Legislature(1999 - 2000)
03/21/2000 08:10 AM House STA
| 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 STATE AFFAIRS STANDING COMMITTEE
March 21, 2000
8:10 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Joe Green
Representative Bill Hudson
Representative Beth Kerttula
Representative Hal Smalley
MEMBERS ABSENT
Representative Jim Whitaker
Representative Scott Ogan
OTHER HOUSE MEMBERS PRESENT
Representative Carl Moses
COMMITTEE CALENDAR
HOUSE BILL NO. 330
"An Act establishing Prisoners of War and Missing in Action
Recognition Days and Women Veterans Day; and providing for an
effective date."
- MOVED HB 330 OUT OF COMMITTEE
SENATE BILL NO. 236
"An Act establishing Prisoners of War and Missing in Action
Recognition Days and Women Veterans Day; and providing for an
effective date."
- WAIVED SB 236 OUT OF COMMITTEE
HOUSE BILL NO. 331
"An Act relating to payment, allowances, and benefits of members
of the Alaska National Guard and Alaska Naval Militia in active
service; relating to computation of certain benefits for members
of the Alaska State Militia; and providing for an effective
date."
- MOVED CSHB 331(MLV) OUT OF COMMITTEE
HOUSE BILL NO. 137
"An Act relating to the municipal dividend program; and providing
for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 330
SHORT TITLE: POW/MIA DAY & WOMEN VETERANS DAY
Jrn-Date Jrn-Page Action
2/02/00 2065 (H) READ THE FIRST TIME - REFERRALS
2/02/00 2065 (H) MLV, STA
2/02/00 2065 (H) ZERO FISCAL NOTE (DMVA)
2/02/00 2065 (H) GOVERNOR'S TRANSMITTAL LETTER
2/24/00 (H) MLV AT 4:30 PM CAPITOL 120
2/24/00 (H) Moved Out of Committee
2/24/00 (H) MINUTE(MLV)
2/28/00 2330 (H) MLV RPT 5DP
2/28/00 2330 (H) DP: KOTT, PORTER, CROFT, CISSNA,
2/28/00 2330 (H) MURKOWSKI
2/28/00 2330 (H) ZERO FISCAL NOTE (DMVA) 2/2/00
3/16/00 (H) STA AT 8:00 AM CAPITOL 102
3/16/00 (H) Scheduled But Not Heard
3/21/00 (H) STA AT 8:00 AM CAPITOL 102
BILL: SB 236
SHORT TITLE: POW/MIA DAY & WOMEN VETERANS DAY
Jrn-Date Jrn-Page Action
2/02/00 2157 (S) READ THE FIRST TIME - REFERRALS
2/02/00 2157 (S) STA
2/02/00 2157 (S) ZERO FISCAL NOTE (DMVA)
2/02/00 2157 (S) GOVERNOR'S TRANSMITTAL LETTER
2/22/00 Text (S) STA AT 3:30 PM BELTZ 211
2/22/00 Text (S) Scheduled But Not Heard
3/02/00 Text (S) STA AT 3:30 PM BELTZ 211
3/02/00 Text (S) Moved Out of Committee
3/02/00 Text (S) MINUTE(STA)
3/03/00 Text (S) RLS AT 11:30 AM FAHRENKAMP 203
3/03/00 Text (S) MINUTE(RLS)
3/03/00 2508 (S) STA RPT 4DP
3/03/00 2508 (S) DP: WARD, ELTON, GREEN, PHILLIPS
3/03/00 2508 (S) PREVIOUS ZERO FISCAL NOTE (DMVA)
3/06/00 2530 (S) RULES TO CALENDAR 3/6/00
3/06/00 2531 (S) READ THE SECOND TIME
3/06/00 2531 (S) ADVANCED TO THIRD READING UNAN
CONSENT
3/06/00 2531 (S) READ THE THIRD TIME SB 236
3/06/00 2531 (S) PASSED Y17 N- E2 A1
3/06/00 2531 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
3/06/00 2531 (S) DONLEY NOTICE OF RECONSIDERATION
3/07/00 2549 (S) RECON TAKEN UP - IN THIRD READING
3/07/00 2550 (S) PASSED ON RECONSIDERATION Y20 N-
3/07/00 2550 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
3/07/00 2551 (S) TRANSMITTED TO (H)
3/08/00 2442 (H) READ THE FIRST TIME - REFERRALS
3/08/00 2442 (H) STA
BILL: HB 331
SHORT TITLE: ALASKA NATL GUARD/NAVAL & STATE MILITIA
Jrn-Date Jrn-Page Action
2/02/00 2067 (H) READ THE FIRST TIME - REFERRALS
2/02/00 2067 (H) MLV, STA, FIN
2/02/00 2067 (H) ZERO FISCAL NOTE (DMVA)
2/02/00 2067 (H) GOVERNOR'S TRANSMITTAL LETTER
2/24/00 (H) MLV AT 4:30 PM CAPITOL 120
2/24/00 (H) Heard & Held
2/24/00 (H) MINUTE(MLV)
2/29/00 (H) MLV AT 4:30 PM CAPITOL 120
2/29/00 (H) Moved CSHB 331(MLV) Out of Committee
2/29/00 (H) MINUTE(MLV)
3/03/00 2394 (H) MLV RPT CS(MLV) NT 5DP
3/03/00 2394 (H) DP: CROFT, PHILLIPS, JAMES, CISSNA,
3/03/00 2394 (H) MURKOWSKI
3/03/00 2394 (H) ZERO FISCAL NOTE (DMVA)
3/16/00 (H) STA AT 8:00 AM CAPITOL 102
3/16/00 (H) Scheduled But Not Heard
3/21/00 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 137
SHORT TITLE: MUNICIPAL DIVIDEND PROGRAM
Jrn-Date Jrn-Page Action
3/15/99 454 (H) READ THE FIRST TIME - REFERRAL(S)
3/15/99 454 (H) CRA, STA, FIN
2/03/00 (H) CRA AT 8:00 AM CAPITOL 124
2/03/00 (H) Moved CSHB 137(CRA) Out of Committee
2/03/00 (H) MINUTE(CRA)
2/04/00 2085 (H) CRA RPT CS(CRA) 1DP 4NR 1AM
2/04/00 2085 (H) DP: KOOKESH; NR: MURKOWSKI, HALCRO,
2/04/00 2085 (H) DYSON, JOULE; AM: HARRIS
2/04/00 2085 (H) 2 ZERO FISCAL NOTES (DCED, REV)
2/04/00 2085 (H) REFERRED TO STATE AFFAIRS
2/17/00 (H) STA AT 8:00 AM CAPITOL 102
2/17/00 (H) Heard & Held
2/17/00 (H) MINUTE(STA)
3/16/00 (H) STA AT 8:00 AM CAPITOL 102
3/16/00 (H) Scheduled But Not Heard
3/21/00 (H) STA AT 8:00 AM CAPITOL 102
3/21/00 (H) MINUTE(STA)
WITNESS REGISTER
CAROL CARROLL, Director
Administrative Services Division
Department of Military and Veterans Affairs
400 Willoughby Avenue Suite 500
Juneau, Alaska 99811
POSITION STATEMENT: Provided department's position and answered
questions regarding HB 330.
LADDIE SHAW, Coordinator
Veterans Affairs
Department of Military and Veterans Affairs
PO Box 5800
Ft. Richardson, Alaska 99505-0800
POSITION STATEMENT: Provided department's position regarding HB
330.
CLEM BOUCHER
PO Bo 258
Glennallen, Alaska 99588
POSITION STATEMENT: Testified in support of HB 330.
TOM WESTALL, General
Alaska State Defense Force
PO Box 5800
Ft. Richardson, Alaska 99505
POSITION STATEMENT: Provided information on HB 331.
CRAIG CHRISTENSEN, Colonel
Chief of Staff
Alaska Army National Guard
PO Box 5800
Ft. Richardson, Alaska 99505
POSITION STATEMENT: Testified on HB 331.
MIKE SCOTT, Manager
Matanuska-Susitna Borough
POSITION STATEMENT: Commented on HB 137.
KEVIN RITCHIE, Executive Director
Alaska Municipal League
217 Second Street, Suite 200
Juneau, Alaska 99801
POSITION STATEMENT: Provided information on HB 137.
ACTION NARRATIVE
TAPE 00-22, SIDE A
Number 0001
CHAIR JEANNETTE JAMES called the House State Affairs Standing
Committee meeting to order at 8:10 a.m. Members present at the
call to order were Representatives James, Green, Hudson,
Kerttula, and Smalley. Representatives Whitaker and Ogan were
absent.
HB 330-POW/MIA DAY & WOMEN VETERANS DAY
Number 0086
CHAIR JAMES announced the first order of business is HOUSE BILL
NO. 330, "An Act establishing Prisoners of War and Missing in
Action Recognition Days and Women Veterans Day; and providing for
an effective date."
CAROL CARROLL, Director, Administrative Services Division,
Department of Military and Veterans Affairs, deferred to Laddie
Shaw, Coordinator for Veterans Affairs.
Number 0215
LADDIE SHAW, Coordinator, Veterans Affairs, Department of
Military and Veterans Affairs, testified via teleconference from
Anchorage. He said the Department of Military and Veterans
Affairs supports HB 330. He has met with former prisoners of war
and has attended meetings with women veterans from around the
state, and HB 330 is supported by those two groups. He asked
that the committee move HB 330 forward.
Number 0331
CLEM BOUCHER testified via teleconference from Glennallen. He
said he fully supports HB 330 except for the Women Veterans Day
part. He commented that he felt that women are being doubly
recognized for Veterans Day, and he feels that one day should
take care of all veterans. He explained that he is not opposed
to women having a day [but not two days].
Number 0411
CHAIR JAMES mentioned that she tended to agree with Mr. Boucher;
however, she does support HB 330.
CLEM BOUCHER acknowledged that a Veterans Day already exists, but
having another Women Veterans Day gives women double recognition
for their work. He indicated he is not disputing their work but
he is just pointing out that women are getting two days of
recognition.
Number 0491
REPRESENTATIVE HUDSON made a motion to move HB 330 out of
committee with individual recommendations and the attached zero
fiscal note; he asked for unanimous consent. There being no
objection, HB 330 moved from the House State Affairs Standing
Committee.
SB 236-POW/MIA DAY & WOMEN VETERANS DAY
Number 0560
CHAIR JAMES announced the next order of business is SENATE BILL
NO. 236, "An Act establishing Prisoners of War and Missing in
Action Recognition Days and Women Veterans Day; and providing for
an effective date."
CHAIR JAMES informed members that she wanted to waive SB 236
because it is identical to HB 330 and it does not seem necessary
to hear SB 236. There being no objection, SB 236 was waived out
of committee.
HB 331-ALASKA NATL GUARD/NAVAL & STATE MILITIA
Number 0628
CHAIR JAMES announced the next order of business, HOUSE BILL NO.
331, "An Act relating to payment, allowances, and benefits of
members of the Alaska National Guard and Alaska Naval Militia in
active service; relating to computation of certain benefits for
members of the Alaska State Militia; and providing for an
effective date." [Before the committee was CSHB 331(MLV).]
CAROL CARROLL, Director, Administrative Services Division,
Department of Military and Veterans Affairs, said she has online
Colonel Craig Christensen, Rick Turcic, and General Westall to
answer questions. She explained that HB 331 proposes three
amendments to current statute. The first is to change the name
of the Alaska State Militia to the Alaska State Defense Force.
Therefore, Sections 1-4 and Section 11 merely change the name.
She explained that in statute now there is something called the
Organized Militia, made up of the National Guard, the Naval
Militia, and the Alaska State Militia (to be called Alaska State
Defense Force).
MS. CARROLL explained that second, HB 331 streamlines the process
for calculating pay for the National Guard and the Naval Militia
section of Alaska's Organized Naval Militia when they are called
to state active duty. She mentioned that the governor does that
for search and rescue, an emergency or a disaster. In the
[legislators'] packet she had provided a two-page description of
current calculations used to calculate both pay and allowances
for members of the National Guard and the Naval Militia. She
informed the committee that HB 331 will allow the department to
multiply the minimum base pay by 200 percent to arrive at active
duty pay. The first page shows how many steps the department
must perform now to accomplish payment, and the second page shows
how much the process would be streamlined by HB 331.
MS. CARROLL remarked that the third thing that HB 331 does is
institute a statutory method of paying the Alaska State Defense
Force when called to state active duty. She added that about a
year ago the department was notified by the Department of Law
that the Department of Military and Veterans Affairs had been
paying the Alaska State Defense Force in error. She recognized
that her department was paying them the same way as the Naval
Militia and the National Guard. Since that time the department
has been bringing members of the Alaska State Defense Force on
active duty and paying them as non-permanent state employees.
That does cause some problems because the Alaska State Defense
Force is a military unit under military command structure and
discipline. The Alaska State Defense Force also has the
protection of statute in that the members have other jobs;
therefore, they have a protection from their employers to go back
to that job after they have fulfilled their service for the
state. She said that the fact that the department hires Alaska
State Defense Force members as state employees causes some
confusion in the [payment] process. She noted that the third
section of HB 331 would fix the confusion because Alaska State
Defense Force members would be paid as if they were state
employees using state employee pay scales, but they would still
be under military command discipline.
Number 0955
REPRESENTATIVE GREEN asked how National Guard members are
compensated now.
Number 0964
MS. CARROLL replied that they are paid federal wages.
REPRESENTATIVE GREEN asked at what [pay scale] they work, and how
that is established.
MS. CARROLL answered that all National Guard and Naval Militia
people are paid based on their federal pay level and housing
allowance, rations allowance and other factors.
REPRESENTATIVE GREEN asked if the federal pay level and allowance
are higher or lower for a Naval Militia captain who is
temporarily placed into a National Guard unit.
MS. CARROLL replied that the National Guard and the Naval Militia
will still be paid.
Number 1006
REPRESENTATIVE GREEN asked if Alaska State Defense Force members
are compensated upon being called to active duty at the same rate
as National Guard members when National Guard members have
replaced the Alaska State Defense Force at the scene of a
disaster or emergency. He further asked if the formula as
written in HB 331 compensates the Alaska State Defense Force at a
rate comparable to the [National] Guard.
MS. CARROLL answered that the method of payment is different, but
she cannot say if pay rates are different. She said the National
Guard and the Naval Militia will be paid a daily rate.
Number 1061
REPRESENTATIVE GREEN asked if HB 331 pays a higher rate than
National Guard pay.
CHAIR JAMES pointed out that there is a zero fiscal note for HB
331.
Number 1092
TOM WESTALL, General, Alaska State Defense Force, testified via
teleconference from Anchorage. He said that Alaska State Defense
Force soldiers, since they are in state military formations,
would get pay commensurate with whatever job they happen to take
in an emergency situation. During an emergency the Alaska
Division of Emergency Services or [Alaska State] Troopers would
have to hire civil employees anyway, and certain tasks would be
assigned. He explained that to pay Alaska State Defense Force
members by rank is cumbersome when coming in under emergency
capacity because the first one on the scene may be an individual
with the rank of major, but the job needing attention may be a
telephone receptionist or telephone coordinator. He commented
that the major would not be paid by his rank but would be paid by
the classified job description of whatever job that major was
performing. He indicated this method of payment is beneficial,
economically manageable for the state, and provides an immediate
service.
Number 1223
GENERAL WESTALL mentioned that the Defense Force can call up 100
soldiers within 24 hours at any given moment. This [capability]
provides an excellent utility for the Division of Emergency
Services to go into operation in any emergency without having to
stop to do outside hiring to fill all those positions needed for
a 24-hour operation. In 72 hours, the current staffing of
Emergency Services would be exhausted without some augmentation.
The State Defense Force supplies the force multiplier that can
make the organization operate for 24 hours a day and provides
immediate emergency response. The Defense Force has had much
experience since 1983 in emergency response; therefore, the
utility aspects are very advantageous to the state, plus the pay
is appropriate to the job being performed instead of paying a
high-ranking person to do an ignominious task. He added that the
jobs are already classified in the personnel management system;
therefore, the department is not changing any pay scale or pay
rate but merely providing a service that is already a known
quantity.
Number 1311
REPRESENTATIVE GREEN said it seems the pay system could be a
nightmare if the major came on duty in an ignominious position
for three hours and then went to another job and over a period of
24 hours he had seven different jobs. He asked if the major in
such an instance would fill a timecard in for seven different
positions.
GENERAL WESTALL replied that such a scenario does not usually
happen. He noted that he has one battalion already pre-trained
to go into emergency services in their state emergency
coordination center. He explained that those jobs have already
been pre-[assigned] and those personnel know exactly what they
are going to do so the emergency center can [start] operating
very quickly. He mentioned that pre-trained personnel are
staffed appropriate to their rank and so most of them receive
minimum daily pay anyway but there will be some supervising
officers that would naturally take a supervisory position. He
indicated that the scenario as described by Representative Green
happens when soldiers are rapidly deployed into the field and end
up performing a variety of jobs. He agreed that in those cases
there is some mismatch of Defense ranks versus the job being
performed and occasionally a switch from one job title to
another. He remarked that Emergency Services staff keep track of
the payroll and try to minimize administrative nightmares, but he
acknowledged that what Representative Green had described does
occur occasionally.
Number 1459
REPRESENTATIVE GREEN said he is concerned because if the
department has established an emergency team and then replaces
them with soldiers from the Naval Militia, for example, then the
second group should receive comparable pay. It seems much easier
to him that the department would pay like [duties] for like
[duties] instead of going through extra work to figure pay rates.
REPRESENTATIVE HUDSON inquired as to what was the basis for the
200 percentile. He asked if the percentile was supposedly going
to hold everybody on par with the position that they are
replacing.
Number 1577
CRAIG CHRISTENSEN, Colonel, Chief of Staff, Alaska Army National
Guard, testified via teleconference from Anchorage. He said he
has become familiar with the pay system by reason of his senior
position. He noted that National Guard officers are federally
recognized. He added that they have a federal promotion system
that requires years of service and determining factors that
require education, which system is totally separate from the
Alaska State Defense Force. He explained that Alaska State
Defense Force individuals are promoted under a different system,
are appointed and can be appointed with no military service based
on their civilian experience, so the department is talking about
two totally separate systems. He commented that the Alaska State
Defense Force also is a cadre outfit, meaning that it is top-rank
heavy and has many officers in the cadre leadership. He
mentioned that the Alaska State Defense Force waits for
mobilization before filling its enlisted ranks.
Number 1714
COLONEL CHRISTENSEN informed the committee that the department
had reviewed pay rates from colonel down to private and found
that it required 345 hand calculations across pay tables to start
with basic pay entry date, years of service, how many dependents,
ration allowances, cost of living allowance (COLA), and many
other calculations to produce payroll. He emphasized that the
department was seeking a simple, equitable way to pay individuals
according to their rank and benefits they were already receiving.
He remarked that the department made two schedules wherein a
captain's pay was calculated using the current method of 345
steps and then captain's basic military pay using the 200
percentile was calculated. He said that 200 times the basic pay
for a captain was $18 less than he/she would have received if pay
had been calculated with the 345 steps; therefore, the pay rate
is very close. He added that for first lieutenant pay, the
calculations happened to be equal, and a second lieutenant makes
a little more using the 200 percentile. He stated that the 200
percentile initiative has been offered to the Alaska National
Guard Officer's Association and Enlisted Associations, and there
has been no objection from either one of those associations.
Number 1776
REPRESENTATIVE GREEN made a motion to move CSHB 331(MLV) out of
committee with individual recommendations and the attached zero
fiscal note; he asked for unanimous consent. There being no
objection, CSHB 331(MLV) moved from the House State Affairs
Standing Committee.
HB 137-MUNICIPAL DIVIDEND PROGRAM
Number 1807
CHAIR JAMES announced the next order of business, HOUSE BILL NO.
137, "An Act relating to the municipal dividend program; and
providing for an effective date."
Number 1860
REPRESENTATIVE GREEN made a motion to adopt the proposed
committee substitute (CS), version 1-LS0591\K, Cook, 3/15/00, as
a work draft. There being no objection, proposed CSHB 137,
Version K, was before the committee.
CHAIR JAMES said Version K uses excess earnings of the permanent
fund (PF) after full dividends and inflation proofing. She
explained that the amount of the municipal dividend is calculated
by multiplying $125 times the number of permanent fund dividends
(PFD) paid in the previous fiscal year. Last year there were
570,000 PFDs, so it would yield a total of $71.25 million for
fiscal year (FY 2001) if the legislature passed HB 137.
CHAIR JAMES commented that the proposed CS also changes the
current way of supporting municipal assistance and revenue
sharing. She mentioned that the change is designed to encourage
boroughs and municipalities to provide services identified under
this revenue sharing program. She indicated that the identified
services are police protection, fire, emergency medical services
(EMS) and roads. The proposed CS also provides a $25,000 basic
amount and raises it to $45,000 for small communities.
Number 2061
CHAIR JAMES reminded the committee that one advantage of adopting
the municipal dividend system is simplicity. If a [community]
did not have police [protection], it would not receive $17 per
person for police; the same is true for lack of any other
identified service under the revenue sharing plan. She
recognized that there is encouragement in the proposed CS for an
area to provide identified services. The proposed CS also sets
aside $21 million for a municipal capital matching grants
program, which would replace any general funds designated for
that purpose.
CHAIR JAMES noted that a spreadsheet in committee packets
illustrates what the proposed CS would do for municipalities. She
said that in order to review a particular municipality to find
net result in comparison to what that municipality is receiving
now, look under the title Total New PS Found., fourth to last
column, FY 2000 Current column, and Compare FY 2000 column. She
noted that the last column shows the percent of increase that
each municipality would receive under the proposed CS.
CHAIR JAMES commented that one other good selling point is that
there would be $46.9 million in reduction to general fund
spending under the proposed CS. She mentioned that the proposed
CS is a much simpler way of distributing money.
Number 2240
REPRESENTATIVE SMALLEY said he understood that the calculation is
not a simple "$125 times population" but must also be accountable
to the other criteria listed on the spreadsheet. He noted that
Kenai then would receive $606,086 under the proposed CS.
CHAIR JAMES explained that under the proposed CS, Kenai would
receive $278,203 more revenue sharing than it had received last
year. She commented that there is no relationship between the
number of dividends that may be allocated to an area and
municipal revenue sharing for that area. She mentioned that the
dividends are figured statewide and the $125 for each PF is used
only to establish a fund. She indicated that the fund is
distributed in the manner illustrated on the spreadsheet.
Number 2299
MIKE SCOTT, Manager, Matanuska-Susitna Borough, testified via
teleconference from Palmer. He said he was speaking today on
behalf of the Alaska Municipal League's legislative committee of
which he is co-chair. He noted that the proposed CS is
consistent with what the Municipal League has been speaking to
for the last four years both as a priority in its overall
platform as well as policy statement in support of a community
dividend. He commented that it is clear that the proposed CS
does some things that would be beneficial for municipalities and
local taxpayers. He observed that revenue sharing and safe
communities funding have been reduced over the past several years
whereas property taxes have risen. He stated that in the Mat-Su
Borough revenue sharing goes to pay for roads, fire service
areas, and libraries but does not go to support general
government. Therefore, he added, as funds are reduced, taxes in
road and fire service areas rise, and then the borough reduces
payments to Palmer and Wasilla. In turn, he stated, Palmer and
Wasilla have to come up with local tax revenues to offset those
losses.
MR. SCOTT reiterated that the proposed CS would hopefully set up
an endowment that would allow for funding in the long term and
help the state meet its goal of a long-range fiscal plan. He
said that when the Municipal League has met during the last four
years there is no higher issue than setting a course for long
range fiscal health of both state and municipality. He noted
that the proposed CS is a huge step in the right direction, and
from that standpoint, it concurs with the Municipal League's
legislative committee.
Number 2452
MR. SCOTT said in committee packets there is a letter from the
Municipal League's Revenue and Finance Committee. From the
Municipal League's point of view, the proposed CS is consistent
with the people's vote last November. He commented that there is
a property tax cap due up for vote in November [2000], and the
proposed CS is a way for municipalities to advise the people that
there is a way to backfill revenue losses. He cannot stress
enough the importance of how consistent the proposed CS is with
the Municipal League's top legislative effort.
Number 2460
CHAIR JAMES said the proposed CS does not affect the way the
current PFD system is calculated and would have very minimal
affect on the PFD in future years. She acknowledged that it is
true that the PFD is calculated on total income of the PF plus
earnings, and if $71.25 million is deducted from PF earnings, PFD
calculation will be affected to a small degree. She added that
no matter what long term plan is chosen, the proposed CS could
still be calculated and continued alongside any long-term plan
that is implemented.
CHAIR JAMES noted that stress has been heightened by the 83
percent vote on September 14, 1999, which said no to any use of
PF earnings. After speaking with many folks, she believes that
the people voted no because they did not like the plan.
Therefore, the plan is being scrapped. It is her opinion that
people would be willing to allow use of PF earnings if the money
was benefiting their communities, as the proposed CS does. She
commented that distributing PF earnings money to local government
is more palatable to people than giving the money to the
legislature because people do not necessarily trust the
legislature. She envisioned that if a pot of money is set up and
sent back to local governments for expenditure decisions then
people would be more inclined to use of PF earnings.
Number 2596
MR. SCOTT agreed with Chair James. He said that when taxpayers
understand that a reduction in revenue sharing means a reduction
in their services and increase in local taxes, two thirds of
property tax payers say they do not want to see further reduction
in revenue sharing and municipal assistance. He noted that the
proposed CS provides an opportunity to assist local taxpayers
without impacting the PFD because out in the Mat-Su the PFD is in
fact a big part of the economy. There is much support for the
PFD, but there is also much angst about increasing pressure on
property taxes.
Number 2650
KEVIN RITCHIE, Alaska Municipal League, said revenue sharing has
had an impact on local taxes and now a property tax-cap
initiative is in place, partly in response to what people
perceive as a rise in taxes. He said if there were small cuts to
revenue sharing obviously they could be absorbed by
municipalities. However, over the past 13 years revenue sharing
has been cut from $140 million a year down to the current amount
of $28 million, which is a $112 million cut per year. When cuts
of that magnitude are made, it has to affect services, assuming
that municipalities are still doing about the same types of
things. The proposed CS would set up a way of permanently fixing
revenue sharing, taking a huge step toward stabilizing local
property taxes. He explained that the proposed CS is not the
long-range financial plan, as Chair James has already said.
Nevertheless, he has learned in 25 years of government service
that nothing happens in government except incrementally. The old
saying that "the longest journey begins with a single step" is
absolutely true in government, and this looks like a single step
to him - one that he can understand as a citizen and would
probably endorse.
Number 2753
MR. RITCHIE said that the impact of the proposed CS on the PFD is
somewhere between zero and very small, as Chair James had said.
However, the dollar impact is $125 per person spread to
municipalities where local taxpayers can control the use of that
money. He said that the proposed CS shifts funding from the
state general fund to the new program for both revenue sharing
and capital matching grants. He noted that the Alaska Municipal
League's number one priority is a long range fiscal plan, number
two is revenue sharing, number three is education, number four is
deferred maintenance, and number five is power cost equalization.
He commented that the proposed CS would provide the ability to
meet some or all of those needs to a certain extent and still
maintain a reduction in overall general fund spending.
Therefore, the proposed CS seems like a win on a few fronts. He
emphasized that the spreadsheet under discussion is not a legal
document but is the best estimate available right now so those
numbers might go up or down as the Municipal League talks with
municipalities about what municipalities actually do and how the
money is distributed.
Number 2845
CHAIR JAMES said she thinks that in order to have control over
government funding, it is better to distribute money to local
governments. She explained that she thinks the proposed CS might
even encourage some districts to incorporate and start providing
services for themselves. She commented that she believes that if
money is sent to local government to perform many services that
the state now does statewide, local government could perform for
much less than the state. Also, it would lessen aggravation of
local citizens because they can attend their borough assembly
meetings and be heard. Being heard at a borough assembly meeting
is much more real to people than arguing to get money from the
state for state expenditures; the proposed CS is the first step.
She mentioned that the proposed CS establishes $125 per dividend,
and it is very likely that the amount could be increased when
additional services are identified as being provided by the state
[when they could be provided just as well by local government].
Number 2961
MR. RITCHIE reminded the committee that local taxes are not low.
For example, Juneau has a five percent sales tax and some places
in Alaska have a seven percent sales tax. Alaska is the leader
in the United States of increasing property taxes as a percentage
of the entire state budget; the reason for that is because the
state budget has been going down. Property taxes are providing a
bigger portion of money that runs government, and the whole issue
is money. The proposed CS is a very reasonable approach to
showing local taxpayers that they can still maintain local taxes
at a reasonable rate and provide more services.
TAPE 00-22, SIDE B
Number 2914
REPRESENTATIVE GREEN said he is concerned that legislative
prerogative to spend state money being committed to the proposed
CS is very similar to a dedicated fund which is unconstitutional.
He explained he is not saying that the proposed CS is
unconstitutional, but it is right on the borderline; the
committee needs to find out for sure if the proposed CS is
constitutionally correct. He noted that he thinks PF earnings
are ultimately going to be needed, which was intended when the PF
was initiated. He suggested that the proposed CS be modified to
become one of the budget categories to be approved by the
legislature every year; then he could accept the proposed CS, but
right now he has a real problem with it.
Number 2846
CHAIR JAMES said the committee can get a reading on the
constitutionality issue. She explained that she would agree in
part to what Representative Green stated. She agreed that when a
fund is set up, such as dedicated program receipts, though the
legislature is not bound to abide by the intent, it is expected
that the legislature will fulfill the intent. She commented
that dedicated program receipts identifies money coming in, and
the legislature has allowed the state to dedicate those receipts
for a certain program without suffering unconstitutional
repercussions. The legislature has to appropriate the funds for
dedicated program receipts, and the legislature would also have
to appropriate funds for the proposed CS; so she does not see any
difference between the two. She mentioned that the legislature
has the option to change the dollar amount [$125] and can change
the allocation because the proposed CS is a statutory scheme
completely under legislative control. She stated she does not
believe that the proposed CS sets up a dedicated fund.
CHAIR JAMES announced the HB 137 would be held for further
discussion.
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 9 a.m.
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