Legislature(2025 - 2026)GRUENBERG 120
03/18/2025 03:15 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| Overview(s): 2025 Spring Revenue Forecast | |
| Overview(s): 2021 Comprehensive Fiscal Policy Working Group Recommendations | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 114 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 18, 2025
3:19 p.m.
DRAFT
MEMBERS PRESENT
Representative Ashley Carrick, Chair
Representative Andi Story, Vice Chair
Representative Rebecca Himschoot
Representative Ky Holland
Representative Sarah Vance
Representative Kevin McCabe
Representative Elexie Moore
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
OVERVIEW(S): 2025 SPRING REVENUE FORECAST
- HEARD
OVERVIEW(S): 2021 COMPREHENSIVE FISCAL POLICY WORKING GROUP
RECOMMENDATIONS
- HEARD
HOUSE BILL NO. 114
"An Act relating to the Alaska permanent fund; relating to
permanent fund dividends; relating to the use of state income
from mineral lease rentals, royalties, royalty sale proceeds,
federal mineral revenue sharing payments, and bonuses from
mineral leases; relating to contributions from permanent fund
dividends to the general and permanent funds; and providing for
an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ALEXI PAINTER, Director
Legislative Finance Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Gave the 2025 Spring Revenue Forecast
overview.
JONATHAN KREISS-TOMKINS, Former Representative
Sitka, Alaska
POSITION STATEMENT: Gave the 2021 Comprehensive Fiscal Policy
Working Group Recommendations overview.
SENATOR MIKE SHOWER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided comment during the 2021
Comprehensive Fiscal Policy Working Group Recommendations
overview.
ACTION NARRATIVE
3:19:54 PM
CHAIR ASHLEY CARRICK called the House State Affairs Standing
Committee meeting to order at 3:19 p.m. Representatives Vance,
Holland, Himschoot, Story, and Carrick were present at the call
to order. Representatives McCabe and Moore arrived as the
meeting was in progress.
^OVERVIEW(S): 2025 Spring Revenue Forecast
OVERVIEW(S): 2025 Spring Revenue Forecast
3:21:04 PM
CHAIR CARRICK announced that the first order of business would
be the 2025 Spring Revenue Forecast.
3:21:22 PM
ALEXI PAINTER, Director, Legislative Finance Division,
Legislative Agencies and Offices, began the 2025 Spring Revenue
Forecast overview via a PowerPoint [hard copy included in the
committee file], titled "State of Alaska Fiscal Outlook."
Following the title slide, he moved to slide 2, which showed a
graph of various revenue streams in the undesignated general
fund (UGF) from fiscal year 2014 (FY 14) to FY 25: Petroleum
Revenue; Non-Petroleum Revenue; permanent fund dividend (PFD)
from the earnings reserve account (ERA); percent of market value
(POMV); UGF Agency Ops; Statewide Ops; Capital; and PFDs. He
explained he picked FY 2014 because it was the start of Alaska's
decline in oil revenue. Within each bar [for each fiscal year]
he noted the color coding as follows: dark blue for agency
operations; light blue for statewide operations; golden brown
for capital budget; and gray for PFDs. The background shows
revenue sources. From FY 14 through FY 18, the state averaged
deficits of $3 billion annually. There was a combined amount of
$16 billion in the constitutional budget reserve (CBR) and the
statutory budget reserve (SBR), and by the end of FY 18 those
two main accounts dropped to under $2 billion. He noted that in
FY 19, the Alaska State Legislature enacted the POMV draw from
the permanent fund, shown as purple on the chart. Before that,
the PFD came from the ERA before then, shown in red. Since
that, the state has had relatively balanced budgets. From FY 19
through FY 25, the state has had a pre-transfer deficit
averaging $200 million a year. He offered clarification to
Representative McCabe regarding money that would have gone to
the PFD but remained in the ERA and the change to a POMV draw in
FY 19.
3:26:05 PM
MR. PAINTER, in response to Chair Carrick, noted that the
capital budget in FY 25 was approximately $330 million UGF after
vetoes. For comparison, he noted that the governor's request
for FY 26 is $294 million. He recommended looking at the budget
"session by session" rather than by year. He commented on the
"total picture last year" with a $120 million in supplemental
capital projects; this year there is no surplus from the prior
year, so the governor's capital budget has $500,000 UGF.
3:28:11 PM
MR. PAINTER, in response to questions from Representative
Himschoot, said the cost to match federal funds is about $150
million. Approximately 55 percent of the governor's capital
budget matches federal funds. He spoke about the federal
infrastructure bill, and he explained that statewide operations
include debt service for school debt reimbursement or school
general obligation bonds and state assistance for retirement,
for example.
3:30:10 PM
MR. PAINTER, in response to Representative Holland, noted that
the division's website offers historical graphs that include
statistics with and without inflation. He explained how
inflation can take a long time to affect the budget due to
multi-year contracts.
3:33:02 PM
MR. PAINTER, in response to Representative McCabe, said the
division has not been tasked with comparing investment analysis
and this is ultimately a policy call for legislators. He talked
about not drawing out from investment during down year and
"riding those swings." He mentioned investments in private
equities compared to the retirement fund and the effects of
long-term time horizons with different strategies. He said
comparing it to the treasury would be good.
3:38:48 PM
MR. PAINTER returned to PowerPoint and proceeded to the next
slide, which illustrates the structural budget deficit. He
pointed to FY 25 and noted that the legislature had a balanced
budget, but oil revenue subsequently dropped by approximately
$22 million, and there is no designated source to fill that
deficit. The governor has $91.4 million in supplemental
requests, which brings the deficit to $172.5 million. The
governor proposes to pull that out of the CBR, and the
legislature will have to address that. He noted that the
governor cannot sign an unbalanced budget; he cannot sign
appropriations to the supplemental budget unless the legislature
gives him the fund source. For FY 26, the governor's budget
illustrates the structural budget deficit. He has a statutory
PFD [in the proposed budget], which Mr. Painter said the state
has not actually paid out in nearly a decade. He reported that
with the governor's budget and the statutory dividend, the
deficit is approximately $1.56 billion. He said there is
approximately $3 billion in the CBR, so if drawn from there, the
legislature would be drawing more than half the CBR to fill the
FY 26 deficit.
3:42:19 PM
MR. PAINTER, in response to Representative Story, explained the
appropriation in FY 25 for the PFD, and specified that
additional "energy relief" came out of the FY 24 revenue. Next,
in response to Representative Himschoot, he pointed out that
other states do not have revenue volatility to the degree that
Alaska does because of its reliance on petroleum revenue. He
advised that a balance for Alaska would mean a balanced budget
with statutory formulas followed.
3:45:53 PM
MR. PAINTER, in response to Chair Carrick, answered that the
state having a budgeting plan closest to Alaska's, with a
savings plan withdrawal to balance the budget, would be North
Dakota, which pulls from a permanent fund. He opined that the
state was using reserve draws in an unsustainable fashion.
3:46:45 PM
MR. PAINTER, in response to Representative Holland, remarked
that the governor's long-term fiscal plan, the 10-year plan he
submitted with the budget this year, showed essentially no
policy changes going forward. He noted that FY 24 ended with a
$12-billion budget balance in the CBR and the account cannot be
run negative. He explained that some previous governors have
tried to have long-term plans to balance the budget. He said
one governor had five different scenarios that could address the
budget.
MR. PAINTER noted that one path would be what the legislature
did in 2021, when the Fiscal Plan Working Group was established
to produce a plan. He said it developed a framework for what
the plan could be, but the legislature did not adopt the plan.
He said that this is a policy choice and there were several ways
to make the math work with changes to expenditures and revenue.
He said that there was a large menu of options and he opined
that the Fiscal Plan Working Group was trying to create a
framework relative to this.
3:50:31 PM
MR. PAINTER proceeded to Slide 4, which offered a different way
to visualize the governor's amended budget. He pointed out a
visual summary of the sources of UGF revenue and the percent
draw from the permanent fund. He noted that the governor has a
$1.65-billion deficit, but it is important to note that this is
not where the state would end up; the budget number did not
include some things that would be added by the end of the year.
The biggest of these additions would be school funding. He
noted that the governor introduced two bills with a total FY 26
cost of $133.7 million. In the governor's budget, this is not
included because fiscal notes are not included in a budget. He
explained that last year there were $182 million of additional
school funding outside the formula, which was the reason that
there was a big decrease in the fiscal summary between FY 25 and
FY 26 operating budgets. He said that the governor is proposing
something like $133 million with his two bills and HB 69 has an
estimated cost of around $275 million. He said that when adding
this to the deficit, it would be a larger number.
MR. PAINTER remarked that the governor's budget at this point
includes three unions that are currently up for renegotiation.
He said that $40 million has often been a placeholder for
remaining negotiations. He said that the placeholder was made
with 3 percent per union. Correctional officers came in at 11
percent, the Mount Edgecumbe Teachers came in at 5.6 percent,
and the university 2.75 percent. He said that it was difficult
to determine outcomes to negotiations but there will be an
increase to the budget, especially considering the near
completion of a statewide salary survey.
3:53:35 PM
MR. PAINTER, in response to Representative Story, explained
reappropriated funds (RAs). He said the source of revenue that
primarily goes into this was the RA fund, a fund capitalized
into the operating budget and then spent without further
appropriation by the Department of Education, he said that
capitalization provides the primary funding. He explained that
the legislature is often chosen to add additional appropriations
in the capital budget; the governor does not have any of those
in his budget this year. He mentioned moratoriums that have
been placed on reimbursements and fiscal year lapses which
render new debt eligibility.
MR. PAINTER, in response to additional questioning, commented on
the longer term revenue outlook and its implications for the
governor's ten-year plan. He demonstrated the revenue over a
near decade, FY 26 to FY 34. He said that the PowerPoint showed
SOA's POMV revenue on the bottom in blue, the royalties,
production tax, other petroleum revenue, and non-petroleum
revenue were the bars adding up to the sum of UGF revenue. He
said that the last line of the visual summary was FY 26 growing
with inflation. He pointed out that through FY 32 the revenue
would not keep up with inflation. He anticipated that given any
gap during the current fiscal year, there would still be a gap
in FY 32 and FY 33.
3:55:29 PM
MR. PAINTER remarked that in FY 34, there is indication that
revenue may start to overtake inflation slightly because of
expectations of new fields coming online at slightly higher
prices, but it would still be close to the inflation line. He
said that when building a fiscal plan, one thing that is often
ascertained is that if a budget is balanced in the current year,
then it is often balanced in the future.
3:56:56 PM
MR. PAINTER, in response to questions from Representative
McCabe, said school bond debt reimbursement programs would
either be 40 or 50 percent based on the nature of the project.
He noted that the Department of Education reviews the projects
and could not place bonds on activities that do not qualify as
eligible projects. He said that these projects were open-ended
obligations with current program structure.
MR. PAINTER remarked that current inflation given by an SOA
investment advisor was 2.5 percent.
3:59:05 PM
MR. PAINTER, in response to questions from Representative Story,
said that school bond debt funding was subject to appropriation
each year. He said there have been instances where a governor
has vetoed a portion of school debt reimbursement but ultimately
the legislature ended up repaying the vetoed amounts. He said
that things can be "open-ended" because the state cannot pick
and choose between school districts.
4:00:43 PM
MR. PAINTER, in response to questions from Representative Moore,
said that there were a few ways that House and Senate Finance
Committees have looked at this. These included potential plans
that did not quite balance the state budget but were closer than
the governor's plan. He remarked that the Senate Finance
Committee asked for budget scenarios that included a dividend
with a 25 POMV draw and a $680 base student allocation (BSA).
He remarked that a deficit would remain with this BSA but less
than the governor's proposal. The committee said that they
would have to support new revenue to try to address the
difference. He said that the House Finance Committee ran a few
scenarios with five different dividends and a $1,000 BSA. He
said that only one of the scenarios was successful at balancing
a budget. He said that both the House and Senate Finance
Committees have not been able to develop a solution since a
deficit is evident in both their preferred plans.
4:02:29 PM
MR. PAINTER, in response to questions from Representative Vance,
remarked that budget focus regarding the BSA has been mostly on
the upcoming three years, FY 26 through FY 28.
4:04:38 PM
MR. PAINTER, in response to a question from Representative
McCabe, noted that a $1,000 BSA increase and a plan to manage
leftover capital was one of the scenarios in the House Finance
Committee.
^OVERVIEW(S): 2021 Comprehensive Fiscal Policy Working Group
Recommendations
OVERVIEW(S): 2021 Comprehensive Fiscal Policy Working Group
Recommendations
4:05:12 PM
CHAIR CARRICK announced that the final order of business would
be the 2021 Comprehensive Fiscal Policy Working Group
Recommendations overview.
4:06:27 PM
JONATHAN KREISS-TOMKINS, Former Representative, Alaska State
Legislature, began the 2021 Comprehensive Fiscal Policy Working
Group Recommendations overview via PowerPoint [hard copy
included in the committee packet]. He said that the group was
born out of one of the many situations of "political
brinksmanship" where the government is near shutdown and
legislature could not agree to budget solutions. He said that
during his tenure at the legislature and time working with the
Fiscal Policy Working Group, it was unclear whether the
legislature would have a budget by the upcoming fiscal year. He
said that in this type of "political crisis," the leaders of the
four caucuses at the time agreed that a bipartisan working group
would be a good approach at attempting to tackle budgetary
issues. He related that the working group comprised eight
members - two members from each of the four caucuses, and his
role was a "co-facilitator" for the House.
MR. KREISS-TOMKINS described Mr. Painter's presentation as a
good summary of current situation regarding Alaska's budget. He
commended Mr. Painter and the Legislative Finance Division for
serving as key parts of the budget delegation process. He said
that his goal while in the working group was to be as "math-
driven" as possible when addressing the previous and current
reality of SOA's budget. He echoed Mr. Painter in saying that
the established process for the group was to define a reasonable
set of fiscal assumptions and their outcomes. He said that in
his experience this was challenging due to often differing
opinions amongst legislators due to different baseline fiscal
assumptions.
MR. KREISS-TOMKINS advised that to speak the same language with
regard to solutions, there needs to be a commonly shared
definition of the budgetary problem. However, people often use
different assumptions in terms of optimism and pessimism given
oil forecasts, inflation, or a variety of other factors. He
explained that incorrect assumptions are consequential when
building projections around a deficit or size of deficit. It
took time for the working group to determine a universal set of
fiscal assumptions. During his time with the Fiscal Working
Group a common set of assumptions was established amongst the
group. He said members of the working group then worked with
the division to investigate various means to balance the budget.
He said that it put each member of the group "in a box with a
math problem." He said that various members of the group solved
the problem in different ways because of differences in policy
priorities. He said it was a balance between leaning heavily on
cuts and leaning heavily on revenues. He remarked that
comparisons between how members balanced the budget and solved
the "math problem" was a very important exercise for future
deliberations. He commented that the division has a terrific
model for budget simulations for upcoming and future fiscal
years. He opined that it was a very constructive tool for any
legislator who is serious about a balanced budget.
4:13:53 PM
MR. KREISS-TOMKINS emphasized that no one component was
supported in isolation. He said he thinks this is the political
problem surrounding the budget deficit in Alaska. He explained
that "for most legislators, the policy solutions that are on the
table are interdependent and conditional on each other." He
noted that interdependency and conditionality can be difficult
politically and that it was a reason SOA has not been able to
pass a fiscal plan in a couple of decades. He remarked that
positions that each working group member had on any single
provision were understood within the context of a comprehensive
solution, which meant that members could not necessarily "cherry
pick" [from varying models].
MR. KREISS-TOMKINS remarked that there were a few important
structural pieces that needed consideration by group members.
These included: a single account permanent fund dividend (PFD)
structure; constitutional certainty for the PFD; a new PFD
formula rather than the current statutory formula; a healthy
capital budget; spending limit reform; necessity of a
transitional period to bridge things; and constitutional budget
reserve (CBR) reform, specifically the sweep process that
happens every year. He said that these were all key pieces that
led to an eight-way consensus amongst members, many of whom held
different ideological positions on the budget. He said that
previous members of the fiscal working group could speak to
experiences as well.
4:18:43 PM
REPRESENTATIVE MCCABE remarked that there were a couple of
things worth considering following Mr. Kreiss-Tomkins testimony.
He remarked that when previously working in the group, there
were certain things that members unanimously agreed to, and they
were included in the report [included in committee file]. He
said that these agreements were important given differences in
opinion regarding the budget.
REPRESENTATIVE MCCABE said that he was insistent on a full PFD,
but it rapidly became apparent that he could not hold that
position. He said after extensive discussion it was apparent
that the entirety of the budget could not be balanced on a
single issue. He said that the unanimous conclusions amongst
working group members were the important ones.
REPRESENTATIVE MCCABE said that he did not even like talking
about taxes, yet discussions were held regarding new revenue
development and finding a path forward. He said that Mr.
Painter provided the working group with five different modeling
spreadsheets where inputs could be entered to see how it
impacted areas of the budget. He said this is good exercise for
anyone interested in the fiscal realities of budgeting. He said
he ran around 50-60 different scenarios to evaluate how it
impacted the outcome of the budget. He said that truly, once
out of the ideological box, it really is just a "math problem."
4:21:11 PM
MR. KREISS-TOMKINS, in response to questions from Representative
Vance, said that the presentation from Mr. Painter was
informative and served as a refresher for the current state
budget. He said that it seemed that there were similar elements
regarding the budget currently and during his time with the
working group. He noted, however, that the politics regarding
the PFD may have shifted in previous years. He did not believe
that the state's uncertainties would get solved unless some or
all the components were enacted. He said then when he
interfaced with the budget model, he would pull levers that were
often different from other legislators. He said that political
compromise was required, especially for structural budget pieces
to be in place. He opined that there is no way to create a
long-term fiscal stability plan without constitutional
amendments, largely because the PFD is fundamentally unsound.
He discussed the two-thirds vote required for a constitutional
amendment and the bipartisan compromise often required to enact
them.
4:27:11 PM
SENATOR MIKE SHOWER, Alaska State Legislature, at the invitation
of Chair Carrick, emphasized the importance of this "crosstalk."
He remarked on previous budgetary discussions with Mr. Kreiss-
Tomkins while in working group. He said that the political
differences between members fostered long dialogues and
collaboration. He said that political members can compromise on
policy but not principles and this was important to understand.
He said that remaining in an "ideological sandbox" would not
solve budgetary problems.
SENATOR SHOWER complimented the presentation by Mr. Painter and
highlighted challenges of presenting solutions that often
involve compromise. He remarked that the changes to the CBR and
earnings reserve account (ERA) in previous years suggest that
the legislature has been "kicking the can down the road" for
over a decade. He said that he cannot see that any legislator
could fail to acknowledge that SOA is spending more than it was
taking in. He raised concerns to implications to the PFD and
state savings if corrections were not made. He talked about
challenges involving taxes for revenue generation and striking
the right balance to encourage investment. He stated that a
stable fiscal environment was imperative for this type of
investment.
SENATOR SHOWER, in summary, said that to address the budgetary
issues, all legislative members would need to "take a hit" to
their preferred plan to make the appropriate compromise to
address the budget. He said that kicking the can down the road
was no longer appropriate regarding the current budget
forecasting.
4:33:16 PM
CHAIR CARRICK remarked that in 2024, there had been a fiscal
retreat for freshman legislators in which Mr. Painter
participated. She said that an out-of-state moderator helped
foster discussions. She said that in the absence of the former
House Special Committee on Ways and Means, the House State
Affairs Standing Committee should discuss fiscal policy,
especially given many of the committee members' interest in it.
4:34:21 PM
MR. KREISS-TOMKINS, in response to Representative Himschoot,
said that adding the components required for a healthy budget
would require trust, patience, and multi-piece legislative
package. He said that collaboration would be required between
both legislative bodies and the governor. He talked about
coordination and timing with regard to running bills through
both bodies and the trust required. He said the structural
budget problem reflects a degree of political complexity.
MR. KREIS-TOMKINS remarked on involvement during previous budget
discussions. He said that the Office of the governor had not
been directly involved with the prior working group. However,
there was some informal dialogue that occurred with the
governor's staff.
4:39:37 PM
REPRESENTATIVE MCCABE remarked that he did not recall the
governor's office being involved in previous working group
discussions. He remarked that timing was important when
considering structural components relevant to balancing the
budget. He said that political strife can arise when timing was
not appropriate.
4:41:24 PM
REPRESENTATIVE HIMSCHOOT said that to her understanding, a
constitutional change would require the vote of the people. She
said that legislative decisions would need to take this into
consideration.
REPRESENTATIVE MCCABE confirmed this understanding. He
discussed previous attempts to constitutionalize the PFD. He
said any attempts would be put in front of the people and he
believed this was a hang-up for many legislators. He remarked
on constituents that want a voice with regard to PFD changes.
He concluded by saying that both a constitutional change to a
spending cap and the PFD would require a vote of the people.
4:42:52 PM
SENATOR SHOWER offered a few points of consideration. The first
was that the governor was interested in a plan and seeing what
the legislature was able to put in front of him that balanced
the budget. Second was that there had been discussions
regarding contingency language to add a little more security to
budget plans. The third was that a 50/50 dividend was still
being discussed.
4:43:44 PM
MR. KREISS-TOMKINS, in response to Representative Holland,
remarked that there was no silver bullet answer for solving
budget issues. He said that trust and collaboration would not
involve caucus to caucus disputes, as it would never result in a
two-third vote required for a constitutional amendment, and the
problem would remain unsolved. He remarked that urgency and
crisis have always served as a trigger for action in legislative
affairs.
MR. KREISS-TOMKINS opined that the ticking time bomb in the
state was the two-account structure and the PFD, and they have
been problematic for some time. He said that as the stock
market approaches correction territory, things become riskier
year after year. He raised caution to where the state could
have no budget available to operate the state. To him as a
private citizen, it was something that would provoke action. He
said this type of crisis is not predictable; it is known to
exist, with varying odds, but it was not time-specific.
4:49:47 PM
REPRESENTATIVE STORY thanked each member of the working group
who shared their insights. She asked whether the working group
had reviewed indirect expenditure as stated in the working group
document [in committee file].
SENATOR SHOWER said that he appreciated the opportunity to speak
with the committee regarding budgetary issues, and it was
something not often done in both chambers. He said it would
likely be the most important thing that can be done in the next
couple of years. He remarked on a popular phrase that "the best
time to plant a tree was twenty years ago. The next best time
is today." He remarked that budgetary solutions can be viewed
the same way. He said many legislators were new and
acknowledged the issue even without experience at the
legislature. He said now may be the time to have all four
caucuses engaged in discussions and "all hands-on deck." He
remarked on making meaningful changes to the budget for the sake
of the kids and grandkids in Alaska. He wanted Alaska youth to
inherit a state in which to be proud.
REPRESENTATIVE MCCABE responded to a previous question from
Representative Story and noted that Senator Hughs had looked at
indirect expenditures, and he did not believe that it was done
as a group. He said that legislators went through an exercise
looking at these expenditures but even given savings, it was not
enough to resolve the root problem. He said it is important to
question whether a state government funded by the PFD earnings,
federal funds, and oil revenues is going to protect Alaska
liberties for citizens who have no financial responsibility
paying for the programs that they demand. He said that this has
been discussed a lot and what was described was "socialism"
where the government is responsible for everything and citizens
pay nothing. He said that taxpayers may quickly vote out their
officials if tax revenue is not spent appropriately. He said
the PFD and base student allocation (BSA) address this very
issue and the problems associated with financing a government
with current funding streams.
MR. KREISS-TOMKINS, in response to previous questions from
Representative Holland and Representative Story, remarked that
the working group had "gotten into the weeds" regarding budget
reductions. He said that as former chair of the House Standing
Committee on State Affairs, he had run many budget reduction
committee bills based on the Legislative Finance [Division's]
indirect expenditure report. He recommended that the committee
members read that report. He talked about challenges associated
with budget reduction measures and said it was more complicated
than using a "magic wand." He remarked that when he first
arrived in Juneau as a legislator in 2013, there were around $16
billion in the CBR, and when he left, there were under $1
billion in the CBR. He shared Representative Holland's
sentiment that the cash was being liquidated due to political
impasse. He said that there is a cost to inaction, both long-
term and acute.
MR. KREISS-TOMKINS noted that his previous involvement with the
working group involved collaboration with Miles Baker, the then
governor's legislative director. He was not involved on a day-
to-day basis but was engaged in the working group processes.
4:59:37 PM
CHAIR CARRICK expressed hope that the House Standing Committee
on State Affairs could foster collaboration and find common
ground while discussing fiscal policy. She mentioned former
Representative Carpenter's involvement on the former House
Special Committee on Ways and Means and hearing bills that he
did not personally support. She said this was the kind of
political courage necessary to remediate budget issues in SOA.
She remarked that future fiscal policy proposals should come
from legislators of both caucuses. She remarked on upcoming
bill proposals and her intention to hear as many bills as
possible. She opined that there was no single issue more
important than addressing the problems associated with SOA's
budget.
5:02:24 PM
REPRESENTATIVE MCCABE remarked that former Governor Jay Hammond
had once said that if the dividend were lost, it would activate
the "militant ring of Alaskans." He said that this seemed to be
the direction the state was going; however, he specified that
"the pain point" would not come until the state dipped into the
corpus of the fund. He offered his understanding that former
Representative Carpenter shared this sentiment.
5:03:07 PM
REPRESENTATIVE VANCE remarked that she hoped that it would not
come to this. She said that one necessary step to a solution is
recognizing that Alaska has a problem. She said that while it
may seem like the legislature was "putting out fires all the
time," this one was to be prioritized. She said that looking
back at the $20-30 billion the state has "blown through" in the
last decade, there was no noticeable improvement to major
infrastructure. She echoed that there was in fact a problem
associated with inaction, it costs opportunity. She opined that
most Alaskans do not realize that most of the state budget comes
from the earnings of the permanent fund and as legislators there
was a responsibility to communicate this. She discussed the
need to "bring the public along" when attempting to pass
legislation that would require a two-thirds vote. She
reiterated that acknowledgment of budgetary issues was
imperative.
5:05:58 PM
REPRESENTATIVE HOLLAND said that looking at the executive
budget, he was mystified by what was occurring. With help from
Mr. Painter, he was able to get some help deciphering how the
Executive Budget Act works but also what was not being done by
the legislature to fulfill the requirements of the act. He
encouraged committee members to familiarize themselves with the
Executive Budget Act and noted that it was a "piece of the
puzzle."
5:07:09 PM
REPRESENTATIVE HIMSCHOOT discussed the capital budget that was
illustrated by the Fiscal Policy Working Group and the federal
match. She raised concern to many of Alaska's dated assets,
including the Fairbanks Pioneer Home, which was in rough shape
and ready to be condemned. She said that much of Alaska was
stuck in the 1980s. She discussed funding differences for
districts in Oregon and compared them to Alaska. She said that
capital projects in the state would become more intensive due to
aging infrastructure.
5:08:42 PM
CHAIR CARRICK acknowledged Representative Himschoot's concerns.
She thanked presenters for their insights.
5:09:07 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 5:09
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HSTA Fiscal Outlook 3-18-25.pdf |
HSTA 3/18/2025 3:15:00 PM |
|
| 2021_Fiscal_Policy_Working_Group-Final_Report.pdf |
HSTA 3/18/2025 3:15:00 PM |
|
| HB114 Sponsor Statement Ver A.pdf |
HSTA 3/18/2025 3:15:00 PM |
HB 114 |
| HB 114 Ver A.pdf |
HSTA 3/18/2025 3:15:00 PM |
HB 114 |
| HB114 Sectional Analysis Ver A.pdf |
HSTA 3/18/2025 3:15:00 PM |
HB 114 |
| HB 114 Fiscal Note DOR-PFD-3-13-25.pdf |
HSTA 3/18/2025 3:15:00 PM |
HB 114 |
| HB 114 Backup LFD Modeling.pdf |
HSTA 3/18/2025 3:15:00 PM |
HB 114 |
| HB114 Presentation 3-18-25.pdf |
HSTA 3/18/2025 3:15:00 PM |
HB 114 |