HOUSE CONCURRENT RESOLUTION NO. 1 Creating the Long Range Financial Planning Commission. SPEAKER GAIL PHILLIPS spoke in support of HCR 1. She noted that the concept of creating a special Long-Range Financial Planning Commission charged with a plan to organize the state's finances was first proposed during the last legislative session. She observed that the State is faced with an unpredictable and declining revenue stream. Speaker Phillips referred to the Cremo plan. She observed that the Cremo plan received extensive consideration by the 1 House Judiciary Committee during the previous session. A House Judiciary Subcommittee recommended that a Long-Range Financial Planning Commission be convened to review and identify anticipated state expenditures, recurring revenue and potential revenue sources, existing reserves, and to investigate implementing forward funding of the budget. Speaker Phillips emphasized that long range financial planning is essential to attain stability of Alaska's financial future. Speaker Phillips outlined changes recommended by Governor Knowles in which she is in agreement: * Change page 3, line 9 (9) from "February 15, 1996 to October 1, 1995; * Increase public representation; and * use in-house staff to reduce fiscal cost. Speaker Phillips explained that the early report date would allow the Governor's office to use the Commission's report to develop the FY 97 budget. She observed that the current version stressed representation by financial experts. She agreed that it would be better for the majority of the Commission's members to be from the public. She noted that in-house financial experts can assist the Commission members. She recommended that a contractor be hired to coordinate the Commission and the work of the Commission. She added that the Commission can be housed in the Anchorage LIO. Co-Chair Foster clarified that members can come from all parts of the State. Speaker Phillips noted that the fiscal note accompanying the Senate companion bill is higher to accommodate travel for public members from across the state. She expressed support for the increased travel allocation. Representative Martin noted that prior administrations and legislatures have reviewed the issues and compiled reports regarding the State's long range fiscal status. He emphasized that no action has been taken by previous legislatures. He urged that action be taken. Representative Brown echoed remarks by Representative Martin in regards to the need for action. She emphasized the use of studies previously compiled to educate the public and legislators. She stressed the need to bring together what is known and produce a consensus or package solution options. She suggested that the work of the Commission focus on finding conclusions or possible solutions. She recommended that a special session meet in the Fall of 1995 to allow action to take place. She stressed that the 2 legislature and executive branch must be actively involved. She asserted that it is time for action. Speaker Phillips agreed that Representative Brown's suggestion for a special session has merit. Co-Chair Foster spoke in support of HCR 1. He noted concerns among constituents in his district. Representative Therriault suggested that cutting and consolidating programs be prioritized over instituting taxes. Speaker Phillips noted that the resolves were not prioritized. She indicated that item (8) would be her number one priority. Representative Therriault suggested that the Department of Revenue's mid case forecast be used as base information. He added that the Department of Education's growth charts should also be used. CHRIS CHRISTENSEN, STAFF COUNSEL, ALASKA COURT SYSTEM noted that the legislative and executive branches are participating in the planning process. He stressed that the judicial branch will be part of the equation in any effort to rationalize state spending and downsize state government. He requested that one seat be made available to a representative from the judicial branch. Representative Martin noted that each Governor as directed by executive order submits a long range plan for the State's well being. He observed that the judicial branch has not been previously involved in this process. He expressed concern that the judiciary branch remain neutral in order to adjudicate disputes regarding any plan. Mr. Christensen stressed that the judicial appointee would probably be a financial expert from the administrative office. He stressed that judges can "wear two hats;" to put administrative interest aside and look at legal issues. Representative Parnell echoed Representative Martin's concern that there is an inherent conflict of interest in having a judicial representative on the Commission. KEVIN RICHIE, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE stated that the Alaska Municipal League strongly supports the long-range fiscal planning process. He noted that stabilization of municipalities and long-range fiscal planning are the Alaska Municipal League's two platform issues. He offered the use of Alaska Municipal League's resources for use by the Commission. 3 In response to a question by Representative Martin, Mr Richie asserted that the Alaska Municipal League supports public involvement. Co-Chair Hanley reiterated that the ground work has been laid. He emphasized that the problem has been identified. There is a gap between recurring revenue and anticipated spending at current levels. He acknowledged that the two ways to close the gap are to cut spending or raise revenues. He noted that there are many options within these tools. He urged that the next step be taken beyond identifying the problem. Representative Kohring accentuated that establishment of a long-range plan is a needed major step forward that will help the legislature to resolve the fiscal crisis and implement stability. He felt that emphasize should be placed on reducing the budget through spending cuts. Co-Chair Hanley noted that Annalee McConnell, Director, Office of Management and Budget, Office of the Governor was present at the meeting. He emphasized that the Office of Management and Budget is willing to work with the Legislature.