HOUSE BILL NO. 284 "An Act making appropriations for the operating and loan program expenses of state government and for certain programs, capitalizing funds, amending appropriations, and making reappropriations; and providing for an effective date." HOUSE BILL NO. 285 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." 8:51:51 AM Co-Chair Thomas reported that the amended operating budget was $31,044,700 in general funds below the governor's amended request; in all funds, $77,683,700 was below the governor's amended request. He thanked the committee for helping to slow the growth of government. The agencies' general fund portion of the budget was 3.4 percent larger than the current year. In total the government was investing $6.272 billion in general funds and $9.49 billion in all funds. Co-Chair Stoltze MOVED to ADOPT proposed committee substitute HB 284 (FIN), Work Draft CS 27-GH2599\T (Bailey 3/13/12) as a working document. There being NO OBJECTION is so ordered. Co-Chair Stoltze MOVED to report CSHB 284(FIN) out of committee with individual recommendations. Representative Gara OBJECTED. He thanked Vice-chair Fairclough and the Governor for discovering federal money to help fund much needed housing for victims of domestic violence. He felt it to be a very positive move. Representative Gara WITHDREW his objection. There being NO further OBJECTION, CSHB 284 (FIN) was REPORTED out of committee with a "do pass" recommendation. Co-Chair Stoltze MOVED to ADOPT proposed committee substitute HB 285 (FIN) CS27-GH2593\I (Bailey 3/13/12) as a working document. There being NO OBJECTION it was so ordered. Co-Chair Stoltze MOVED to report CSHB 285(FIN) out of committee with individual recommendations. Representative Gara OBJECTED. He noted a change to be looked at before the bill hits the floor. Representative Gara WITHDREW his objection. There being NO further OBJECTION, CSHB 285 (FIN) was REPORTED out of committee with a "do pass" recommendation. Representative Doogan expressed his thoughts concerning the budget. He signified that he would be voting against the budget on the floor as he thought it was too much money. He stressed that it was not a criticism of anyone who worked on the budget, but believed the legislators had a responsibility to not do what has always done whenever money was available. He cautioned that the present level of spending was not sustainable. He admitted voting for the budget the last two years for political reasons, but now regrets his action, and, if he had it to do over, would not vote for the budget. He remarked that he did not know what to do about the high costs and acknowledged that inflation, salary increases, and higher costs all contribute inflate the budget. The budget passes with good explanations and reasons, but the result is the budget has risen 7.8 percent per year and the operating budget has nearly doubled in the last ten years. He admitted being unable to see how the high increases can be resolved. Along with the increase in the budget, he pointed out that there needs to be a corresponding level of oil money to meet the growing needs. He was concerned about the time when more money was being spent than was being generated. He applauded the people working on the problem, especially Vice-chair Fairclough. He regretted leaving the legislature with the work not complete. He predicted that the spending was unsustainable and hard times were in the future if spending was not reigned in. He thanked the committee for giving him the opportunity to explain why he was voting against the bill. 9:02:34 AM Representative Joule agreed with many issues brought up by Representative Doogan, but indicated he would vote for the budget. He found it amazing that due to the time constraints of the session, the legislature must deal with the operating budget by the increments requested by the governor. He did not feel the best was being done for the people in the state in a limited 90 day session. He stated that more time was needed and cited the need to return to the 120 day session. He pointed out it was possible to deal with the budget in 90 days if more work was involved during the interim. The Missions and Measures process was in place to help review how well the agencies were using the money being spent. Policy and funding of how the process was conducted will benefit the budget process. He reiterated the need to work harder during the interim on budget items. He thanked the budget subcommittees and his staff for all their work and assistance. 9:07:29 AM Representative Neuman indicated he had been more involved in the budget process over recent years and commended Missions and Measures program. He believed the budget money would help Alaska become more efficient in the future. He pointed out that the cost of government continued to climb while the pipeline was delivering less and less. There are things to like and dislike in the budget, but the budget process was a public process. He stressed the importance of spending money efficiently now to try and help the future when money may not be as readily available. He declared his support for the bill. 9:10:19 AM Co-Chair Stoltze acknowledged the individuals who dealt with the hard parts of the budget: the Department of Health and Social Services, the university, and education. He pointed out that the amount of spending was going up and items were more expensive. He remarked on the responsibility and difficulty in making tough unpopular decisions and acknowledged the internal pressures in the capitol from the public. New bills were also being presented that would increase formula growth. He furthered that the price of oil will not always be high and production was slowing down. He impressed that decisions are daunting especially with large departments, such as the ones Vice-chair Fairclough and Representative Joule had to deal with. Spending will continue to add up. 9:14:50 AM Representative Gara acknowledged that Representative Doogan had been consistent on his views concerning the budget. The political idea in Washington D.C. has been for one party to tear apart anything that another party presents. Although the impasse is seen all the time in politics, he indicated his plan to vote for the budget as he believed it moved the state forward. He remarked that there were parts of the budget he liked and some parts he did not like. He told a story of funding for a health care issue and expressed that there were items in the budget that paid for things that no one with a conscience would take out. It was hard to find major changes without a slash and burn approach. One thing the legislature is unable to do is ask agencies if they were operating efficiently. Only the governor has the ability to perform that task, but efficiency could be one way to get control of the budget. He pointed out that there were some items in the budget that would make situations better and save the state money in the future such as education. He added that an unpopular stand might be to ask wealthy cities to pay for more of their municipal needs instead of asking for state funding. He believed the budget to be a status quo budget. He recognized the future struggle to find exactly where and when to cut the budget. 9:20:58 AM Vice-chair Fairclough gave credit to the Alaska Housing Finance Corporation for discovering a way, in cooperation with the governor's office, to help with housing for individuals affected by domestic violence. Representative Guttenberg mentioned that being involved with the budget process was like wrestling with a giant beast. He signified that each member has a role and responsibility with external and internal pressures, but Alaska was a young state where funding basic needs was still part of the growth process. He likened the growing health care to a giant beast; at some point health care will need to be addressed and dealt with. He thanked the co-chairs and subcommittee chairs for their work. 9:25:38 AM Co-Chair Thomas thanked the committee and the chairs of the subcommittees for their hard work. He asserted that there are many decisions to make, but cuts were needed to prepare for the future shortfall. He thanked David Teal and Amanda Wright and their staff. He also thanked his staff for their assistance. He announced that the operating budget in 1966 was $100,000,000 and stressed the inflation level of the budget which is now at $9.6 billion. He thanked again the administration and all who worked on the budget.