Legislature(2023 - 2024)DAVIS 106
02/20/2023 06:00 PM House WAYS & MEANS
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| Audio | Topic |
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| Start | |
| Presentation(s): Hw&m Foundation for Discussion | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
February 20, 2023
6:00 p.m.
MEMBERS PRESENT
Representative Ben Carpenter, Chair
Representative Jamie Allard
Representative Tom McKay
Representative Kevin McCabe
Representative Cathy Tilton
Representative Andrew Gray
Representative Cliff Groh
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION(S): HW&M FOUNDATION FOR DISCUSSION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DONNA ARDUIN, Staff
Representative Ben Carpenter
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a presentation outlining the scope
of the House Special Committee on Ways and Means.
ACTION NARRATIVE
6:00:59 PM
CHAIR BEN CARPENTER called the House Special Committee on Ways
and Means meeting to order at 6:00 p.m. Representatives Tilton,
Allard, McCabe, McKay, Groh, and Carpenter were present at the
call to order. Representative Gray arrived as the meeting was
in progress.
^PRESENTATION(S): HW&M FOUNDATION FOR DISCUSSION
PRESENTATION(S): HW&M FOUNDATION FOR DISCUSSION
6:02:17 PM
CHAIR CARPENTER announced that the only order of business would
be the HW&M Foundation for Discussion presentation.
6:02:51 PM
DONNA ARDUIN, Staff, Representative Ben Carpenter, Alaska State
Legislature, began the PowerPoint presentation [hard copy
included in the committee packet], on slide 2, and outlined that
the presentation would cover the scope of the House Special
Committee on Ways and Means and the foundation for a long-term
fiscal and economic plan. She emphasized the committee was
charged with hearing bills and reviewing processes to protect
the economic resources of the state and was open to discussing
economic policies from other committees even if the committee
did not have the bill in front of it.
MS. ARDUIN moved to slide 3, and stated the House Special
Committee on Ways and Means was created under House Resolution
3. She said the committee was established to "consider methods
to control state spending, identify ways in which state
government programs may be made more efficient, and propose new
measures to raise additional state revenue."
6:04:18 PM
MS. ARDUIN continued to slide 4, "Alaska's fiscal problem has
structural factors," which read as follows [original punctuation
provided]:
Lack of a long-term fiscal policy
Affordable & sustainable spending policy
Dependable dividend structure
Revenue plan predicated upon private sector growth
rather than short-term budget needs
Undersized private economy
Lack of accountability and good governance solutions
MS. ARDUIN added on slide 6, by the same name, that the Fiscal
Policy Working Group (FPWG) report unanimously agreed the lack
of long-term fiscal policy was still relevant. She additionally
stated that under an affordable and sustainable spending policy
the committee needed to add spending limits and increase
efficiency in spending.
6:06:36 PM
MS. ARDUIN moved to slide 8, "Undersized private economy," which
read as follows [original punctuation provided]:
When the only tool you have is a hammer, every problem
looks like a nail
Governments tend to look for government solutions for
economic growth; the truth is that private economies
grow when government intrusion is minimized.
Ways and Means is charged with looking at revenues,
which will include Economic Growth by reviewing tax
and regulatory burdens that may inhibit business
investment in Alaska.
One "tax" we will discuss when looking toward economic
growth is the tax on Alaskan's dividends when we don't
pay what is owed.
MS. ARDUIN continued with slide 9, "Lack of accountability and
good governance solutions," which read as follows [original
punctuation provided]:
Performance reviews
The Executive Budget Act
Internal auditors
Legislative oversight of regulations
Ronald Reagan said, "Government is not the solution to
the problem, government is the problem."
MS. ARDUIN summarized on slide 10, that all bills or review
processes the committee would be presented would fall under six
major groups, which she listed as: settling the permanent fund
dividend (PFD), looking at spending caps, talking about
efficient spending policies, promoting economic growth, adding
accountability for good governance, and discussing revenue
generation for government.
6:09:19 PM
MS. ARDUIN explained why Alaska needed to focus on its economy
on slide 11, "Alaska Has an Economic Problem," which read as
follows [original punctuation provided]:
Unemployment 49th Worst
GSP Growth 50th Worst
Education Quality 48th Worst
Interstate Migration 34st Worst
Reliance on Federal $$
6:10:00 PM
MS. ARDUIN displayed a chart on slide 12 comparing the gross
domestic product (GDP) growth of Alaska to the rest of the
nation. She emphasized Alaska was ranked last in the country
for economic growth, and on the next slide that Alaska was the
second worst in the nation for employment.
MS. ARDUIN continued to slides 14 through 15, and showed two
charts outlining how populations were moving away from Alaska,
and how populations moved around the U.S. She further added
that the 15 states with the lowest taxes had gained 2.2 million
people over the last two years, and the 15 states with the
highest taxes had lost 1.2 million people.
MS. ARDUIN moved to slide 16, which depicted a chart from the
Fraser Institute Economic Freedom Index that broke down the U.S.
into four quartiles of economic freedom. She stated that the
chart showed Alaska as one of the least free states.
6:11:11 PM
REPRESENTATIVE ALLARD asked for an example of what the "least
free" meant.
MS. ARDUIN explained that the criteria for what determines the
economic freedom, as per the Fraser Institute, was government
spending, taxes, and regulation.
6:12:27 PM
REPRESENTATIVE MCCABE asked whether people were leaving Alaska
because of "tax from the PFD removal" or because of the "total
economic freedom idea."
MS. ARDUIN guessed that it was all the above. She added that
people were more mobile because of greater job opportunities,
and that Alaska could gain more population by improving its
issues.
6:13:41 PM
REPRESENTATIVE GROH asked to go back to slide 16, "Economic
Freedom in America," to discuss why [West Virginia] was marked
as one of the "least free" and [Virginia] was marked as one of
the "most free." He noted that the life expectancy of people
living in Virginia was significantly higher than the life
expectancy of those living in West Virginia. He wondered if Ms.
Arduin considered economic freedom to correlate with the
desirability to live in a state as indicated by life expectancy.
MS. ARDUIN responded by stating that West Virginia was having a
resurgence in policies promoting economic freedom which would
draw people there.
6:15:28 PM
CHAIR CARPENTER interjected that he had not ordered his staff to
look at life expectancy comparatively between states but would
be willing to hold a meeting to address the topic if the
committee thought it necessary.
6:15:47 PM
MS. ARDUIN continued with the presentation and moved to slide
17, "Performance Compared to the Nation," and showed the
educational performance of Alaska was significantly lower than
the rest of the nation.
MS. ARDUIN outlined the crime rates of Alaska compared to the
rest of the nation on slides 18 through 20. She highlighted
Alaska's crime rate, number of crimes, and violent crime rate
were higher than the national average.
6:16:44 PM
MS. ARDUIN highlighted Alaska's policy problems on slide 21,
"Alaska Has a Policy Problem," which read as follows [original
punctuation provided]:
Spending/Capita 50th Highest
Debt/Capita 43rd Highest
Corporate Income Tax Rate 45th Highest
Welfare Dependency 10th most-dependent
Union Control 13th most-control
Education Choice 28 States have more options
6:17:31 PM
REPRESENTATIVE ALLARD asked Ms. Arduin if she had sourced her
information from the Fraser Institute or from other
organizations.
MS. ARDUIN clarified her sources came from the Kaiser Family
Foundation, The American Legislative Exchange Council (ALEC),
the Tax Foundation, state financial statements, and EdChoice.
6:18:08 PM
MS. ARDUIN continued to slide 22, "Spending per capita," and
displayed a table from the Kaiser Family Foundation that Alaska
spent the most per capita compared to the rest of the nation.
6:18:48 PM
REPRESENTATIVE GROH asked if the data was misleading as it had
not taken into consideration the county spending, as Alaska
managed many of its services on a state level instead of the
more common county level management or private sector that other
states employed.
MS. ARDUIN responded that the data was not misleading and added
that if the table had combined state and local spending, Alaska
would still rank very high.
6:19:38 PM
MS. ARDUIN continued the presentation on slide 23, "Another Way
to Compare," which depicted a graph comparing Alaska's GDP to
the U.S. GDP through different sectors of the economy. She made
note of one of the sectors where Alaska was higher ranked with
"State and local government."
6:20:17 PM
MS. ARDUIN, in response to a question from Representative Allard
about why Alaska was on par with the rest of the country with
"Educational services, healthcare, and social assistance," as
depicted on the graph, explained the data showed the amount of
employment compared to the total employment of the state.
6:21:56 PM
MS. ARDUIN continued with slides 24 through 25, and noted the
high spending of Alaska on education, Alaska's lack of school
choice options, and that 28 states had more school choice than
Alaska. She moved to slide 26, which detailed the different
corporate income tax rates between states. She stated Alaska had
the fourth highest corporate income tax rate and had a very
graduated tax rate. She followed with slides 27 through 29,
which depicted Alaska had been the state with the 48th highest
debt per capita, the least funded pension liabilities per capita
in the country, and less than 70 percent of pension plans had
been funded.
6:24:05 PM
MS. ARDUIN displayed a table on slide 30, which showed Alaska
was the 10th worst welfare dependent state in the country. She
moved to slide 31, which showed which states were "Right to
Work" and which were "Forced Union," and explained union control
correlated with economic outcomes. She added Alaska was the
48th highest in government employment.
6:25:17 PM
CHAIR CARPENTER explained he wanted to see a different approach
in the House Special Committee on Ways and Means, one that was
able to work through the divided legislature. He expressed that
he wanted to see multiple bills in each of the areas listed on
slide 10 so the committee could enact change.
6:27:00 PM
MS. ARDUIN concluded on slides 33 and 34. She spoke about a
proposal on the calendar for the next two months that would
bring together options for a long-term fiscal and economic plan
for the state of Alaska. She added the committee could have
Saturday meetings as needed to receive public testimony and
amend and vote on bills. She emphasized a goal for the
committee to maximize public input and transparency.
6:28:34 PM
REPRESENTATIVE GROH expressed interest in taking inspiration
from the FPWG and suggested having each of the committee members
build a budget.
CHAIR CARPENTER indicated having both individuals and the
committee draft budgets were options.
REPRESENTATIVE GROH stated that the use of individual budget
building [by the FPWG] had decreased the rhetoric and increased
on-the-ground engagement. He additionally discussed that adding
a constitutional single account structure for the percent of
market value system to protect the Permanent Fund was
recommended by the FPWG.
CHAIR CARPENTER brought up one downside to the FPWG was that no
bills came out of it. He expressed he wanted the House Special
Committee on Ways and Means to focus on bills and "action items"
for the legislature to act on.
6:31:55 PM
REPRESENTATIVE MCCABE clarified to Representative Groh that the
FPWG hadn't built budgets, since the budget had been set, but
had adjusted certain aspects of the budget based on a
spreadsheet that Alexei Painter, Director of the Legislative
Finance Division, had provided. He expressed interest in
playing with the spreadsheet more to be able to visualize the
effects certain policies could have.
6:33:28 PM
CHAIR CARPENTER explained the product that Mr. Painter had
presented was an "ideas product," and he stated his hope that
the House Special Committee on Ways and Means would focus on
concrete outcomes. He concluded with further remarks on the
goals of the committee to provide economic growth to the state,
provide good job opportunities, create phenomenal education, and
make the budget balance every year. He expressed his
understanding it would challenging, and he said he didn't agree
with the idea the legislature was not able to handle the issues
at hand.
6:36:40 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Ways and Means meeting was adjourned at
6:37 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| W&M Foundation for Discussion Power Point - Rep. Carpenter.pdf |
HW&M 2/20/2023 6:00:00 PM |