HJR 9-CONST AM: APPROPRIATION/SPENDING LIMIT Number 1420 CO-CHAIR WHITAKER announced that the next order of business would be HOUSE JOINT RESOLUTION NO. 9, Proposing amendments to the Constitution of the State of Alaska relating to an appropriation limit and a spending limit. CO-CHAIR WHITAKER determined that no one in the room or on-line wanted to testify. CO-CHAIR WHITAKER noted for the record that Representative Gruenberg had joined the meeting. Number 1444 CO-CHAIR HAWKER commented that since the committee last discussed HJR 9, he has had many conversations about the structure of the resolution. He said that if this resolution results in a constitutional amendment, it will be one of the legislature's most significant accomplishments. The [Alaska] Constitution is truly the backbone of the way the state operates. The budget is how the government satisfies the needs and priorities of the people of Alaska. CO-CHAIR HAWKER pointed out that the original version of HJR 9 was particularly restrictive. It provided a flat basis for all future appropriations with no escalating provision. Each year, the legislature could raise the amount spent over the base year by 2 percent with a three-quarters vote of the legislature. But then, the next year the legislature would have to go back to the base line and perhaps could increase it 2 percent that year. Under the [original] HJR 9 the legislature could have a 2 percent increase over a base year. The base year would be the current budget, which would be in effect for the next 10 years. Given the inflationary pressures and the desire for economic growth, the original resolution might be too constrictive to maintain a budget, even at the current level. Number 1710 CO-CHAIR HAWKER added that he will not offer specific changes today, but that he and others have considered various means of making HJR 9 more flexible as it caps expenditures. He suggested the committee consider some increments such as: 1 percent increase with a simple majority vote, an additional 2 percent with a two-thirds vote, and perhaps an another 2 percent increase with a three-quarters vote, for a potential total increase of five percent. A three-quarters vote is a huge hurdle, he acknowledged. The stair step concept would retain a very rigid commitment to the people to control expenditures, but it would allow for a reasonable growth of government, particularly in response to things the legislature does not always control. For example, the education budget is formula driven, and the legislature does not have the ability to cut 15 percent across the board. That would not be good policy, he stated. There are other formula programs, such as Medicaid, that the legislature wants to constrain, but it is a billion dollars, and the state has no control over it. He concluded his comments by encouraging the committee to add flexibility to HJR 9 or whatever mechanism is used. Number 1910 CO-CHAIR WHITAKER noted there will be public testimony on HJR 9 tomorrow and next week. With the support of the majority of the members, he said he intends to move HJR 9 out of committee next week. He invited interested people to bring their concerns and comments forward. Number 2006 REPRESENTATIVE GRUENBERG stated that for government to function, there must be sufficient flexibility in a spending limit; he said legislators cannot begin to know what will happen [in the future]. [HJR 9 was held in committee.]