ALASKA STATE LEGISLATURE  HOUSE STATE AFFAIRS STANDING COMMITTEE  March 18, 2025 3:19 p.m. DRAFT MEMBERS PRESENT Representative Ashley Carrick, Chair Representative Andi Story, Vice Chair Representative Rebecca Himschoot Representative Ky Holland Representative Sarah Vance Representative Kevin McCabe Representative Elexie Moore MEMBERS ABSENT  All members present COMMITTEE CALENDAR  OVERVIEW(S): 2025 SPRING REVENUE FORECAST - HEARD OVERVIEW(S): 2021 COMPREHENSIVE FISCAL POLICY WORKING GROUP RECOMMENDATIONS - HEARD HOUSE BILL NO. 114 "An Act relating to the Alaska permanent fund; relating to permanent fund dividends; relating to the use of state income from mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments, and bonuses from mineral leases; relating to contributions from permanent fund dividends to the general and permanent funds; and providing for an effective date." - SCHEDULED BUT NOT HEARD PREVIOUS COMMITTEE ACTION  No previous action to record WITNESS REGISTER ALEXI PAINTER, Director Legislative Finance Division Legislative Agencies and Offices Juneau, Alaska POSITION STATEMENT: Gave the 2025 Spring Revenue Forecast overview. JONATHAN KREISS-TOMKINS, Former Representative Sitka, Alaska POSITION STATEMENT: Gave the 2021 Comprehensive Fiscal Policy Working Group Recommendations overview. SENATOR MIKE SHOWER Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Provided comment during the 2021 Comprehensive Fiscal Policy Working Group Recommendations overview. ACTION NARRATIVE 3:19:54 PM CHAIR ASHLEY CARRICK called the House State Affairs Standing Committee meeting to order at 3:19 p.m. Representatives Vance, Holland, Himschoot, Story, and Carrick were present at the call to order. Representatives McCabe and Moore arrived as the meeting was in progress. ^OVERVIEW(S): 2025 Spring Revenue Forecast OVERVIEW(S): 2025 Spring Revenue Forecast  3:21:04 PM CHAIR CARRICK announced that the first order of business would be the 2025 Spring Revenue Forecast. 3:21:22 PM ALEXI PAINTER, Director, Legislative Finance Division, Legislative Agencies and Offices, began the 2025 Spring Revenue Forecast overview via a PowerPoint [hard copy included in the committee file], titled "State of Alaska Fiscal Outlook." Following the title slide, he moved to slide 2, which showed a graph of various revenue streams in the undesignated general fund (UGF) from fiscal year 2014 (FY 14) to FY 25: Petroleum Revenue; Non-Petroleum Revenue; permanent fund dividend (PFD) from the earnings reserve account (ERA); percent of market value (POMV); UGF Agency Ops; Statewide Ops; Capital; and PFDs. He explained he picked FY 2014 because it was the start of Alaska's decline in oil revenue. Within each bar [for each fiscal year] he noted the color coding as follows: dark blue for agency operations; light blue for statewide operations; golden brown for capital budget; and gray for PFDs. The background shows revenue sources. From FY 14 through FY 18, the state averaged deficits of $3 billion annually. There was a combined amount of $16 billion in the constitutional budget reserve (CBR) and the statutory budget reserve (SBR), and by the end of FY 18 those two main accounts dropped to under $2 billion. He noted that in FY 19, the Alaska State Legislature enacted the POMV draw from the permanent fund, shown as purple on the chart. Before that, the PFD came from the ERA before then, shown in red. Since that, the state has had relatively balanced budgets. From FY 19 through FY 25, the state has had a pre-transfer deficit averaging $200 million a year. He offered clarification to Representative McCabe regarding money that would have gone to the PFD but remained in the ERA and the change to a POMV draw in FY 19. 3:26:05 PM MR. PAINTER, in response to Chair Carrick, noted that the capital budget in FY 25 was approximately $330 million UGF after vetoes. For comparison, he noted that the governor's request for FY 26 is $294 million. He recommended looking at the budget "session by session" rather than by year. He commented on the "total picture last year" with a $120 million in supplemental capital projects; this year there is no surplus from the prior year, so the governor's capital budget has $500,000 UGF. 3:28:11 PM MR. PAINTER, in response to questions from Representative Himschoot, said the cost to match federal funds is about $150 million. Approximately 55 percent of the governor's capital budget matches federal funds. He spoke about the federal infrastructure bill, and he explained that statewide operations include debt service for school debt reimbursement or school general obligation bonds and state assistance for retirement, for example. 3:30:10 PM MR. PAINTER, in response to Representative Holland, noted that the division's website offers historical graphs that include statistics with and without inflation. He explained how inflation can take a long time to affect the budget due to multi-year contracts. 3:33:02 PM MR. PAINTER, in response to Representative McCabe, said the division has not been tasked with comparing investment analysis and this is ultimately a policy call for legislators. He talked about not drawing out from investment during down year and "riding those swings." He mentioned investments in private equities compared to the retirement fund and the effects of long-term time horizons with different strategies. He said comparing it to the treasury would be good. 3:38:48 PM MR. PAINTER returned to PowerPoint and proceeded to the next slide, which illustrates the structural budget deficit. He pointed to FY 25 and noted that the legislature had a balanced budget, but oil revenue subsequently dropped by approximately $22 million, and there is no designated source to fill that deficit. The governor has $91.4 million in supplemental requests, which brings the deficit to $172.5 million. The governor proposes to pull that out of the CBR, and the legislature will have to address that. He noted that the governor cannot sign an unbalanced budget; he cannot sign appropriations to the supplemental budget unless the legislature gives him the fund source. For FY 26, the governor's budget illustrates the structural budget deficit. He has a statutory PFD [in the proposed budget], which Mr. Painter said the state has not actually paid out in nearly a decade. He reported that with the governor's budget and the statutory dividend, the deficit is approximately $1.56 billion. He said there is approximately $3 billion in the CBR, so if drawn from there, the legislature would be drawing more than half the CBR to fill the FY 26 deficit. 3:42:19 PM MR. PAINTER, in response to Representative Story, explained the appropriation in FY 25 for the PFD, and specified that additional "energy relief" came out of the FY 24 revenue. Next, in response to Representative Himschoot, he pointed out that other states do not have revenue volatility to the degree that Alaska does because of its reliance on petroleum revenue. He advised that a balance for Alaska would mean a balanced budget with statutory formulas followed. 3:45:53 PM MR. PAINTER, in response to Chair Carrick, answered that the state having a budgeting plan closest to Alaska's, with a savings plan withdrawal to balance the budget, would be North Dakota, which pulls from a permanent fund. He opined that the state was using reserve draws in an unsustainable fashion. 3:46:45 PM MR. PAINTER, in response to Representative Holland, remarked that the governor's long-term fiscal plan, the 10-year plan he submitted with the budget this year, showed essentially no policy changes going forward. He noted that FY 24 ended with a $12-billion budget balance in the CBR and the account cannot be run negative. He explained that some previous governors have tried to have long-term plans to balance the budget. He said one governor had five different scenarios that could address the budget. MR. PAINTER noted that one path would be what the legislature did in 2021, when the Fiscal Plan Working Group was established to produce a plan. He said it developed a framework for what the plan could be, but the legislature did not adopt the plan. He said that this is a policy choice and there were several ways to make the math work with changes to expenditures and revenue. He said that there was a large menu of options and he opined that the Fiscal Plan Working Group was trying to create a framework relative to this. 3:50:31 PM MR. PAINTER proceeded to Slide 4, which offered a different way to visualize the governor's amended budget. He pointed out a visual summary of the sources of UGF revenue and the percent draw from the permanent fund. He noted that the governor has a $1.65-billion deficit, but it is important to note that this is not where the state would end up; the budget number did not include some things that would be added by the end of the year. The biggest of these additions would be school funding. He noted that the governor introduced two bills with a total FY 26 cost of $133.7 million. In the governor's budget, this is not included because fiscal notes are not included in a budget. He explained that last year there were $182 million of additional school funding outside the formula, which was the reason that there was a big decrease in the fiscal summary between FY 25 and FY 26 operating budgets. He said that the governor is proposing something like $133 million with his two bills and HB 69 has an estimated cost of around $275 million. He said that when adding this to the deficit, it would be a larger number. MR. PAINTER remarked that the governor's budget at this point includes three unions that are currently up for renegotiation. He said that $40 million has often been a placeholder for remaining negotiations. He said that the placeholder was made with 3 percent per union. Correctional officers came in at 11 percent, the Mount Edgecumbe Teachers came in at 5.6 percent, and the university 2.75 percent. He said that it was difficult to determine outcomes to negotiations but there will be an increase to the budget, especially considering the near completion of a statewide salary survey. 3:53:35 PM MR. PAINTER, in response to Representative Story, explained reappropriated funds (RAs). He said the source of revenue that primarily goes into this was the RA fund, a fund capitalized into the operating budget and then spent without further appropriation by the Department of Education, he said that capitalization provides the primary funding. He explained that the legislature is often chosen to add additional appropriations in the capital budget; the governor does not have any of those in his budget this year. He mentioned moratoriums that have been placed on reimbursements and fiscal year lapses which render new debt eligibility. MR. PAINTER, in response to additional questioning, commented on the longer term revenue outlook and its implications for the governor's ten-year plan. He demonstrated the revenue over a near decade, FY 26 to FY 34. He said that the PowerPoint showed SOA's POMV revenue on the bottom in blue, the royalties, production tax, other petroleum revenue, and non-petroleum revenue were the bars adding up to the sum of UGF revenue. He said that the last line of the visual summary was FY 26 growing with inflation. He pointed out that through FY 32 the revenue would not keep up with inflation. He anticipated that given any gap during the current fiscal year, there would still be a gap in FY 32 and FY 33. 3:55:29 PM MR. PAINTER remarked that in FY 34, there is indication that revenue may start to overtake inflation slightly because of expectations of new fields coming online at slightly higher prices, but it would still be close to the inflation line. He said that when building a fiscal plan, one thing that is often ascertained is that if a budget is balanced in the current year, then it is often balanced in the future. 3:56:56 PM MR. PAINTER, in response to questions from Representative McCabe, said school bond debt reimbursement programs would either be 40 or 50 percent based on the nature of the project. He noted that the Department of Education reviews the projects and could not place bonds on activities that do not qualify as eligible projects. He said that these projects were open-ended obligations with current program structure. MR. PAINTER remarked that current inflation given by an SOA investment advisor was 2.5 percent. 3:59:05 PM MR. PAINTER, in response to questions from Representative Story, said that school bond debt funding was subject to appropriation each year. He said there have been instances where a governor has vetoed a portion of school debt reimbursement but ultimately the legislature ended up repaying the vetoed amounts. He said that things can be "open-ended" because the state cannot pick and choose between school districts. 4:00:43 PM MR. PAINTER, in response to questions from Representative Moore, said that there were a few ways that House and Senate Finance Committees have looked at this. These included potential plans that did not quite balance the state budget but were closer than the governor's plan. He remarked that the Senate Finance Committee asked for budget scenarios that included a dividend with a 25 POMV draw and a $680 base student allocation (BSA). He remarked that a deficit would remain with this BSA but less than the governor's proposal. The committee said that they would have to support new revenue to try to address the difference. He said that the House Finance Committee ran a few scenarios with five different dividends and a $1,000 BSA. He said that only one of the scenarios was successful at balancing a budget. He said that both the House and Senate Finance Committees have not been able to develop a solution since a deficit is evident in both their preferred plans. 4:02:29 PM MR. PAINTER, in response to questions from Representative Vance, remarked that budget focus regarding the BSA has been mostly on the upcoming three years, FY 26 through FY 28. 4:04:38 PM MR. PAINTER, in response to a question from Representative McCabe, noted that a $1,000 BSA increase and a plan to manage leftover capital was one of the scenarios in the House Finance Committee. ^OVERVIEW(S): 2021 Comprehensive Fiscal Policy Working Group Recommendations OVERVIEW(S): 2021 Comprehensive Fiscal Policy Working Group  Recommendations  4:05:12 PM CHAIR CARRICK announced that the final order of business would be the 2021 Comprehensive Fiscal Policy Working Group Recommendations overview. 4:06:27 PM JONATHAN KREISS-TOMKINS, Former Representative, Alaska State Legislature, began the 2021 Comprehensive Fiscal Policy Working Group Recommendations overview via PowerPoint [hard copy included in the committee packet]. He said that the group was born out of one of the many situations of "political brinksmanship" where the government is near shutdown and legislature could not agree to budget solutions. He said that during his tenure at the legislature and time working with the Fiscal Policy Working Group, it was unclear whether the legislature would have a budget by the upcoming fiscal year. He said that in this type of "political crisis," the leaders of the four caucuses at the time agreed that a bipartisan working group would be a good approach at attempting to tackle budgetary issues. He related that the working group comprised eight members - two members from each of the four caucuses, and his role was a "co-facilitator" for the House. MR. KREISS-TOMKINS described Mr. Painter's presentation as a good summary of current situation regarding Alaska's budget. He commended Mr. Painter and the Legislative Finance Division for serving as key parts of the budget delegation process. He said that his goal while in the working group was to be as "math- driven" as possible when addressing the previous and current reality of SOA's budget. He echoed Mr. Painter in saying that the established process for the group was to define a reasonable set of fiscal assumptions and their outcomes. He said that in his experience this was challenging due to often differing opinions amongst legislators due to different baseline fiscal assumptions. MR. KREISS-TOMKINS advised that to speak the same language with regard to solutions, there needs to be a commonly shared definition of the budgetary problem. However, people often use different assumptions in terms of optimism and pessimism given oil forecasts, inflation, or a variety of other factors. He explained that incorrect assumptions are consequential when building projections around a deficit or size of deficit. It took time for the working group to determine a universal set of fiscal assumptions. During his time with the Fiscal Working Group a common set of assumptions was established amongst the group. He said members of the working group then worked with the division to investigate various means to balance the budget. He said that it put each member of the group "in a box with a math problem." He said that various members of the group solved the problem in different ways because of differences in policy priorities. He said it was a balance between leaning heavily on cuts and leaning heavily on revenues. He remarked that comparisons between how members balanced the budget and solved the "math problem" was a very important exercise for future deliberations. He commented that the division has a terrific model for budget simulations for upcoming and future fiscal years. He opined that it was a very constructive tool for any legislator who is serious about a balanced budget. 4:13:53 PM MR. KREISS-TOMKINS emphasized that no one component was supported in isolation. He said he thinks this is the political problem surrounding the budget deficit in Alaska. He explained that "for most legislators, the policy solutions that are on the table are interdependent and conditional on each other." He noted that interdependency and conditionality can be difficult politically and that it was a reason SOA has not been able to pass a fiscal plan in a couple of decades. He remarked that positions that each working group member had on any single provision were understood within the context of a comprehensive solution, which meant that members could not necessarily "cherry pick" [from varying models]. MR. KREISS-TOMKINS remarked that there were a few important structural pieces that needed consideration by group members. These included: a single account permanent fund dividend (PFD) structure; constitutional certainty for the PFD; a new PFD formula rather than the current statutory formula; a healthy capital budget; spending limit reform; necessity of a transitional period to bridge things; and constitutional budget reserve (CBR) reform, specifically the sweep process that happens every year. He said that these were all key pieces that led to an eight-way consensus amongst members, many of whom held different ideological positions on the budget. He said that previous members of the fiscal working group could speak to experiences as well. 4:18:43 PM REPRESENTATIVE MCCABE remarked that there were a couple of things worth considering following Mr. Kreiss-Tomkins testimony. He remarked that when previously working in the group, there were certain things that members unanimously agreed to, and they were included in the report [included in committee file]. He said that these agreements were important given differences in opinion regarding the budget. REPRESENTATIVE MCCABE said that he was insistent on a full PFD, but it rapidly became apparent that he could not hold that position. He said after extensive discussion it was apparent that the entirety of the budget could not be balanced on a single issue. He said that the unanimous conclusions amongst working group members were the important ones. REPRESENTATIVE MCCABE said that he did not even like talking about taxes, yet discussions were held regarding new revenue development and finding a path forward. He said that Mr. Painter provided the working group with five different modeling spreadsheets where inputs could be entered to see how it impacted areas of the budget. He said this is good exercise for anyone interested in the fiscal realities of budgeting. He said he ran around 50-60 different scenarios to evaluate how it impacted the outcome of the budget. He said that truly, once out of the ideological box, it really is just a "math problem." 4:21:11 PM MR. KREISS-TOMKINS, in response to questions from Representative Vance, said that the presentation from Mr. Painter was informative and served as a refresher for the current state budget. He said that it seemed that there were similar elements regarding the budget currently and during his time with the working group. He noted, however, that the politics regarding the PFD may have shifted in previous years. He did not believe that the state's uncertainties would get solved unless some or all the components were enacted. He said then when he interfaced with the budget model, he would pull levers that were often different from other legislators. He said that political compromise was required, especially for structural budget pieces to be in place. He opined that there is no way to create a long-term fiscal stability plan without constitutional amendments, largely because the PFD is fundamentally unsound. He discussed the two-thirds vote required for a constitutional amendment and the bipartisan compromise often required to enact them. 4:27:11 PM SENATOR MIKE SHOWER, Alaska State Legislature, at the invitation of Chair Carrick, emphasized the importance of this "crosstalk." He remarked on previous budgetary discussions with Mr. Kreiss- Tomkins while in working group. He said that the political differences between members fostered long dialogues and collaboration. He said that political members can compromise on policy but not principles and this was important to understand. He said that remaining in an "ideological sandbox" would not solve budgetary problems. SENATOR SHOWER complimented the presentation by Mr. Painter and highlighted challenges of presenting solutions that often involve compromise. He remarked that the changes to the CBR and earnings reserve account (ERA) in previous years suggest that the legislature has been "kicking the can down the road" for over a decade. He said that he cannot see that any legislator could fail to acknowledge that SOA is spending more than it was taking in. He raised concerns to implications to the PFD and state savings if corrections were not made. He talked about challenges involving taxes for revenue generation and striking the right balance to encourage investment. He stated that a stable fiscal environment was imperative for this type of investment. SENATOR SHOWER, in summary, said that to address the budgetary issues, all legislative members would need to "take a hit" to their preferred plan to make the appropriate compromise to address the budget. He said that kicking the can down the road was no longer appropriate regarding the current budget forecasting. 4:33:16 PM CHAIR CARRICK remarked that in 2024, there had been a fiscal retreat for freshman legislators in which Mr. Painter participated. She said that an out-of-state moderator helped foster discussions. She said that in the absence of the former House Special Committee on Ways and Means, the House State Affairs Standing Committee should discuss fiscal policy, especially given many of the committee members' interest in it. 4:34:21 PM MR. KREISS-TOMKINS, in response to Representative Himschoot, said that adding the components required for a healthy budget would require trust, patience, and multi-piece legislative package. He said that collaboration would be required between both legislative bodies and the governor. He talked about coordination and timing with regard to running bills through both bodies and the trust required. He said the structural budget problem reflects a degree of political complexity. MR. KREIS-TOMKINS remarked on involvement during previous budget discussions. He said that the Office of the governor had not been directly involved with the prior working group. However, there was some informal dialogue that occurred with the governor's staff. 4:39:37 PM REPRESENTATIVE MCCABE remarked that he did not recall the governor's office being involved in previous working group discussions. He remarked that timing was important when considering structural components relevant to balancing the budget. He said that political strife can arise when timing was not appropriate. 4:41:24 PM REPRESENTATIVE HIMSCHOOT said that to her understanding, a constitutional change would require the vote of the people. She said that legislative decisions would need to take this into consideration. REPRESENTATIVE MCCABE confirmed this understanding. He discussed previous attempts to constitutionalize the PFD. He said any attempts would be put in front of the people and he believed this was a hang-up for many legislators. He remarked on constituents that want a voice with regard to PFD changes. He concluded by saying that both a constitutional change to a spending cap and the PFD would require a vote of the people. 4:42:52 PM SENATOR SHOWER offered a few points of consideration. The first was that the governor was interested in a plan and seeing what the legislature was able to put in front of him that balanced the budget. Second was that there had been discussions regarding contingency language to add a little more security to budget plans. The third was that a 50/50 dividend was still being discussed. 4:43:44 PM MR. KREISS-TOMKINS, in response to Representative Holland, remarked that there was no silver bullet answer for solving budget issues. He said that trust and collaboration would not involve caucus to caucus disputes, as it would never result in a two-third vote required for a constitutional amendment, and the problem would remain unsolved. He remarked that urgency and crisis have always served as a trigger for action in legislative affairs. MR. KREISS-TOMKINS opined that the ticking time bomb in the state was the two-account structure and the PFD, and they have been problematic for some time. He said that as the stock market approaches correction territory, things become riskier year after year. He raised caution to where the state could have no budget available to operate the state. To him as a private citizen, it was something that would provoke action. He said this type of crisis is not predictable; it is known to exist, with varying odds, but it was not time-specific. 4:49:47 PM REPRESENTATIVE STORY thanked each member of the working group who shared their insights. She asked whether the working group had reviewed indirect expenditure as stated in the working group document [in committee file]. SENATOR SHOWER said that he appreciated the opportunity to speak with the committee regarding budgetary issues, and it was something not often done in both chambers. He said it would likely be the most important thing that can be done in the next couple of years. He remarked on a popular phrase that "the best time to plant a tree was twenty years ago. The next best time is today." He remarked that budgetary solutions can be viewed the same way. He said many legislators were new and acknowledged the issue even without experience at the legislature. He said now may be the time to have all four caucuses engaged in discussions and "all hands-on deck." He remarked on making meaningful changes to the budget for the sake of the kids and grandkids in Alaska. He wanted Alaska youth to inherit a state in which to be proud. REPRESENTATIVE MCCABE responded to a previous question from Representative Story and noted that Senator Hughs had looked at indirect expenditures, and he did not believe that it was done as a group. He said that legislators went through an exercise looking at these expenditures but even given savings, it was not enough to resolve the root problem. He said it is important to question whether a state government funded by the PFD earnings, federal funds, and oil revenues is going to protect Alaska liberties for citizens who have no financial responsibility paying for the programs that they demand. He said that this has been discussed a lot and what was described was "socialism" where the government is responsible for everything and citizens pay nothing. He said that taxpayers may quickly vote out their officials if tax revenue is not spent appropriately. He said the PFD and base student allocation (BSA) address this very issue and the problems associated with financing a government with current funding streams. MR. KREISS-TOMKINS, in response to previous questions from Representative Holland and Representative Story, remarked that the working group had "gotten into the weeds" regarding budget reductions. He said that as former chair of the House Standing Committee on State Affairs, he had run many budget reduction committee bills based on the Legislative Finance [Division's] indirect expenditure report. He recommended that the committee members read that report. He talked about challenges associated with budget reduction measures and said it was more complicated than using a "magic wand." He remarked that when he first arrived in Juneau as a legislator in 2013, there were around $16 billion in the CBR, and when he left, there were under $1 billion in the CBR. He shared Representative Holland's sentiment that the cash was being liquidated due to political impasse. He said that there is a cost to inaction, both long- term and acute. MR. KREISS-TOMKINS noted that his previous involvement with the working group involved collaboration with Miles Baker, the then governor's legislative director. He was not involved on a day- to-day basis but was engaged in the working group processes. 4:59:37 PM CHAIR CARRICK expressed hope that the House Standing Committee on State Affairs could foster collaboration and find common ground while discussing fiscal policy. She mentioned former Representative Carpenter's involvement on the former House Special Committee on Ways and Means and hearing bills that he did not personally support. She said this was the kind of political courage necessary to remediate budget issues in SOA. She remarked that future fiscal policy proposals should come from legislators of both caucuses. She remarked on upcoming bill proposals and her intention to hear as many bills as possible. She opined that there was no single issue more important than addressing the problems associated with SOA's budget. 5:02:24 PM REPRESENTATIVE MCCABE remarked that former Governor Jay Hammond had once said that if the dividend were lost, it would activate the "militant ring of Alaskans." He said that this seemed to be the direction the state was going; however, he specified that "the pain point" would not come until the state dipped into the corpus of the fund. He offered his understanding that former Representative Carpenter shared this sentiment. 5:03:07 PM REPRESENTATIVE VANCE remarked that she hoped that it would not come to this. She said that one necessary step to a solution is recognizing that Alaska has a problem. She said that while it may seem like the legislature was "putting out fires all the time," this one was to be prioritized. She said that looking back at the $20-30 billion the state has "blown through" in the last decade, there was no noticeable improvement to major infrastructure. She echoed that there was in fact a problem associated with inaction, it costs opportunity. She opined that most Alaskans do not realize that most of the state budget comes from the earnings of the permanent fund and as legislators there was a responsibility to communicate this. She discussed the need to "bring the public along" when attempting to pass legislation that would require a two-thirds vote. She reiterated that acknowledgment of budgetary issues was imperative. 5:05:58 PM REPRESENTATIVE HOLLAND said that looking at the executive budget, he was mystified by what was occurring. With help from Mr. Painter, he was able to get some help deciphering how the Executive Budget Act works but also what was not being done by the legislature to fulfill the requirements of the act. He encouraged committee members to familiarize themselves with the Executive Budget Act and noted that it was a "piece of the puzzle." 5:07:09 PM REPRESENTATIVE HIMSCHOOT discussed the capital budget that was illustrated by the Fiscal Policy Working Group and the federal match. She raised concern to many of Alaska's dated assets, including the Fairbanks Pioneer Home, which was in rough shape and ready to be condemned. She said that much of Alaska was stuck in the 1980s. She discussed funding differences for districts in Oregon and compared them to Alaska. She said that capital projects in the state would become more intensive due to aging infrastructure. 5:08:42 PM CHAIR CARRICK acknowledged Representative Himschoot's concerns. She thanked presenters for their insights. 5:09:07 PM ADJOURNMENT  There being no further business before the committee, the House State Affairs Standing Committee meeting was adjourned at 5:09 p.m.