HOUSE FINANCE COMMITTEE April 7, 2000 9:05 A.M. TAPE HFC 00 - 108, Side 1 TAPE HFC 00 - 108, Side 2 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 9:05 a.m. PRESENT Co-Chair Mulder Co-Chair Therriault Representative Foster Vice Chair Bunde Representative Grussendorf Representative Austerman Representative J. Davies Representative Phillips Representative G. Davis Representative Williams Representative Moses was absent from the meeting. SUMMARY HB 441 "An Act making appropriations for the operating expenses of the University of Alaska; making appropriations under art. IX, sec. 17©, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." CSHB 441 (FIN) was REPORTED out of Committee with "no recommendation". HOUSE BILL NO. 441 "An Act making appropriations for the operating expenses of the University of Alaska; making appropriations under art. IX, sec. 17©, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." Vice Chair Bunde MOVED to ADOPT Amendment 1: insert (4) Alaska Community Colleges' Federation of Teachers. There being NO OBJECTION, it was so ordered. Representative J. Davies MOVED to ADOPT Amendment 2: reduce the Constitutional Budget Reserve draw to $34 million dollars. He pointed out that $172 million dollars for the university is already in the operating budget. Co-Chair Mulder OBJECTED and stressed that it would be advantageous to keep the entire amount in the legislation. Representative Grussendorf spoke in support of separating the amounts. He maintained that the intent of the CBR is to fill shortfalls, not to fund operating costs. Co-Chair Mulder explained that the intent of the legislation is to segregate the university and identify it as a separate issue. Representative G. Davis stated that he would support the amendment, but emphasized that he did not want to identify the university as the highest priority. Representative Austerman stated that he had the same concerns, and pointed out that Power Cost Equalization is still an issue. Co-Chair Mulder observed that if the amendment would pass that the bill would probably not move from the Committee. Representative G. Davis asked what is being done on other issues before the Legislature: education, PCE, and labor contracts. Co-Chair Mulder responded that there is an opportunity to look at additional support for K-12 funding in the Conference Committee. He noted that there is funding for PCE in both the House and Senate operating budgets. He noted that discussions are continuing regarding an endowment. He did not know if an endowment would succeed. He added that the size and scope of the labor contracts have yet to be determined in regards to their true monetary costs. He did not know how or when the labor contracts would be addressed, but assumed that the Legislature would be back in special session if the issue is not addressed during the regular session. Representative G. Davis stated that he would oppose the amendment in an effort to allow the legislation to move. Representative Grussendorf spoke in support of the amendment. He emphasized that he supports funding the $34 million dollar increment for the university, but stated that there are too many unknowns to include the total CBR amount. Representative J. Davies acknowledged the intent of the legislation. He felt that insertion of the rest of the CBR draw was premature. He stressed that the legislation would still accomplish separation and support of the university at the $34 million dollar increment level. A roll call vote was taken on the motion to adopt Amendment 2. IN FAVOR: Austerman, Davies, Grussendorf OPPOSED: Phillips, Williams, Bunde, Davis, Foster, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (3-7). Representative J. Davies MOVED to ADOPT Amendment 3: Delete subsection (c), page 4, line 28 - page 5, line 11. He explained that the amendment would delete the measures and maintained that they are redundant. He pointed out that measures were already adopted for the university and are redundant and confusing. Co-Chair Mulder explained that they were included to allow measurements specific to the additional funding that is being invested in the university. He stressed that the measurements highlight the additional investment. Representative J. Davies responded that the House Finance Subcommittee made the assumption that the additional funding would be available. He felt that all of the measures were addressed. He questioned if it would be constitutional to add the measures to an appropriation bill. Co-Chair Mulder observed that legal counsel was contacted and indicated that the language is appropriate. Representative G. Davis spoke in opposition of the amendment. Representative Phillips agreed with the amendment. She emphasized that measures were passed (in SB 281) and maintained that those measures should pertain for perpetuity. Co-Chair Mulder maintained that the two sets of measures are not in conflict. He Pointed out that number (3) requests a careful look at the reduction on nonproductive programs and facilities. The measure asks the university to take a careful look at their system to see those programs and facilities that are not necessarily productive. He observed that there is a two-year window to do a careful analysis and maintained that this would allow them to determine those things that are productive and are meeting their objective. This allows time to identify things that can be streamlined. Representative Grussendorf stressed that legislative findings are not necessary. Co-Chair Mulder maintained that the university would pay close attention to the missions and measures and that they would not be tossed out. Co-Chair Therriault agreed with comments of Co-Chair Mulder. Representative J. Davies stressed that there has not been a policy discussion on the measures contained in the legislation. He emphasized that they may have unintended consequences. He pointed out that the measures included in SB 281 were discussed at length within the Subcommittee and with the university. A roll call vote was taken on the motion to adopt Amendment 4. IN FAVOR: Phillips, Williams, Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (4-6). Representative J. Davies MOVED to ADOPT a conceptual Amendment 4: make sure the importance of continuing the current master's program is emphasized, within the discussions of the 4 year-program. Representative Phillips recommended the deletion of "four- year" and insertion of "baccalaureate". She argued that the four-year degree program is almost nonexistent. Co-Chair Mulder argued in support of retaining "four-year". He stressed that students leave the state to obtain four-year degrees. Vice Chair Bunde noted that not many people complete a four- year degree in four years. Representative J. Davies MOVED to amend Amendment 4: Delete "four-year" and insert "baccalaureate, as well as masters level teacher training programs" on page 4, lines 27 and 12. There being NO OBJECTION, it was so ordered. Co-Chair Therriault MOVED to report CSHB 441 (FIN) out of Committee. Vice Chair Bunde OBJECTED for the purpose of discussion. He expressed concern that the legislation creates a step toward a dedicated fund, and removes the notion that state funding would be reduced in FY01. Representative Austerman observed that he supports funding for the university, but stressed that there are a number of issues that have not been addressed. Representative J. Davies expressed support for university funding, but expressed concern that many issues remain. Representative G. Davis stated that there are a lot of priorities that have not been addressed. Representative Williams stressed that the Committee should be working on a fiscal plan and that the legislation is only part of the puzzle. He suggested that the bill be held and noted that K-12 education and PCE funding still need to be addressed. A roll call vote was taken on the motion to move HB 441. IN FAVOR: Austerman, Bunde, Davies, Davis, Foster, Phillips, Therriault, Mulder OPPOSED: Williams, Grussendorf Representative Moses was absent from the meeting. The MOTION PASSED (8-2). CSHB 441 (FIN) was REPORTED out of Committee with "no recommendation". ADJOURNMENT The meeting was adjourned at 10:30 a.m.