Senate Finance makes choice observations of House budget - Must Read Alaska
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Wednesday, October 23, 2019
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Senate Finance makes choice observations of House budget

Must Read Alaska curated a few of the comments from senators on the Finance Committee as they discussed the House’s version of the operating budget today, with the guidance of the Legislature’s Finance Division Director David Teal:

Sen. Lyman Hoffman

Sen. Lyman Hoffman: “The underlying theme of the House of Representatives budget is that government gets the first crack at the $3 billion and anything remaining after government goes to the people. Is that a fair statement of the way this budget has been drafted?”

David Teal: “Mr. Chairman, I’m not sure that everyone would phrase it that way but that’s pretty accurate.”

Sen. Natasha von Imhof: “The dividend is sort of the 18th agency and competes with the 17 other agencies. I look at this: There are no new taxes, about $200 million or so in reductions, no money from any savings accounts at all — no SBR (Statutory Budget Reserve), no CBR (Constitutional Budget Reserve). Those are kind of observations.”

David Teal: “All correct observations.”

Sen. Peter Micciche

Sen. Peter Micciche: “To be fair there’s a couple ways to frame this discussion. The governor’s plan requires new taxes. But it’s paid locally instead of to the state. For folks that own a piece of property or that  live in municipalities that have to make up the difference, it requires new taxes.

“To also be fair, The House budget impacts household income because of the shift from the dividend to State government. Both of them have those impacts. So it’s not like either one is impact free. For the folks who feel they’re entitled to the dividend, they’re going to be enraged by our discussion, that we make it sound like there’s no  impact. But they have to be clear on the other side, that the governor’s plan requires revenue, but it looks like it’s not State revenue. It looks like they’re claiming there’s no requirement for state revenue but it’s made up elsewhere.”

Sen. von Imhof: “With the dividend potentially being considered the 18th agency, some states have an income tax and this causes citizens to pay attention to the growth of government. Alaska has the dividend, which kind of does the same thing. It has Alaskans now really paying attention to the growth of government because as passing of the POMV with the dividend being paid out of that as well as government, the dividend sort of acts as almost the same thing as a tax. It causes people to pay attention to the growth of government. Alaska is slowly morphing into the new POMV age, which I think is a good thing. The dividend is yes, competing with the other agencies.”

Sen. Hoffman: The House of Representatives did not include a dividend in their operating budget. They have not determined what that dividend is. There’s been many statements by the individual members of the House of Representatives, but the House as a body has not taken action on any dividend level. The public should be aware that even though we have a graph in quadrant one, and the scenario for the House of Representatives, there is no official action by that body.”

David Teal

David Teal: “They [the House] passed budget without a dividend.The governor submitted a separate dividend bill. And they said ‘We will address the dividend in that bill. That’s the way the governor submitted the budget to us.’ That decision has not been made. The underlying conceptual assumption is this is how much is left for dividends. That doesn’t necessarily mean that that’s what the House’s dividend plan is.”

The Senate Finance Committee will take up crime bills Wednesday, considering the governor’s bills SB 32 and SB 35, and will continue its budget work on Thursday with another presentation and question and answer period with David Teal.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Great discussion. Gives insight into how difficult it will be to maintain a budget veto.
    For those interested in knowing: “The facts, Mam, just the facts.” You may wish to start with the Legislative Finance Division’s FY 2020 budget “Overview.” http://www.legfin.akleg.gov/Overview/Overview2020.pdf
    In this discussion, the Division lays out the brief history of the reserves, why they no longer can provide for annual spending, how a tax takes a year to implement, and the remaining choice is to cut. The question being where.
    MRAK catches the key points on which the Senate discussion will revolve. In my experience, pay attention to Senator Hoffman. He is pointing out that the House, once again, is trying to play games and dump key decisions in the lap of the Senate. Is it possible someone remembers the Kenai Penninsula discussion regarding the PFD in the last election?
    BTW. on the Legislative Finance Div website you can find budget discussions from 1989 to present. Lots of numbers!
    Remember, for revenue received by the State, and projected revenue, go to the Division of Revenue’s website. The executive branch documents receipts and provides projections used by the Legislature to create the budget. Legislative Finance documents spending and provides a track record of each committee’s work.

  • I say shut the State Government down. With SB91 it’s not like we even get Public Safety; so why even have a State Government?

  • It amazes me how the 60 people in the legislature have no obvious knowledge of how they are being vilified in conversations and on Facebook. Almost all regional Facebook pages for discussion eventually discuss the PFD and how we need to find people to replace them. I’m so glad MatSu has core Conservatives representing us. But, we are tracking votes and amendments.

  • P.s. it amazes me that the Legislature refuses to acknowledge The ERA and its $18 billion. That used to replenish itself until 2018 SB 26 with POMV and direct deposit from PFD REDUCTION.

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