR-A impact litigation.
He asked about the revenue that the State
"might" derive and lease sale costs.
2559 Ms. Frasca At this point, there is no revenue
projected. She offered to ask the
Department regarding that concern.
2538 Co-Chair Harris Commented on the severance tax credits on
the new wells. He asked if there was any
new money projected from that in the
proposed budget.
2517 Ms. Frasca Did not believe that there were any of
those funds in the budget because of
timing issues. The Department of Natural
Resources budget has two positions in it
associated with that.
2442 Ms. Frasca Addressed the Capital Budget:
*$1.4 billion in all funds
$124 million higher than FY 04
$1.3 million Federal funds
*$216 million FF for Juneau Access
*$million for Gravina Island
Crossing
2400 Co-Chair Harris Asked if federal funds are provided for
the Juneau access, what would the
timeline be.
2341 Ms. Frasca Explained that it would be a few years
out.
2327 Representative Croft Corrected the amount provided referenced
by Ms. Frasca. She corrected that it
would be $1.3 million higher. The State
portion would be $100 million general
fund dollars.
2254 Ms. Frasca Responded that it would be $40 milling
dollars.
2140 Representative Croft Asked the "pure" general funds. He asked
if the $40 million would come from
selling buildings to Alaska Housing
Finance Corporation (AHFC).
2129 Ms. Frasca Offered to provide that information.
2120 Representative Croft Asked where the $60 million dollars would
come from.
2117 Ms. Frasca Dividends, student loan program, which
will cover capital and principal on the
debt. In response to Representative
Croft' query, she noted that the
Administration is still sorting the
information out regarding the
percentages.
2102 Ms. Frasca Referenced a slide was not included in
the handout addressing the Capital
Investment proposed Capital budget by
category.
2029 Representative Croft Asked what the discretionary capital
budget was being spent on.
2013 Ms. Frasca Offered to provide that report. She
noted that there was a "priority setting
process" to identify what to spend it on.
1959 Co-Chair Williams Asked how the priorities of the capital
budget had been established.
1942 Ms. Frasca Transportation; limit of dollars for
deferred maintenance needs were also
addressed. She reinforced that there are
not a "lot of dollars to spread around".
1900 Co-Chair Williams Asked about the Juneau Access Road money-
$129 million dollars.
1852 Ms. Frasca The figures were based on what the
Department of Transportation & Public
Facilities learned from Congressman
Young's Committee. She offered to
provide the bases for that amount.
1818 Co-Chair Williams Commented that many amounts have been
proposed for these projects. He voiced
his concerns regarding the priorities as
determined by the Congressional
delegation.
1706 Ms. Frasca Stated that she would confer with the
Governor regarding the priority rankings.
1630 Co-Chair Williams Agreed the conversation needs to happen
in the Administration and within the
local scene. He spoke to the Juneau
Access controversy. He commented on the
political "fight" within in Juneau
regarding the concern. The people have
voted it on; Ketchikan has voted in
favor. He did not think that amount
requested would be sufficient.
1528 Ms. Frasca Acknowledged that those considerations
will be considered.
1500 Representative Fate Asked if the Capital would be affected by
the matching that the State may have to
provide.
1431 Ms. Frasca Stated it would not.
1419 Co-Chair Harris Asked what will happen if the bond issue
does not materialize.
1353 Ms. Frasca Responded what was the legislative back-
up plan.
1341 Ms. Frasca It has not been considered with those
thoughts. There would be a
reprioritization with making more
reductions in the process.
1325 Co-Chair Harris Asked if there was another revenue source
consideration.
1223 Ms. Frasca Stated that there are other
considerations that are being discussed
but the Administration is not yet ready
to provide that information.
Referenced the Capital Budget handout:
*Leverage state dollars with bond
proceeds:
Alaska Student Loan Corporation
AHFC
1048 Ms. Frasca *Way for ASLC to repay state for initial
investment
*Multi-year plan
$75 million in year one
$100 million in year two
$85 million in year three
*No impact to student loan programs
*Future loan repayments pay debt
No draw on state's general treasury
1007 Representative Croft Questioned the AHFC bond proposals for
another $25 & $40 million dollars.
946 Ms. Frasca General Obligation debt authority. She
addressed the current cost of debt.
*Road, highway, ferry, airport projects
$977 million in Federal funds
*Water, sewer, solid waste projects
$79 million for VSW projects
State's share financed by AHFC bonds
922 Ms. Frasca The future debt service will be paid from
AHFC up to 15-20 years. Currently, the
cost of debt is about $50 million
dollars.
849 Representative Croft The State will be paying $2 million per
year in debt service. He asked why that
was a "good idea".
825 Ms. Frasca Responded that it was a matter of
leveraging State dollars, knowing that
there will be savings. The State will
realize a savings of $30 million dollars.
Current revenue is not sufficient to
cover the State's cost needs.
733 Representative Croft Questioned if that was a good idea. He
asked why the Administration did not
choose to use a General Obligation (GO)
bond run through AHFC rather than a vote
of the people.
707 Ms. Frasca The Governor's office does not believe
that it could get a piece of legislation
passed for a bill that is that narrow in
scope.
552 Ms. Frasca Commented on options available such as
selling State land. This will depend on
the nature of the deals. Discussion
followed with Representative Croft
regarding possibilities of reducing
payments in the future.
425 Ms. Frasca Admitted that she did not know the
specifics and asked that the Committee
wait until there were proposals
submitted. Discussion followed on the
Atwood Building.
356 Ms. Frasca Added that regarding the inclusion of the
"other $40 million dollars". The
Governor is working on other ideas for
providing the amount needed. She
identified a "transient accommodation
tax" could generate $32 million dollars.
242 Ms. Frasca The Administration is continuing to work
on other ideas. She listed the proposed
$1 dollar per pack tobacco tax; cruise
ship gambling tax; pull-tabs revised
proposal; & shore side guided activity
tax.
126 Co-Chair Williams Referenced "cruise ship gambling tax" and
referenced his legislation introduced
five years ago addressing that issue. He
understood that the cruise ships cannot
gamble within State waters, 3 miles
offshore.
22 Ms. Frasca The ships cannot gamble within 3 miles of
the port.
TAPE HFC 04 - 2, Side A
019 Co-Chair Williams Asserted that there should be gambling in
the State to help with the current budget
shortfall. Ms. Frasca clarified that the
gambling referenced on the chart is
currently taking place and is not new
gambling.
110 Vice Chair Meyer Asked about the tobacco tax and whether
the State would continue at current
funding levels for nonprofits for tobacco
programs, at 20% of the tobacco
settlement.
148 Ms. Frasca Responded [the tobacco settlement] is
different than the tax and that
Department of Health & Social Services
has targeted about $500 thousand to
community health grants that can be used
for tobacco cessation education efforts
in the rural areas.
218 Vice Chair Meyer Expressed his desire to raise that amount
if the tobacco tax passes.
246 Representative Croft Questioned if the "transient
accommodation" statewide bed tax made to
a cruise ship would already be a bed tax.
Ms. Frasca responded it would and that it
is set at 5% of whatever is charged on
that route. Representative Croft asked
if the cruise portion would be a per day
amount.
332 Ms. Frasca Reiterated that it would be a $5 per day
per head tax.
414 Representative Croft Asked if a dollar addition to the
existing tax would make Alaska's tax on
tobacco the highest in the nation. Ms.
Frasca explained that New Jersey is the
highest at $2.05 dollars per pack; the
proposed tax would bring Alaska's tax to
$2.00 per pack. Representative Croft
asked Ms. Frasca about cruise ship
gambling and pull-tabs.
428 Ms. Frasca Explained that the pull-tab tax would
increase from 3% to 6% the ideal net,
from 78% to 77%.
457 Representative Croft Continued questioning Ms. Frasca on
Unrestricted GF Revenues, specifically
asking about shore-side guided tour
activities. Ms. Frasca responded that it
would be a proposed 5% tax on, for
example, guided kayak or fly-in fishing
trips.
529 Co-Chair Williams Inquired about taxes affecting the cruise
ship industry, how they relate to the law
Congressman Young passed, and what kinds
of services the cruise lines will receive
in return.
606 Ms. Frasca Responded that the State treasury, local
citizens' property and sales taxes
contribute far more to the infrastructure
of the ports and harbors and parks and
roads, which benefit cruise ship
passengers than the revenue expected from
taxing that industry.
647 Co-Chair Williams Requested that Ms. Frasca to get back to
the Committee regarding a bill which
relates to the industry tax.
712 Representative Joule Asked the breakdown in the bed tax
between revenues generated from visitors
coming into the State versus Alaskan's
traveling around the State. Ms. Frasca
did not know if those figures exist but
that she would ask.
1051 Co-Chair Williams Expressed agreement over the innovative
proposed management of State money in the
capital budget.
1159 Co-Chair Harris asked why the budget does not reflect on-
going labor negotiations and increased
costs. He asked if a budget amendment
would be added later. Ms. Frasca stated
that increased costs were included and
that the departments are making other
reductions to cover those.
1256 Co-Chair Harris Thanked Ms. Frasca for the presentation.
1418 ADJOURNMENT The meeting was adjourned at 3:25 P.M.
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