SENATE CONCURRENT RESOLUTION NO. 101 Relating to offsetting the projected annual general fund revenue shortfall through equal appropriations from the constitutional budget reserve fund and the earnings reserve account. This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Green re-convened the meeting. She commented that the State should be considering a variety of methods through which to address its fiscal concerns. This legislation is such a proposal. Co-Chair Wilken, the bill's sponsor, presented a power point presentation titled "Building the Bridge, the Power of Earnings, An alternate Solution" [copy on file]. An editorial titled "Stick with Democracy" [copy on file] from the Anchorage Daily News, dated June 14, 2004 and an email [copy on file] from Governor Walter Hickel were also provided. Co-Chair Wilken mentioned that Governor Frank Murkowski's election campaign focused on the message of "hope." Co-Chair Wilken stated that he campaigned on a message of responsibly developing Alaska to create jobs ? to fill our fiscal gap with money derived from resource development. He is concerned that his message might have been forgotten, as other things have taken priority. Co-Chair Wilken voiced being skeptical that the public would approve a fiscal plan were one presented in the upcoming November general election. His plan would present an alternative plan to bridge the fiscal gap that the State would experience between now and the time when new natural resource revenues become available. It is difficult to accept that there is a fiscal problem when the State is experiencing such things as near-record high employment, the price of North Slope crude oil is hovering around $30 to $40 per barrel, there are high bank deposit levels, and low bankruptcy levels. The people of the State "are pretty content." Therefore it is difficult to expect that people would support changing or understanding the POMV proposal that would provide revenue to the State and would alter the manner in which the Permanent Fund Dividend check would be determined. Co-Chair Wilken commented that the first chart in his presentation, titled "So, where's the problem?" identifies that the FY 05 $7,600,000,000 Total Operating and Capital budget is comprised of $3,010,000,00 in federal funding, $1,260,000,000 of Permanent Fund money for inflation proofing and the Permanent Fund Dividend checks, $937,000,000 in Statutorily restricted money, and $150,000,000 in Trust/Dedicated money that the Legislature could not alter. The chart also denotes a projected Constitutional Budget Reserve (CBR) draw of $372,000,000 based upon an average crude oil price of $28 per barrel. The fiscal gap lies within the $1,960,000,000 general fund component of the budget. The general fund is currently 70 to 80-percent funded by oil and gas revenue. The goal over the next few years is to increase General Fund revenues. Co-Chair Wilken noted that the chart titled "?and what's the problem?" reflects the difference in the General fund revenues and the expenditures for FY 1990 through FY 2006 as well as the projected State spending through FY 2020. The State expends more than it receives in revenues. Co-Chair Wilken stated that the chart titled, "?but things can change quickly, for the good and for the bad" depicts various budget scenarios were the price of North Slope crude oil to range between $12 and $44 per barrel. The higher the price, the more General Fund revenue is received. The FY 05 budget is based on a $28.30 per barrel price forecast and a $372,000,000 budget fiscal gap is projected. Were the price of oil to decrease to $22 per barrel, a $750,000,000 fiscal gap would result. Currently a surplus in revenue is being generated as the price is in the $39 per barrel price range. However, he warned that this price would not continue, as things could change quickly. Co-Chair Wilken continued that things have changed, as the chart titled "?And they have" depicts. • The CBR has been used to fill the fiscal gap • Approximately $5,5 billion has been withdrawn. • The state has deposited $5.6 billion and earned $2 billion in interest. Co-Chair Wilken noted that the chart titled "for example" depicts the CBR balance and CBR draws for FY 94 through FY 04. It states the following. • CBR draw 9 out of 11 years • Average draw $350 million • Current balance $2.1 billion Co-Chair Wilken noted that were the current per barrel price to continue, the projected FY 05 CBR draw would not be required. He cautioned however that the CBR would erode in the future, as the State "does not feed it like we used to." Co-Chair Wilken noted that, as supported by the comments listed on the chart titled "? but Alaska is a resource state", Alaska is a resource State and there are new revenue possibilities. SFC-04 1st SS #4, Side A 02:19 PM Co-Chair Wilken stated that the chart titled "? and a bridge is needed, From today to Development" depicts the FY 05 budget and the projected budget shortfalls that would occur until new revenue resources are generated, beginning in the year 2011, from such things as the completion of the proposed gas pipeline and new oil field developments. How the State would address its budget deficit until that time is the question to which there are a multitude of answers. Co-Chair Wilken stated that some options through which to address the fiscal deficit are depicted in the "Several pots of Money" fact sheet. These would include: reducing State spending; instituting an income tax, a corporate tax, and a sales tax; utilizing the CBR increasing user fees and taxes on such things as tobacco to generate other revenues. He stressed that while these revenue sources would generate some money, it would not be significant enough to support the State's budget. Another source must be generated in the interim, as these sources and the CBR could not adequately support the State's annual budget deficit. Co-Chair Wilken stated that his proposal would involve utilizing $1,500,000,000 in realized earnings of the four billion dollars in unrealized and realized earnings that are available to the Legislature in the Permanent Fund. The CBR is projected to terminate in the year 2009 as depicted in the chart titled, "and why not just the CBR?" Co-Chair Wilken continued that, based on current projections, the CBR would be unavailable to assist in building the bridge to the time when new revenue resources come on line. Referring to the chart titled, "but what if..." he noted that were the Legislature to split "the future fiscal gaps with equal contributions from the Constitutional Budget Reserve and the Earnings Reserve Account," a fiscal bridge could be built that would extend the life of the CBR through the year 2012. This revenue proposal is depicted in the chart titled " ? and we build a bridge". Co-Chair Wilken noted that the Permanent Fund, the Division of Legislative Finance, and the Office of Management and Budget provided the numbers depicted in the charts. Co-Chair Wilken stated that the answer to the question of whether the Earnings Reserve Account could be utilized in this manner is yes, as substantiated on the fact sheet titled, "but can we?" The Earnings Reserve Account, a result of wise investment of our Permanent Fund, has been and is still available to the legislature by a majority vote of 21-11. Co-Chair Wilken noted that an enormous amount of information is available on the Permanent Fund website as depicted in the sheet titled " PF financial projections say?". This information includes such things as that the Fund projects a 7.38 percent return and a realized Earnings Account amount of $740 million in FY 04. The chart depicts that the Legislature, if it so desired, could access approximately four billion dollars from the Permanent Fund in realized and unrealized funds. Co-Chair Wilken voiced being surprised as the number of people who confuse the Earnings of the Permanent Fund with the Principal of the Fund. As denoted on the sheet titled "?our Fund and our Earnings", the Permanent Fund is comprised of "two distinct pots of money:" the Principal of the Fund, valued at $23.5 billion, is protected by the Constitution; however, the Earnings Reserve Account, valued at $1.5 billion, is available to the Legislature by a majority vote. The Principal receives 25-percent of oil revenues, and special deposits could be received from the Earnings Reserve Account. The Earnings Reserve Account is the account from which Permanent Fund Dividends, inflation proofing of the Principal account, and other expenditures are made. While come decry that using the ERA would be a raid on the Permanent Fund, this is not the case. Those people "should know better." His proposal is to utilize the ERA, matched with an equal portion of the CBR, to fund the fiscal deficit until new resource revenues transpire. Co-Chair Wilken read the information on the sheet titled " ? the Earnings Reserve the crown jewel of Alaska's Fiscal Future." • Only Legislature in America deciding how to manage $27 billion for 640,000 people • Every minute, every hour, every day, the world helps build Alaska by o Investing in corporate America o Investing in America's society o Investing in America's future • The Earnings Reserve Account is an abutment to our Bridge to Development. Co-Chair Wilken referred to the chart titled " ? but what about my check if you use the Earnings Reserve?", as it specifies how citizens' PFDs might be affected by addressing the State's fiscal deficit with a 50/50 split from the ERA and the CBR. Based on Permanent Fund financial projections, a $550 million fiscal gap that would be addressed by a $275 million draw from the CBR and a $275 million from the ERA for the next five years: would not reduce the level of the PFD the first year; would decrease it by three dollars the second year; and would serve to decrease one's PFD by $32 the fifth year. The cumulative affect of this would amount to a total five-year decrease of $64. He pointed out that the average CBR draw has been $350 million. Co-Chair Wilken noted that the chart titled " ? how does this compare to the status quo" reflects what the projected amount of the PFD would be in the forthcoming years based on projections. Were $275 million removed from the ERA to support the budget deficit for the next ten years, the FY 2014 dividend would amount to $2,057 as opposed to being $2,177 were the ERA not utilized. Co-Chair Wilken stated that the chart titled " ? and to the suggested POMV method" indicates that, were the proposed Percent of Market Value plan (POMV) adopted, the FY 2009 PFD check would amount to $1,151 rather than $1,889 as proposed in his plan and $1,319 in FY 2014 under the POMV as opposed to $2,057 under his plan. "This is a powerful slide" as were the POMV plan adopted, citizens PFDs would be significantly affected as compared to his 50/50 ERA/CBR proposal. Co-Chair Wilken noted that while a State Income Tax might raise $275 million, the sheet titled "but is this the best way? Let's compare other revenue sources" depicts that it would cost each Alaskan $1,059. A State Sales Tax might raise $275 million at a cost of $1,035 to that same person. Utilizing $275 million from the Earnings Reserve Account would cost that Alaskan $12. These amounts reflect information based on the second year of implementation and Department of Revenue projections for a married person with two children and a $57,000 adjusted gross income. Co-Chair Wilken continued that the chart titled, " ? and what about over time" depicts the cumulative cost to a family of four for these three options through the year FY 2014. The cost in FY 2014 would be $9,531, $9,315, and $1,940 for implementation of an income tax, sales tax, or use of the ERA proposals, respectfully. Co-Chair Wilken stated that the chart titled, "but does this help the CBR" reflects the fact that were only half of the amount of the fiscal deficit funded by the CBR, the CBR's life could be extended almost an additional three years. Total funding of the Fiscal deficit and the 50/50 CBR/ERA split portion impact to the CRB is reflected on this chart. Co-Chair Wilken stated that the effect of removing money from the ERA is depicted in the chart titled " ? and what about the ERA." While it would affect the ERA balance that balance would reflect growth when the projected new resource revenues begin. Co-Chair Wilken read the following information. " ? a brief comparison ?" POMV Method verses Build the Bridge. POMV Method Build the Bridge 1) Amount of PFD 1) Amount of PFD more predictable follows the market 2) More negative 2) Less negative impact on your PFD impact on your PFD 3) Perm Fund principal 3) Perm Fund Principal may be impacted protected 4) Perm Fund draw for 4) Earnings used only state services is if necessary for state automatic services "? let's use it only when we need it ?" • Build the Bridge Plan demands spending accountability because • the Earnings Reserve Account is the people's money and • each legislator must answer to the public on how much was spent from the Earnings Reserve to fund state services. "lets summarize .. The Build the Bridge Plan" • Recognizes Alaska's natural resource potential and opportunity for jobs • Recognizes the power of the Earnings Reserve - the crown jewel of a fiscal plan • Bridges the State of Alaska revenue needs until development can occur • Establishes accountability by forming a spending partnership with all voters " ? and now the challenge to our governor and to the Legislature" • It's time to recognize the power of the Earnings Reserve. • It's time to have the courage, when needed, to use the Earnings Reserve • We're elected to work hard, get smart, and make the right decisions for the people of Alaska, • That's why we're here Co-Chair Wilken concluded his presentation. Senator Dyson asked whether the management plan proposed by the POMV could be incorporated with the revenue stream provided via the 50/50 CBR/ERA proposal. Senator Bunde interjected that the POMV plan would not recognize there being an ERA. Senator Dyson acknowledged that point, but stated that the POMV could provide a revenue stream that could, on some basis, provide a revenue stream that could support the 50/50 CBR/ERA proposal. Co-Chair Wilken asked for further clarification. Senator Dyson stated that a portion of the five-percent income provided by POMV for distribution could be utilized, perhaps to fund the Dividend and/or to support the CBR. He asked that, at some point, the Administration provide a response to this suggestion. Senator Bunde characterized Co-Chair Wilken's proposal as being "thoughtful, logical" and reasonable. He asked how the Legislature might further this proposal. Co-Chair Wilken responded that SCR 101 provides some of this detail. He is willing to compromise and would support any method chosen by the Legislature to further the concept. While he is unsure as to whether the proposal could be placed in law, he wished to provide citizens a method through which to approach the fiscal deficit without having the proposal being subject to the risk of failure as a ballet question. We should not take a chance, and as a Legislature, we should represent our constituents and take the responsibility for addressing the situation. The plan he has proposed is "a viable plan" that would save citizens' money. He declared that "POMV is flawed mechanically and it is flawed at the ballot box as it is not going to pass." Senator Bunde agreed that two messages must be sent: one relating to the Legislature and one to the investment community. He noted that were a plan adopted either in Resolution or in Statute, a forthcoming Legislature could either "abide by that or ignore it." A psychological issue exists regarding spending a large portion of the earnings of the Permanent Fund. The only prevention to change is public and political pressure. The financial market would also desire that a fiscal plan be adopted in this State. "They seem to want something on paper" that would reassure them that "the rules would not change cavalierly." He stated that were the Legislature to support this proposal, the methodology to support it would be furthered. Co-Chair Wilken stated that of the various options available through which to address the budget deficit, use of the ERA would be his first choice. Were that removed from the equation, the other options would move closer to the forefront. However, those options would have more impact on financial and business communities than the plan proposed in SCR 101, as it would eliminate the threat of an income tax, a sales tax, and changes in corporate tax structure. These entities should be reminded that the use of the State's assets would be a better option than "going to their pockets." The Standard &Poors national credit rating analyst's message was that the State is not "judged on what you are going to do," but "on what you have done." Alaska has exceeded other states in terms of its assets and liquid assets, with only the inclusion of the CBR rather than the entire Permanent Fund assets. He stated that when the State's fiscal crisis is addressed, "this place would hum" just as it did in 1999. Senator Bunde understood that regardless of whether a solution to the fiscal situation is addressed via Statute or Resolution, action on the part of the Legislature would speak louder than words. The Legislature must act. Co-Chair Wilken stressed that the State would be faced with a $500 million deficit for several years. Oil must continue at a price of $33.80 per barrel in order for the State to have a balanced budget in FY 05. It is difficult to predict the price of oil in future years. He reiterated that his plan would cost residents less than a one-dollar decrease in their Permanent Fund dividend in FY 06. The Legislature must have the courage to address the issue. Senator Hoffman found the presentation interesting, but noted that some of the "soft points" would include the fact that due to oil price volatility a one billion dollar CBR balance must be maintained. A $2.3 billion budget is flat spending. It is a known consideration that the PERS and TRS obligation would amount to one- third of a billion dollars over the next eleven years. Other expense levels are unknown. He stated that when $270 million was withdrawn from the CBR in FY 02, its balance dipped to almost zero. This could have jeopardized the PFD. The effect on the monies available for PFD would also be an area of concern. Under the current status quo system the Permanent Fund balance in FY 2015 would be $45 billion. He asked regarding the level of the FY 2015 Fund were this proposal adopted. The POMV plan would result in an eight million dollar reduction in the Fund. Another concern would be, as alluded to by Senator Bunde, how to assure the public that the Permanent Fund Dividend would be protected, were this proposal furthered. This is the primary reason that the Legislature has not voted to utilize the ERA to date. Co-Chair Green reminded that there is no guarantee that there would be a PFD payment each year. The payment "is based on performance of the investment fund." If it is a guaranteed payment, it should not be called a Dividend. Senator Hoffman agreed that, while this is true under the current scenario, it would not be true were the POMV plan adopted. Co-Chair Green declared that it would be difficult to declare that there would always be a dividend payment, regardless of what occurs with the Fund. Co-Chair Wilken agreed that Senator Hoffman's CBR concern is valid. Everything being presented today is based on projections. While a lot of negative things could occur, a lot of good things could occur as well. The Permanent Fund balance is expected to be $43 billion in 2014. It should be clarified that the $100 million FY 02 amount referred to by Senator Hoffman, related to realized earnings resulting from three years of negative earnings. It should also be noted that there was, at that time, in excess of $1.1 billion in unrealized earnings. If need be, some of the unrealized earnings could be sold to support the payment of a Dividend. While "there is no guarantee in investments," the investments over time "have been very successful." Senator Hoffman stated that in order to access the ERA Fund, assurance must be provided that the Dividend would be protected. Otherwise, the question would be how many Legislators would provide the required vote. Co-Chair Wilken responded that that might be true, and thereby, access of the ERA might not occur for a few years as the options are reviewed. Senator Hoffman is talking about enshrining the Permanent Fund Dividend in the Constitution. He opined that paying a Dividend Check is not one of the top four priorities of State Government. It would be number five in his view, behind public safety, public health, public education, and transportation. Therefore, he could not support enshrining the payment of a Dividend check in the Constitution. Senator Hoffman responded that State voters should make this decision. Senator B. Stevens agreed, "that the POMV concept as presented, is flawed." Were it exclusively a money management tool it would not be flawed. The Permanent Fund Board of Trustees have supported the POMV proposal for numerous years; however, their position "is solely based on one thing alone", and that is enshrining inflation proofing of the Permanent Fund. Legislators have been convinced to raise spending levels in order to allow inflation proofing to be enshrined. However, "the premise is flawed because the Legislature has never not fully funded inflation proofing of the Permanent Fund under the current formula." The current dilemma is that in order to fund the State's essential services, inflation proofing of the Fund must occur first. "Then you can enshrine the Dividend, and" were any funds left, they could be used to fund other things. This argument is flawed as the AS 37 Statutes "have never been not been fulfilled." He argued that it has been "over-inflation proofed." Now that the State has reached a budgetary point to which some of the Permanent Fund money should be accessed, the Legislature might be required "to break our philosophical positions" by being required to enshrine inflation proofing and the PFD in the Constitution, "even though we have never not done it." He voiced support for Co-Chair Wilken's comment that, were it deemed necessary, the Legislature could access the money in the ERA. The POMV concept approach being presented is flawed. Senator B. Stevens stated that while Co-Chair Wilken has presented another alternative to the problem, the true nature of the problem must be determined. Some opine that the State is "not spending enough money so we need to get to the Dividend; others say that, "we don't have enough money to spend so we have to get to the Dividend." Both of these approaches are incorrect, as the State has more money, in excess reserve, than most governments on the planet. Senator B. Stevens stated that he is one of several fiscal conservatives who view the level of State services as being adequate to the demands presented by the State's citizens. It is common knowledge that aligns with Co-Chair Wilken in support of utilizing the ERA when the time comes, after inflation proofing and funding of the Dividend has occurred. SFC 04, 1st SS #4, Side B 03:07 PM Senator B. Stevens stated that there is money available and such usage would have minimum effect on the Dividend payout. Senator B. Stevens suggested some changes to the presentation. The chart titled "? and a bridge is needed" which depicts the potential Future Oil and Gas revenue based on the Spring 2004 Revenue Forecast, could provide a few alternate scenarios to reflect how significant the fiscal deficit would be, particularly "as projections become more conservative as the years out expand." In addition, the Chart titled " ? and what about the ERA?" should include a projection of the Permanent Fund corpus balance in addition to the ERA balance. Senator Hoffman commented in regards to Senator B. Stevens's claim that the Legislature "has never not inflation proofed and never not" funded a Dividend. Since it would appear that these things would continue to be done, why not allow the people to vote on whether or not to enshrine the Dividend in the Constitution. This would "remove the politics" regarding how to spend the rest of the earnings, as it would eliminate citizens' fear that the Dividend would be negatively affected. Senator B. Stevens stated that Senator Hoffman omitted his comment that in times of excess revenue, the Legislature super-funded the corpus of the Fund. Now is the time to utilize a portion of the ERA to provide public services. Senator Bunde stressed that Alaska's physical resources, being finite, would be gone someday. When that occurred and were the Dividend enshrined in Constitution, the citizens of the State would be required to pay such things as an income tax in order to support it. Demographics project that in ten or fifteen years, the smallest component of the State's population would be the 30 to 50 year olds. This "most productive age group" would be the taxpayers who would be required to support the large group of Dividend recipients. He quoted that "the democracy is doomed when the public realizes they could vote themselves money from the public treasury." That is what enshrinement would do. He hoped that, on the other hand, the State would not resemble "the miser who died with his mattress stuffed full of money." Senator Dyson voiced appreciation for the efforts exerted by Co- Chair Wilken to develop an alternate method through which to address the fiscal gap. Co-Chair Wilken acknowledged his staff person, Sheila Peterson, for her efforts in developing the presentation. Co-Chair Green expressed that public questions regarding this proposal could be directed to Co-Chair Wilken and his staff. Co-Chair Green asked Senator Hoffman to further explain the intention of enshrining the Dividend in the Constitution: specifically whether the intent is to insure that a payment would be made, regardless of the State's fiscal situation or whether the calculation mechanism for the dividend would be enshrined. Senator Hoffman responded that Co-Chair Wilken's presentation reflects that, in 2014, new resource revenues would be deposited into the Fund. Proper management of the Fund would insure continued funding for Dividends. Co-Chair Green understood therefore that the desire is to guarantee the Dividend rather than to establish a formula. CHERYL FRASCA, Director, Office of Management and Budget, stated that while the Administration had a copy of Co-Chair Wilken' presentation, until today, they had not received the benefit of his accompanying narrative. While she could question some aspects of the proposal's "practical application", she noted that she had not been able to confer with the Governor in regards to his perspective. Co-Chair Green requested that Ms. Frasca present her remarks and, at a later date, provide comments from the Governor. Ms. Frasca spoke to her concerns, including: the Administration's desire to retain a one billion dollar CBR balance to provide "some cushion" to the budget were oil prices to drop dramatically whereas Co-Chair Wilken has presented the alternate idea that the ERA be used for this purpose; what would happen were the fiscal deficit to exceed $550 million: would the direction be to impose an additional income source or remove more funds from the CBR or the ERA. This is a concern, as, in forward years, the fiscal deficit would exceed those of the past. Another concern about implementing this proposal as opposed to the POMV is that the POMV model is less volatile in terms of the payout and would be easier to budget. The volatile fund sources through which to address the fiscal deficit under Co- Chair Wilken's proposal would include the stock market and the current volatility of the price of oil. Co-Chair Green asked how the volatility of the price of oil and the stock market differs from the current situation. Ms Frasca responded that while it does not differ from the current situation, it would affect the ability to provide a long-term solution of fiscal stability. Part of the Administration's goal is to develop a mechanism that would "fund future services with stability." Due to wide swings in the stock market and the investments of the Permanent Fund, the current Fund's earnings income payout calculation is not as stable, going forward, as the methodology proposed in POMV. Ms. Frasca noted that another concern evolves around whether flat spending, going forward, is a realistic approach upon which to base future budgetary projections. Ms. Frasca also asked whether, as a manner in which to be accountable to the voters regarding how programs are funded, the intention would be to utilize the ERA as a fund source that could be directly identified as the fund source for new programs that might be developed such a new funding for schools, public safety officers, or transportation. Senator Bunde agreed with Senator B. Stevens that the Permanent Fund Trustees support the POMV concept, as it would provide a mechanism through which to guarantee inflation proofing of the Fund. The only reason that the Legislature would support POMV is that it would provide a predictable revenue source. "The only reason that you would need a predictable revenue source would be that you are going to use that to fund government." On a public policy basis, "it is not critical to the State that Dividends be predictable." While POMV would supply a predictable funding source, it might be a tool that is unacceptable to the public. This brings us back to determining what would be possible, and that would include accessing the ERA. At EASE 3:23 PM / 3:24 PM SENATOR GENE THERRIAULT opined that the Permanent Fund Board of Trustees' support of the POMV is appropriate because insuring that inflation proofing of the Permanent Fund must continue in order to protect its value over time, as it is the appropriate action of their role as fiduciaries of the Fund. Senator Therriault noted that the importance placed on SJR 9 and HJR 3 during the Legislative Session is interesting, as those pieces of legislation are not being discussed anymore. The sponsor of HJR 3 commented that protection of the purchasing power of the Permanent Fund was the paramount thing that the Legislature should protect. When it was pointed out that HJR 3 did not provide protection to such things as the inflation proofing of the Fund, support of the bill diminished. Senator Therriault stated that currently the argument evolves around two things: one is that protection of the PFD is being sought; and secondly, the "growing realization" that the POMV plan is the sensible thing to do as inflation proofing the Fund is the "appropriate" mechanism through which to protect the purchasing power of the Fund. "Unfortunately," these two approaches have become linked together. Nonetheless, he supported the development of a mechanism that would protect the purchasing value of the assets of the Fund as well as providing a predictability "or smoothing affect" of the size of the Dividend in the future as it infuses a substantial amount of money into the economy. Senator Therriault applauded Co-Chair Wilken's efforts in developing an alternative proposal. He has some suggestions to the plan that he would discuss separately with Co-Chair Wilken. He agreed that the Legislature has the ability to access millions of dollars in funding. Co-Chair Green commented that the Legislature "is cursed" because it does not utilize the ERA, which is a viable funding source. Because it does utilize the ERA, an alternate approach would be to implement an income tax. Senator Olson commented that while there are a number of mechanisms being discussed through which to address the fiscal gap, "the reality" is that until the time when the public is guaranteed that the Permanent Fund Dividend is protected, the public would not support a plan. The bill was HELD in Committee.