MINUTES SENATE FINANCE COMMITTEE April 26, 1995 9:35 a.m. TAPES SFC-95, #57, Side 1 (000-end) SFC-95, #59, Side 1 (000-528) CALL TO ORDER Senator Rick Halford, Co-chairman, convened the meeting at approximately 9:35 a.m. PRESENT In addition to Co-chairmen Halford and Frank, Senators Phillips, Sharp, and Zharoff were present. Senators Rieger and Donley arrived soon after the meeting began. ALSO ATTENDING: Alison Elgee, Deputy Commissioner, Dept. of Administration; Geron Bruce, Legislative Liaison, Dept. of Fish and Game; Gregg McDonald, Public Safety Employees Association; Susan Taylor, fiscal analyst, Legislative Finance Division; and aides to committee members and other members of the legislature. SUMMARY INFORMATION SB 77 - INTENSIVE MANAGEMENT OF GAME Discussion was had with Geron Bruce of the Dept. of Fish and Game. An amendment by Senator Rieger changing "has occurred" to "exists" at page 2, line 30 was adopted. CSSB 77 (Fin) was then REPORTED OUT of committee with a $10.0 fiscal note from the Dept. of Fish and Game. SB 152 - GEOGRAPHIC PAY DIFFERENTIALS Discussion was had with Alison Elgee of the Dept. of Administration. An amendment by Senator Donley changing the differential for state employees in Seattle from "0" to "-10" was adopted. Senator Rieger noted need for the drafter to adjust percentage language at page 2, line 26, to include both "above" and "below" in accordance with the foregoing amendment. Senator Donley moved for passage of the bill, but Co-chairman Frank advised it would be held in committee for further review. SENATE BILL NO. 77 An Act relating to intensive management of identified big game prey populations. Co-chairman Halford directed that SB 77 be brought on for discussion. Senator Sharp, sponsor of the legislation, said that the bill contains cleanup provisions for last year's SB 77. New legislation was introduced because several factions are having difficulty understanding the mandate of the previous legislation. He then commenced the following sectional review: Sec. 1. Contains findings already set forth in statute. Sec. 2. Adds item (4) at page 2, and states that the Commissioner shall cooperate with and assist the board of fisheries and the board of game by implementing regulations requested by either board. This provision was added because of recent court decisions ruling that the Commissioner cannot void quotas set by the board. It thus places in statute the recent court ruling. Sec. 3. Removes old language mandating that state fish and game divisions cooperate with and assist the federal government in enforcement of federal fish and wildlife laws and regulations. At this point in time, that mandate is onerous. New language mandates that the department cooperate with the state board of fisheries and board of game. Sec. 4. Deletes the Commissioner's option of establishing a division of game within the Dept. of Fish and Game. Sec. 5. States that the division shall be the division of game and sets forth the duties. This returns to the status quo prior to six or seven years ago when nomenclature for the division was changed to the division of wildlife conservation. Sec. 6. Clarifies language adopted by the Eighteenth Legislature. Department personnel are having difficulty understanding what the statute says. It addresses the point at which depletion is calculated and establishes the benchmark as "historic high levels." Anything below that represents depletion. Sec. 7. Clarifies that intensive management does not include management of people. The department appears to have a difficult time with that concept. Intensive management refers to management of game. Sec. 8. Adds paragraphs relating to harvestable surplus and defines the meaning. Senator Sharp noted difficulties at recent board meetings in matching individual personal philosophies with what the statutes say. Subsection (4) defines the term "high level of human harvest" to a quantifying element (1/3 or more) that is easily understandable. Sec. 9. Adds a new section which strengthens legislative intent in statutes by establish a quantitative target to better focus management goals at the 50/50 level. That is the high level. Nothing mandates that it be achieved. It says that once parameters "get down to a third of the harvestable surplus taken by human harvest, they should consider implementing intensive management, if it appears feasible and achievable by scientific studies, and try to work up toward the 50/50 replacement." The allocation at this time is 87/3. That is out of balance "between four legged critters and two legged critters." That has resulted from years of passive management and no intensive management to control the element currently taking the 87%. At the December meeting, the assistant attorney general had no problem understanding and articulating what previous SB 77 meant. The issue is still not understandable to department personnel. Personnel should move forward to aggressively manage game as outlined by the attorney general's recommendation. Senator Sharp stressed that the resource belongs to the people of Alaska. It is a valuable resource if managed correctly. An abundance creates greater accessibility and availability to utilize the resource. Senator Randy Phillips referenced the last two sentences of the legislation. They indicate that in instances of disagreement between the commissioner and the board, the decision of the governor is final. He then commented that since the commissioner is appointed by the governor, the two are likely to be of the same opinion. Co-chairman Halford advised that the governor is ultimately in control. Language in the bill places the authority and responsibility "clearly where it really is . . . ." Senator Phillips voiced his belief that the final decision should rest with the board of game since that entity is charged with responsibility for managing the resource. Decisions concerning the resource should be based on data rather than politics. Senator Rieger referenced the chart indicating current harvest levels of 87/3, in terms of predator and human takings. Language within the bill speaks to one-third harvest by humans--a ten fold increase in human harvest of game. He then asked if that number should realistically be set in statute. Senator Sharp referenced escape hatches set forth in Sec. 6 and noted, specific, avoidance in all areas North of the Yukon River. Senator Rieger questioned whether, because of the radical change, the board would rely on escape provisions, and management would not achieve the goals of the legislation. He suggested a more moderate enhancement of human harvest might be more easily triggered. Senator Sharp advised that on the vast majority of state land where the law will be applicable, where one-third or less harvest of the harvestable surplus is taken by humans, the department must evaluate the situation. Further discussion of effective management of certain areas followed. Senator Zharoff asked if the department had developed regulations and implemented last year's legislation. Senator Sharp indicated that the board commenced a familiarization review last November and December. Extensive further discussion was had at the March meeting, and implementation of intensive management was designated for two areas where residents have been concerned about low population levels. Discussion of the term "harvestable surplus" followed between Senator Zharoff and Senator Sharp. Senator Zharoff questioned the advisability of managing via legislation, indicating that it removes much flexibility for making mid-season adjustments, etc. He suggested that ability to correct problems as the season progresses is much better under the current system. Ability to pull the board together to make emergency decisions, if necessary, will be difficult to attain. Senator Sharp attested to difficulties associated with attempts to implement predator control programs. He further suggested that Senator Zharoff was viewing wildlife management from the viewpoint of commercial fishing which has been "very successful in managing for abundance." Management of game has been dismal. It is time for the state to either save its money and let nature take her course or commence game management for abundance. Senator Zharoff advised that every time the department develops a predator control program, the methods are not acceptable, and the program draws both in-state and national opposition. Senator Rieger directed attention to page 2, line 30, and MOVED to change "has occurred" to "exists." He noted that "has occurred" references something that may have occurred in the past but may no longer exist. "Exists" indicates that that is the situation at the time the board is considering depletion from historic levels. The sponsor said he had no problem with the change. No objection having been raised, the AMENDMENT was ADOPTED. GERON BRUCE, Legislative Liaison, Alaska Dept. of Fish and Game, came before committee. He attested to need for in- season flexibility compared to a pre-season goal. The department is concerned by definitions which place specific numerical goals in statute. That reduces department ability to respond to variations. Referencing prior comparison of commercial fishery management with that of game, Mr. Bruce stressed that the success of fishery management has hinged on flexibility to make in-season adjustments based on observations of abundance and other factors as they occur. That contrasts with the federal system which set pre-season goals and locked managers into those goals regardless of what was actually observed in season. The more flexible route has been the approach taken since statehood in management of all state fisheries. That has produced tremendous success. Speaking to allocations, Mr. Bruce reminded members that even in times of great fishery abundance, there are "raging fisheries allocation conflicts." That highlights the fact that the state cannot achieve a level of production in fish and wildlife that will eliminate or reduce allocation conflicts. There will be disputes among individuals about what is the highest and best use of resources. Co-chairman Halford pointed out that there is no commercial harvest of game. That is a major component. As use of game became an issue across the nation, market hunting was the first thing to go. There is thus a significant difference between fish and game resources. Conflicts will continue to exist. Senator Rieger voiced his understanding that under amended language within the bill a reduction in stock of a certain game triggers intensive management. Once historic high levels are again achieved, the state can lift itself out of intensive management. It does not have to go all the way to the one-third human harvest level. The numerical quota may never be fully achieved. Mr. Bruce voiced department concern that figures for historic high yields reflect numbers from a time during which the department does not have the same level of confidence as it does for current numbers. Those levels were achieved after extensive predator control involving the use of poison. It may be difficult to re-create that effort. Mr. Bruce advised of department support for predator control and attempts to conduct predator control where prey populations were in "the predator pit." Those efforts met with "tremendous opposition" and were subsequently discontinued. The department remains committed to predator control and recognizes that it is one of the valid tools for use in wildlife management. During recent meetings, the board of game identified 35,000 square miles in the interior in which predator control would be appropriate. These are areas of major human harvest along the roadside where major problems exist. Mr. Bruce stressed that members keep in mind the state's population growth and how it has impacted hunting opportunities, particularly along the road system. Co-chairman Halford noted that the most effective form of wolf control is pack elimination. That involves helicopters and biologists and elimination of the entire pack so there are no remaining reproducing pairs. That approach is totally unacceptable to both the environmental community and "all of our friends with Super Cubs who want to go out and wolf hunt." They cannot stand the thought of state employees participating in predator control "when they can't do it." The department is thus stuck with alternatives that do not work very well. Senator Sharp concurred that predator control is not effective when the size of the pack is reduced rather than eliminated. The pack is generally back to full or greater strength within three years or fragmentation has occurred and several packs have formed. Senator Sharp referenced earlier comparison of management of the commercial fishery to that of game. He suggested that it is much easier to keep people happy when management has produced an abundance rather than when there is nothing to allocate. Co-chairman Halford noted that the reverse is true for other states that are overpopulated but where game is managed for maximum production. He said that the state of Pennsylvania provides more pounds of big game for human harvest than Alaska. Senator Sharp spoke to need to zero the fiscal note for the bill, saying that there is sufficient money in the department's $900.0 budget to cover the cost. Geron Bruce asked that the note not be eliminated. He explained that the purpose of the note is to identify costs associated with the new program and new initiative. If the note does not accompany the bill, the only way the department could move ahead with the program would be to discontinue some other function and reprogram the funds. End: SFC-95, #57, Side 1 Begin: SFC-95, #59, Side 1 In further discussion of the fiscal note, Senator Sharp advised that he would not delete the negligible note at this time. He stressed need to ensure that the note does not set a pattern for future budget additions until results are known. Senator Rieger asked if the underlying issue behind the bill is that the department has utilized bag limits, harvest seasons, and human consumption limits as the method of game management to the exclusion of management forms. He then asked if the bill could be simplified to require that management of a game stock must not reduce human harvest by a greater percentage than the reduction of predator harvest. All consumptive uses other than natural causes would thus be on equal ground and share in the burden. That would eliminate discriminatory treatment of one form of consumption over another. Senator Sharp said he would have no problem with that approach were the human harvest at a recognizable point. Since human harvest is only 2.5 or 3% and other takings total 87%, there is no equity. Passive management over the last twenty years has resulted in a reallocation of resources away from humans to predators. Without predator control, that is what happens. The Senator questioned who game resources are being managed for. Discussion followed between Senator Phillips and Mr. Bruce regarding the transplant of Canadian wolves into Yellowstone National Park. Mr. Bruce advised that while Alaska offered to provide wolves for the transplant, the U.S. Fish and Wildlife service wanted stock that was genetically closer to what was native to the area. The department does not believe there is a significant difference between Canadian and Alaskan wolves. The offer to provide transplant stock remains open. Senator Sharp noted that department biologists are acknowledged worldwide as experts on what should be done to control wolves. Of the 35 or 36 wolves captured in British Columbia, 31 or 32 were captured by Alaskan biologists. In response to a question from Senator Phillips regarding the possibility of transplants to other states, Mr. Bruce noted that as attractive as export is, it is not a realistic option in achieving a balance between predators and prey. It will not solve the existing problem. Senator Sharp MOVED for passage of CSSB 77 (Fin) with individual recommendations and the accompanying $10.0 fiscal note. Senator Zharoff OBJECTED. CSSB 77 (Fin) was REPORTED OUT of committee on a show of hands evidencing five in support of passage, one no vote, and one abstention. The $10.0 fiscal note from the Dept. of Fish and Game accompanied the bill. Co-chairmen Halford and Frank and Senators Donley and Sharp signed the committee report with a "do pass" recommendation. Senators Phillips, Rieger, and Zharoff signed "no recommendation." SENATE BILL NO. 152 An Act relating to geographic differentials for the salaries of certain state employees who are not members of a collective bargaining unit; relating to periodic salary surveys and preparation of an annual pay schedule regarding certain state employees; relating to certain state aid calculations based on geographic differentials for state employee salaries; and providing for an effective date. Co-chairman Halford directed that SB 152 be brought on for discussion. ALISON ELGEE, Deputy Director, Dept. of Administration, came before committee to speak to the bill. She explained that the legislation was introduced to amend the statutory geographic differential that covers non- covered employees of the executive branch and the legislature. The existing differential has been in statute since 1972. The majority of the state's union contracts contain differentials amended on the basis of a 1985 study. However, differentials for non-covered employees were not brought current. The proposed bill also establishes $30.0 as the limit of total compensation to which the differential would apply. That threshold would be annualized throughout the year rather than applied to the first few months of the year and then shut off. The legislation also amends current requirements for annual salary and cost of living surveys to require the conduct of a cost of living survey every five years, subject to appropriation. These surveys are extraordinarily expensive if conducted in the same manner as the 1985 study. That survey cost $375.0. No funding has been provided to conduct a comparable survey since that time. The proposal for transition of employees from the old index to the new involves a twelve-month freeze for current salaries. Portions of the proposed bill relate to other statutory sections such as revenue sharing which has traditionally been tied to the old geographic differential. Bill provisions maintain the historical tie for those programs. Amendments contained within the legislation would thus not impact anything but the employee salary base. Ms. Elgee directed attention to a spread sheet (copy attached to these minutes) and explained that the column entitled "1972 index" shows the current differential applied to non-covered employees. The next column displays the union differential in place since 1986. The column entitled "Runzheimer" evidences the result of a study conducted by the Dept. of Administration last fall. There was limited funding for the review and results "look a little weird." The department has thus not relied on the study in establishing the proposal in pending legislation, except to the degree that it demonstrates that the cost of living in Alaska has come down significantly. The proposal in SB 150 represents a broad-band approach that looks at geographic similarities, the type of transportation available to areas, and, in a few cases, other cost of living information. As an example, Ms. Elgee noted that because of its size, Fairbanks is showing up on national studies. Those studies indicate a cost of living in Fairbanks similar to that in Anchorage. Ms. Elgee acknowledged questions concerning applicability of the legislation to the university and the court system. The university has already eliminated the differential for Fairbanks, effective in January. At the time that was done, the university indicated interest in revising the differential for other parts of the state but was awaiting the administration's proposal for those areas. The court system has traditionally followed the statutory differential. Referencing the spread sheet, Senator Zharoff noted an increase from 0.791 to 1.0 for employees stationed in Seattle. Ms. Elgee explained that national surveys indicate that the cost of living in Seattle is comparable to Anchorage. Senator Phillips suggested that lack of sales tax in Anchorage and a sizable tax in Washington causes the cost of living to appear similar. Senator Sharp voiced his understanding that the legislation proposes to increase the pay for Seattle-based employees by 21% on the first $30.0. Ms. Elgee responded that it would bring them up to the same base as Anchorage employees. The state presently has six employees in Seattle. Senator Donley asked how the bill might be modified so that Seattle employees maintain the status quo. Ms. Elgee recommended that if the committee modifies pay for Seattle employees, it "go to the union differential which is currently 0.870% of the base. The 1972 index is 0.791%. Senator Donley referenced page 3, line 1, and MOVED to maintain Seattle employees at their present level. In response to an inquiry from Co-chairman Halford, Ms. Elgee explained that in order to retain current levels of pay for employees in Seattle, the bill would have to reflect a percentage below the basic salary schedule. Senator Donley then MOVED to change the zero for Washington State to -10 at page 3, line 1. No objection having been raised, the motion CARRIED and the AMENDMENT was ADOPTED. Co-chairman Halford also noted need to conform percentage language at page 2, line 26, to conform to the minus number. He suggested that language read "Percentage Above or Below" rather than merely "Percentage Above." No objection having been raised, the CONFORMING AMENDMENT was ADOPTED. Senator Zharoff asked how the proposed bill would impact Alaska's foreign offices. Ms. Elgee advised that the bill makes no change for Alaska employees in foreign countries. She noted that the director of personnel would be establishing salaries for Alaska employees outside the State of Washington. Problems have arisen concerning Alaska employees in Washington, D.C., which has a substantially different cost of living. The administration thus suggests that these employees be treated similar to those in foreign offices. Discussion of the Runzheimer study followed between Senator Phillips and Ms. Elgee. Senator Zharoff asked what impact the proposed bill would have in terms of getting people to serve in rural Alaska. Ms. Elgee acknowledged that the department anticipates a combination of effects. She attested to past criticism regarding "very high differentials in rural Alaska" that make service in rural areas so attractive that people are recruited from Anchorage and Fairbanks when jobs could be made available to local residents. At the same time, there sometimes are no local residents to fill specific professional qualifications. The administration will have to explore other options (advanced step placement) to encourage individuals to accept jobs in rural Alaska. The department does not feel the geographic differential should be utilized to solve recruitment difficulties. As an example of operation of the proposed legislation, Senator Sharp cited a road grader operator in Fairbanks making $40.0 a year and asked if the new index would reduce his pay by $6.0. Ms. Elgee explained that the salary schedule is set as a base salary schedule. It is then adjusted relative to recognition of an area cost of living differential. All road grader operators throughout the state start with the same basic level of pay. She then acknowledged that the operator in Fairbanks would experience the above-noted reduction. That impact, however, would be implemented one year from the effective date of the legislation to give employees adequate notice of the change. Senator Sharp remarked that the reduction would require considerable adjustment for someone with mortgage payments and other financial obligations. Co-chairman Halford voiced his understanding that the bill addresses two issues: 1. The first limits the geographic pay differential to the first $30.0. 2. The second adjusts the schedule. He then suggested the changes would entail a less significant adjustment for individuals at lower pay scales if the existing schedule remains in place for a couple of years, the $30.0 threshold is held harmless for three years, and the schedule change is thereafter adopted. Ms. Elgee advised that Sec. 8 of the bill contains the twelve-month transition period. Should the committee wish a longer period to mitigate impact on employees, that is the section that should be amended. Co-chairman Halford suggested that changing July 1, 1996, to July 1, 1997, would extend the period one year. In response to a question from Co-chairman Frank, Ms. Elgee advised that the legislation proposes that the differential apply only to that portion ($30.0) of the salary that actually "goes to cost of living instead of to the entire salary of the individual as in the past." Co-chairman Frank questioned the fact that the current differential for Valdez is greater than for interior villages and suggested that the two do not deserve the same differential. Ms. Elgee concurred. She added that if the committee is interested in splitting election districts, that could be done at page 2. line 30, by excepting Valdez and Cordova from the listing of districts 34, 35, and 36. Valdez and Cordova could then be included within districts at line 29. Past geographic differential schedules have been written in that fashion. Co-chairman Frank voiced reluctance to do so without review of supporting data for both existing and suggested differentials. Senator Sharp noted a similar problem for Delta. In response to further concerns, Ms. Elgee advised that rural state employees are primarily located in regional centers. In response to a question from Senator Zharoff, Ms. Elgee explained that the legislation impacts non-covered employees in the executive branch including the Dept. of Law, Office of the Governor, Public Defender, Office of Public Advocacy, Pioneer Home Administrators, and AHFC rural housing offices. Senator Phillips asked if there was a difference between union coverage and that proposed for non-union employees. Ms. Elgee responded affirmatively. She added that the recent ASEA agreement contains a reopener clause that would be triggered by passage of the legislation. Senator Phillips voiced a preference for treating all employees the same. In response to a further question, Ms. Elgee advised that at the present time non-covered employees are higher in most districts than union employees. That has been the case for the past ten years. The proposal would make the majority of the districts lower, but there are a couple of exceptions. Senator Donley commented that most of the non- covered employees are top level, management positions which benefit from larger salaries. In response to comments regarding potential cost savings, Ms. Elgee advised of savings of $1.2 million, when fully implemented. Senator Donley MOVED for passage of CSSB 152 (Fin) with individual recommendations. GREGG McDONALD, representing Public Safety Employee's Association (PSEA), came before committee. He acknowledged that the bill would not directly effect PSEA employees but advised of several concerns. The first is that it establishes various classes of employees working in the same area. Further, it sets the cap at $30.0 gross. Mr. McDonald noted that while it would not presently impact PSEA employees, it would become a factor in future negotiations. Prior studies upon which the differential was based were scientific. There is no such evidence to support the current proposal. Mr. McDonald expressed a preference for maintaining the current differential based on its accountability. Co-chairman Frank voiced need to further review possible impacts of the proposed legislation. The bill was thus held in committee for additional consideration. ADJOURNMENT The meeting was adjourned at approximately 11:05 a.m.