Legislature(2015 - 2016)SENATE FINANCE 532
02/04/2016 09:00 AM Senate FINANCE
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| Audio | Topic |
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| Start | |
| Presentation: State Debt and Credit Rating | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 4, 2016
9:05 a.m.
9:05:25 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:05 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Deven Mitchell, Executive Director, Alaska Municipal Bond
Bank Authority, Department of Revenue.
SUMMARY
^PRESENTATION: STATE DEBT and CREDIT RATING
9:06:11 AM
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE, discussed the
presentation, "Targeted State Debt Summary and Credit
Review" (copy on file). He shared that there were a couple
of mistakes within the presentation.
Co-Chair Kelly encouraged members to hold their questions
until an appropriate time.
Mr. Mitchell looked at slide 1, "State Debt Obligation
Process":
All Forms of State Debt are Authorized First by the
Legislature
For limited obligations following this
authorization the authorized issuer implements
Senator Dunleavy wondered if the debt obligation was open-
ended, or were there separate obligations. He specifically
queried the number of acts passed by the legislature, which
opened the ability to bond. Mr. Mitchell replied that the
authorization was in effect until the implementation.
Senator Dunleavy surmised that that there could be
concurrent obligations. Mr. Mitchell agreed.
Senator Dunleavy gathered that corporations could also be
granted authorization. Mr. Mitchell agreed.
Mr. Mitchell continued to discuss slide 1:
General obligation bonds must also be approved by a
majority of voters
All State Debt must be structured and authorized by
the State Bond Committee
Includes general obligation bonds, subject to
appropriation issues, and revenue bonds
The State Bond Committee determines method and timing
of debt issues to meet the authorized projects cash
flow needs
Committee must hold a publicly noticed public
meeting and approve a Resolution authorizing the
sale of the obligations
Disclosure document, rating agency presentation,
investor presentation, and other legal documents
must be prepared
Bonds are sold and a closing is conducted where
the final documents are signed and funds are
transferred.
The School Debt Reimbursement Program is administered
by the Department of Education and Early Development
Must be general obligation of local government,
at least 10 year and level debt service
9:14:49 AM
Senator Bishop noted the GO bond sale in early 2000s, at a
time of a small capital budget. He remarked that the bond
sales were executed in 2004, but was not utilized until
2008. He stressed that contracts should be project and bid
ready, in order to immediately take advantage of the money
from the bond sales. He noted that assets must be kept at a
high level, to maintain a high value.
Co-Chair MacKinnon queried the members of the Alaska State
Bond Committee. Mr. Mitchell replied that the committee was
established by statute. The members consisted of the
commissioners of the Department of Revenue (DOR),
Department of Commerce, Community and Economic Development
(DCCED), and Department of Administration (DOA); or their
designees. He stated that there were three designees, which
were deputy commissioners of the departments.
Co-Chair MacKinnon surmised that the administration was
driving the committee with how to move forward with debt.
She noted that the school debt program was recently
suspended, with the hope to incur additional debt. She
looked at page 5 of the Debt Report (copy on file). She
noted that the reimbursable figure to the municipalities
was $895 million, but queried the outstanding school debt.
Mr. Mitchell replied that the school debt was approximately
$60 million to $65 million, which was authorized prior to
the January 1, 2015 deadline.
Co-Chair MacKinnon appreciated the control of the school
debt. She surmised that there was unissued debt of $271
million in the general obligation bonds in the
affordability analysis from January 2016. Mr. Mitchell
replied in the affirmative.
Co-Chair MacKinnon wondered if there was other debt that
was not on the balance sheet, which would impact the state
credit rating. Mr. Mitchell replied that a slide would
address that issue.
9:19:48 AM
Mr. Mitchell highlighted slide 2, "State Debt Obligations
Outstanding." The slide showed the state's payments from
GF. He noted that there were two errors in the slide, which
should be zero: Knik Arm Crossing and Pension Obligation
Bonds. He continued to discuss the slide:
General Obligation*
Par Amount: $753,800,000
Final Maturity: 2020 -2038
Average Annual Debt Service: $60,000,000
Total Debt Service to Maturity: $800,000,000
Subject to Appropriation (COP/Lease Revenue)
Par Amount: $310,600,000
Final Maturity: 2016 -2033
Average Annual Debt Service: $25,000,000
Total Debt Service to Maturity: $410,000,000
Knik Arm Crossing (subject to appropriation)
Par Amount: $300,000,000
Final Maturity: 2037 or 2038
Average Annual Debt Service: EST. $25,000,000
Total Debt Service to Maturity: $500 million
Pension Obligation Bonds (subject to appropriation)
Par Amount: $5,000,000,000
School Debt Reimbursement **
Par Amount: $895,400,000
Final Maturity: 2034
Average Annual Debt Service: $95,000,000
Total Debt Service to Maturity: $1,100,000,000
Other State Reimbursements (Capital Projects)
Par Amount: $35,800,000
Final Maturity: 2031
Average Annual Debt Service: $4,500,000
Total Debt Service to Maturity: $50,600,000
Vice-Chair Micciche queried the municipal share of the
school debt reimbursement.
9:22:57 AM
AT EASE
9:23:30 AM
RECONVENED
9:23:38 AM
Mr. Mitchell shared that the total outstanding state debt
was $898 million. The community share was approximately
$400 million.
Vice-Chair Micciche queried the potential increased risk to
the state with the $400 million. Mr. Mitchell replied that
there had been a proration in support of the program in the
past. He furthered that the program had been modified over
time. He stressed that the communities would have a
difficult time funding.
Vice-Chair Micciche surmised that the state had ultimate
responsibility for the school debt. Mr. Mitchell responded
that the state had an agreement to fund a portion of the
debt service, so there was no additional commitment.
Co-Chair MacKinnon noted that Anchorage carried 50 percent
of the school debt. She remarked that it made a difference
whether the debt was carried at a higher than the current
interest rate. She noted that, under the previous
administration, Anchorage carried a higher percentage debt
load. She understood that Anchorage was encouraged to
refinance their debt, so the state's debt service would be
lower. She announced that Anchorage did not refinance. She
wondered whether the administration would consider reducing
the payments from the state. She queried a proposed
statute, which would work in the state's best interest. She
understood that there was a cost to the communities to
refinance debt.
Co-Chair Kelly asked for a restatement.
Co-Chair MacKinnon restated her question. She compared the
debt refinancing to refinancing a mortgage.
9:30:53 AM
Co-Chair Kelly wondered if the loans could be refinanced at
a lower rate by the communities. Mr. Mitchell replied that
issuing bonds required a ten-year par call. At the tenth
year, refinancing was available. He stressed that
refinancing was not available before than ten-year mark,
unless there was advanced refunding under the tax code
during the life of the bond issue. He remarked that
advanced refunding allowed for the money to be put in an
escrow account that paid the interest expense on the
callable bonds. At the sixth year, the bonds become
callable, so there was a defeasement.
9:35:11 AM
Senator Bishop noted that the state only carried 70
percent, and the community percentage never showed on the
state balance sheet. Mr. Mitchell agreed.
Co-Chair MacKinnon looked at the asterisk on the General
Obligation portion of the slide. She shared that she had
received an email that stated that the administration was
ready to move forward with issuing debt of $271 million.
She queried the number of consideration by the
administration. Mr. Mitchell replied that the state had a
$155 million bond anticipation note that would mature on
March 18, 2016. He explained that the administration was
looking to issue a bond of $151 million of GO bonds in
early March to refinance the bond anticipation note.
Co-Chair MacKinnon understood that there was a cash call
due. Mr. Mitchell agreed.
Co-Chair MacKinnon did not know the cash call, but assumed
it was for the transportation package. She queried the
reasoning for one-year bonds, with available assets. Mr.
Mitchell replied that the bond were used, because they were
authorized by the legislature and the voters in 2012. He
furthered that bond notes had been issued annually since
2013. He announced that there had not been the level of
spending that was initially projected.
Co-Chair MacKinnon wondered if there was $151 million cash
flow for bonds. She shared that some of the bond packages
only funded design. She questioned the utilization of debt
for projects that may not come to fruition.
9:40:24 AM
AT EASE
9:41:25 AM
RECONVENED
9:42:17 AM
Co-Chair Kelly offered a prayer for a sick staffer in the
building.
Mr. Mitchell shared that the $151 million was to refinance
the 2015 bond anticipation notes. The project expenditures
that had been made to date were approximately $130 million.
He stated that the forecast had historically included DOT
and DCCED, which fully utilized the $180 million generated
by the prior sales in the fiscal year. He remarked that the
bond anticipation note program there was no anticipation of
issuing additional obligations, until all the current funds
were expended. The accounting system was currently
inefficient, so the issuing of new bonds would require
extra work from the administration. There was a hope to
minimize the "footprint." He shared that, historically the
state had earned more from the money held than were paid in
interest expense; because of the short position. There was
a net interest cost in the first year of approximately 9
basis point; second year was almost 10 basis points; and
the third year was 15 basis points. The payments were
extraordinarily low rates, which was reinvested in the
short-term pool in the Treasury Division. He stressed that
issuing $200 million of long-dated debt would earn the
state 40 basis points, but there would be negative carry on
the construction fund. He stressed that the money in the
bank should only be there out of necessity.
Co-Chair MacKinnon felt that the rating agency would see
that this was normal business procedure, and no new debt.
Rather the debt was reforming in a way that was most
efficient for the state. Mr. Mitchell agreed.
9:45:52 AM
Mr. Mitchell looked at slide 3, "General Obligation bonds
Current Financings":
Recent Activity:
To date, $182 million of the State's 2012 GO bond
authorization ($453.2 million) has been funded through
Bond Anticipation Notes (BANs) in 2013, 2014, and 2015
Average interest rate on Bans has been just over
1/10 of a percent
The State has amortized $19.3 million to date
2015 BAN repaid 2014 BAN with no new money
Cash flow on projects has been slower than
projected
Co-Chair MacKinnon noted that any debt that the state does
not incur should be considered a good thing. She felt that
the administration was using debt in a proper manner.
Mr. Mitchell discussed slide 4, "State Debt Obligations
Authorized But Unissued":
Known/anticipated Bond Issues
March 2016 -Approximately $150 million of general
obligation bonds to refinance 2015 Bond
Anticipation Note
Next six months -Up to $150 million of Bond
Anticipation Notes to fund projects authorized by
the 2012 Transportation Act
Next six months -Refinance the balance of the
Matanuska Susitna Borough Goose Creek
Correctional Facility Lease Revenue Bonds for
savings. The general fund pays 100 percent of the
debt service on these bonds.
9:50:18 AM
Co-Chair MacKinnon queried the reasoning for 20 year mark
for the Knik Arm Crossing. Mr. Mitchell replied that the
20 year mark was in the fiscal note.
Co-Chair MacKinnon wondered whether the bond committee
would make that determination. Mr. Mitchell replied that
the State Bond Committee would make that determination. He
furthered that the legislature had the power to change the
law.
Co-Chair MacKinnon encouraged the State Bond Committee to
consider the current situation and issue the length of term
of the debt that benefits the state in the most
advantageous way.
Mr. Mitchell continued to discuss slide 4. He remarked that
there was an authorization for up to $5 billion of pension
obligation bonds. He remarked that the administration chose
to ensure that the legislature agreed that it was a
reasonable choice. He remarked that a portion of the bonds
for Goose Creek had been refinanced in the previous year.
He stressed that there was no interest in the "belly" of
the curve, so the state chose to do the longer dated
maturities with a sale of 8.5 percent, which exceeded the
targets by two. He remarked that the state may try to
refinance a portion of the debt, with the hope that the
borough would undertake a portion of that debt.
9:54:14 AM
Vice-Chair Micciche wondered if there was a list of
outstanding debt that may be different in statute to bring
down the cost; and addressed unissued debt. Mr. Mitchell
replied that the state's debt program was efficient and
conservative. He stressed that, per availability, people
were efficient within the programs. He noted that there
could be an adjustment to the school debt reimbursement
program, so the state did not rely on sub entities to issue
debt in an advantageous fashion. Rather, the state issue
the debt itself. He noted that the Knik Arm Crossing was
subject to appropriation, subordinate lien, and toll
revenue structure. He hoped to use toll revenue to pay the
bonds to the extent that they were sufficient. He stressed
that there would be an issue in using GO bonds to the
state, because there was federal highway money in the
project which outlined limitations in how to use toll
revenues. He stated that the structure may seem less
efficient that the GO bonds, the structure made sense. He
remarked that there were some prisoners outside the state,
who wanted to move back to Alaska. He stressed that it was
difficult to get voters to approve a prison project, so the
legislature was required to make the decision for the
discreet stand-alone project, Goose Creek. He stressed that
it may have a lesser credit quality, but made sense
overall.
9:57:10 AM
Mr. Mitchell addressed slide 5, "Pension Obligation Bond
Strategy." He felt that there are different ways to
consider pension obligation bonds. He stated that pension
obligation bonds were beneficial at a lower interest,
enhancing the probability for success. He shared that the
bonds were currently at 5 percent interest rate. He
stressed that the pre-funded pension system, which relied
on earnings, informed the decision to drive down the
interest rate. He stressed that the unfunded liability was
at an actuarial rate at 8 percent. He stressed that
refinancing the unfunded liability may lower the interest
rate to 5 percent.
Senator Dunleavy wondered if Mr. Mitchell would take on
similar financing for his home. Mr. Mitchell replied that
he was not a sophisticated investor, so he would be
reluctant to make that move individually.
Senator Dunleavy noted that there had been some wildly "off
the mark predictions and assessments made by experts."
10:02:05 AM
Mr. Mitchell continued to discuss slide 5:
Known/anticipated Bond Issues
March 2016 -Approximately $150 million of general
obligation bonds to refinance 2015 Bond
Anticipation Note
Next six months -Up to $150 million of Bond
Anticipation Notes to fund projects authorized by
the 2012 Transportation Act
Next six months -Refinance the balance of the
Matanuska Susitna Borough Goose Creek
Correctional Facility Lease Revenue Bonds for
savings. The general fund pays 100 percent of the
debt service on these bonds
Mr. Mitchell highlighted slide 6, "State of Alaska -Debt
Capacity." The slide showed the metrics of the debt
capacity.
Co-Chair MacKinnon wondered whether the analysis was based
on FY 15 actuals, FY 16 new revenue dollars, or projected
revenues for FY 17. Mr. Mitchell replied that the slide was
based on the Fall Revenue Sources book for FY 16 and
throughout. He shared that the book included a table
titled, "State Appropriatable Revenue." He remarked that
there were categories of money in the state which was known
as "restricted." He remarked that the money was not
"restricted." The legislature could spend the money, but
chose to put it into savings, because that was the historic
action of the legislature.
Co-Chair Kelly handed the gavel to Co-Chair MacKinnon.
Mr. Mitchell looked at slide 7, "Rating Agency Views -State
of Alaska":
Moody: Aaa (Negative)
Rapid reserve depletion and absence of
diversifying tax revenues or imposing significant
expenditure reductions would be consistent with a
lower rating
Standard and Poor's: AA+ (Negative)
Alaska has sufficient financial resources to
stabilize general fund operations/ uncommonly
large reserves cannot overcome the current
trajectory of fiscal condition/ modest debt
burden, untapped potential sources of tax revenue
Fitch Ratings: AAA (Stable)
Very large reserves providing multiple-times
coverage of debt obligation; downgrade if
sustained revenue decline is not addressed
10:07:15 AM
Co-Chair MacKinnon wondered if other rating agencies looked
at the closed pension plan as a positive rating to the
state. Mr. Mitchell replied in the affirmative.
Co-Chair MacKinnon stressed that the positive financial
perspective was due to the understanding of the liability
and hoping to eliminate that liability. Mr. Mitchell
agreed.
Mr. Mitchell discussed slide 8, "State of Alaska -Historic
Ratings and Issue Timeline; ANS West Coast Spot Price":
February 11, 2014: Rating Agency Update
December 16, 2014: Moody's revises Alaska outlook to
negative after oil price plunge, affirms Aaa GO Rating
December 18, 2014: S and P no action, warns that
Alaska must reduce deficit to keep AAA rating
February 3, 2015: Rating Agency Update
March 10, 2015: Sold Series 2015A GO Bond anticipation
Notes, $155.2 mm
March 24, 2015: Refinanced $100.6 mm of 2009A GO Bonds
for 7.5 percent in PV savings
April 2, 2015: Refinanced $101.9 mm of 2008 Goose
Creek Bonds for 8.56 percent in PV savings
April 13 2015: Teleconferenced to update Moody's,
Fitch, and S and P on Legislative Session
June 26, 2015: Update Call with Fitch
July 9, 2015: Update Call with Moody's
August 7, 2015: Meeting with S and P
August 18, 2015: S and P revised the outlook to
negative from stable affirmed AAA GO Bond Rating
October 21, 2015: Fall 2015 Fiscal and Credit Update
to Rating Agencies
January 6, 2016: S and P lowered its rating to AA+
from AAA on GO Bond Ratings (outlook negative)
Mr. Mitchell highlighted slide 10, "Alaska's Current Budget
Challenges are Unprecedented, But the State's Large
Reserves Provide Time for Developing and Implementing
Sound, Structural Budget Reforms":
Budget realities have appropriately prompted wide
reaching discussions on spending priorities, tax and
revenue policies, use of reserves and distribution of
Permanent Fund dividends
Abundant reserve levels provide the opportunity for
Alaskans to take a deliberate and comprehensive
approach to restructuring the State's public finances
There have been NO suggestions that existing
obligations should in any way be compromised. The
state has always acted in ways that provide positive
assurances to bondholders.
Mr. Mitchell addressed slide 11, "Overview of Moody's State
GO Rating Methodology and Criteria":
Moody's outlines four broad rating factors and 10 sub-
factors in its fundamental analytical framework for
rating U.S. States, each with an assigned weighting
Economy, 20 percent weight
Governance, 30 percent weight
Finances, 30 percent weight
Debt, 20 percent weight
Each of these factors is evaluated using various sub-
factors scored on a scale from 1 (Aaa) to 9(Baa and
Below)
Each sub-factor's value is multiplied by its assigned
weight and then summed to produce a weighted average
score, which is translated to the grid-indicated
rating
The grid-indicated rating is then adjusted up or down
for applied notching considerations
Mr. Mitchell highlighted slide 12, "State of Alaska Moody's
GO Scorecard." He remarked that Moody attempted to "fit
everyone in the same box", which was difficult with Alaska,
because the state was unusual.
Mr. Mitchell explained that the scores were based on a set
of criteria that may not relate directly to Alaska. He
remarked that economy, governance, finance, and debt were
the weighted categories.
10:11:02 AM
Mr. Mitchell looked at slide 13, "Overview of S and P State
GO Rating Methodology and Criteria":
S and P outlines five key rating factors in its
analytical framework for rating U.S. States
Government framework
Financial management
Economy
Budgetary performance
Debt and liability profile
Each of these factors is evaluated using various
metrics scored on a scale from 1 (strongest) to 4
(weakest)
Each metric may have several indicators that are
scored on the same scale and averaged
Ultimately, the scores for the five factors are
averaged with equal weight to arrive at an overall
score which is translated to an indicative credit
level
Mr. Mitchell addressed slide 14, "State of Alaska S and P
GO Scorecard."
Mr. Mitchell looked at slide 15, "Overview of Fitch State
GO Rating Methodology and Criteria":
Fitch outlines four key rating factors in its U.S.
State Government Tax-Supported Rating Criteria
Debt and Other Long-term Liabilities
Economy
Finances
Management and Administration
Fitch does not use a numerical scoring system;
instead, for each rating factor an entity may be
classified as "Above Average," "Average," or "Below
Average" based on a number of different attributes
Fitch does not detail how a final rating is derived
based on how an entity rates in each category
Overall, Fitch's ratings for states' GO debt falls
within the two highest rating categories of AAA or AA,
with a few outliers
Fitch's methodology is more of a traditional rating
approach and allows the rating analysts greater
discretion in assigning relative weights to each
factor depending on issuer specifics
Co-Chair MacKinnon shared that S and P had a concept of
economy, governance, finance, and debt. She encouraged
state to develop a state scorecard, based on combination of
the three rating agencies. She wanted to show Alaskans why
the criteria would be important for the senate to examine.
She stressed that the rating agencies were examining the
unemployment rate; standard income; and other factors in
their rating outcome.
Vice-Chair Micciche looked at slide 12, and asked for more
information about why the state did not use a binding
consensus revenue estimating process. Mr. Mitchell
responded that Alaska did not always fit into the exact
requirements accurately. He stressed that revenue was
classified in a different way in Alaska and outside of
volatility. He stated that UGF may be considered volatile,
but was backfilled with CBR and other reserves. He noted
that there was more money deposited into the CBT than what
was withdrawn.
Vice-Chair Micciche noted that revenue forecasts were
issued twice a year. He felt that there was a common
practice of overestimating the price of oil. He wondered if
the pool was too small in the evaluations of probable price
atmosphere. Mr. Mitchell replied that it was not a binding
forecast. He felt that the legislature's involvement with
the drafting of the revenue forecast book could be a
positive step.
Co-Chair MacKinnon handed the gavel to Co-Chair Kelly.
10:17:33 AM
Senator Dunleavy surmised that the rating agencies did not
set the rates. Mr. Mitchell replied in the affirmative.
Senator Dunleavy wondered if the rates were negotiable. Mr.
Mitchell misunderstood the question. He stressed that the
rating agencies set the credit rating.
Senator Dunleavy wondered if the interest on the final debt
would be negotiable between the state and the debt issuing
institution. Mr. Mitchell replied that the state sold debt,
and was given a credit rating on the debt. The rating was
incorporated into a document, and the investors made a
decision on credit quality. He stressed that there were
various other variables, like the lack of income tax.
Co-Chair MacKinnon queried the current debt capacity. Mr.
Mitchell replied that the established metrics were
considered "best practices." He shared that Puerto Rico had
an extreme debt. He furthered that one must analyze the
issue of taking on more debt that would result in a
negative credit rating.
10:22:01 AM
Co-Chair Kelly queried the bond capacity. Mr. Mitchell
responded that, for purposes of the fall forecast and the
debt affordability analysis, the bond capacity would be
approximately $175 million to $225 million.
Co-Chair MacKinnon looked at page 3 of the "Alaska Public
Debt" (copy on file). She noted that the potential impact
of the Knik Arm Crossing bonds resulted in the "state
exceeding the target debt limit for the category of
borrowing for the next ten years." She stressed that the
committee had zero bond debt capacity based on what was
already authorized. Mr. Mitchell agreed. He furthered that
he had handicapped the Knik Arm Crossing, but felt that
there would be more information soon about that project.
Vice-Chair Micciche wondered why the committee would care
about the credit rating. Mr. Mitchell responded that the
state sold some bonds through the Alaska Municipal Bond
Bank. He stated that a lower rating would result in more
expensive bonds. He stressed the importance of keeping the
costs low to ensure a higher credit score.
Vice-Chair Micciche queried the most important components
of the fiscal gap that required progress in order to
enhance the rating. Mr. Mitchell replied that there must be
an understanding of the true credit rating in the state.
Vice-Chair Micciche wondered if a negative rating would be
used as a tool to control increasing debt. Mr. Mitchell did
not understand the question.
10:28:30 AM
Vice-Chair Micciche remarked that a positive rating may
make debt look attractive. He wondered if the negative
rating may force responsible management without the use of
debt. Mr. Mitchell replied that he would focus on debt.
Senator Bishop wondered how the state used the Grant
Anticipation Revenue Vehicles (GARVEE) Bonds, and how they
were paid. Mr. Mitchell responded that GARVEE bonds were
issued in 2003. He explained that, in some states, a GARVEE
bond could be a revenue pledge with a motor fuel tax back,
which anticipated using federal highway funds in the future
to pay for the obligations with the state match
requirement. He shared that Alaska could not pledge any
revenue, so the state used a general obligation bond. The
general obligation bond was repaid in the Accelerated
Transportation Act. He stated that the investment earnings
on the proceeds were used as the state's match, so the UGH
outlay was ultimately zero. The federal funds were used to
pay all of the debt service on those obligations.
Senator Bishop noted that there was a difference between
spending for services and spending for investments. He
stressed that the state should have a strong economy in
order to preserve the workforce. He shared that the AKLNG
project required the most skilled workers. He encouraged
the committee to continue to fund construction projects.
10:32:46 AM
Senator Dunleavy wondered if the current rating agencies
were rating bonds in the 2007 and 2008 recession. Mr.
Mitchell replied in the affirmative.
Senator Dunleavy commented the country had exceeded $18
trillion debt. He shared that the United States citizens
paid nearly $3 trillion in taxes to "bail out those
outfits." He suggested that people research Puerto Rico,
because some were fleeing Puerto Rico en masse. He felt
that optimism was a positive thing, but should not override
historic realities. He felt that the country had not worked
out the toxic debt. He stressed that someone always paid
for the decisions.
Co-Chair Kelly discussed the following week's schedule.
Co-Chair MacKinnon stated that the Medicaid bills were
still in subcommittee.
ADJOURNMENT
10:36:41 AM
The meeting was adjourned at 10:36 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Presentation: 020416 FY2017 Debt Summary DOR.pdf |
SFIN 2/4/2016 9:00:00 AM |
|
| Debt book 2015-2016 FINAL 1 25 16.pdf |
SFIN 2/4/2016 9:00:00 AM |
SB 139 |
| State Debt Numbers and Ratios - DOR 1.21.16.pdf |
SFIN 2/4/2016 9:00:00 AM |
SB 139 |