1997-01-16                     House Journal                      Page 0086
HB 77                                                                        
HOUSE BILL NO. 77 by the House Rules Committee by request of                   
the Governor, entitled:                                                        
                                                                               
An Act relating to eligibility for the longevity bonus; and                   
providing for an effective date.                                               
                                                                               
was read the first time and referred to the State Affairs, Health,             
Education & Social Services, Labor & Commerce and Finance                      
Committees.                                                                    
                                                                               
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Administration, 1/16/97                                  
Fiscal note, Dept. of Health & Social Services, 1/16/97                        
Zero fiscal note, Dept. of Health & Social Services, 1/16/97                   
                                                                               

1997-01-16                     House Journal                      Page 0087
HB 77                                                                        
The Governor's transmittal letter, dated January 16, 1997, appears             
below:                                                                         
                                                                               
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
As part of my Administrations effort to reduce state spending and              
address our budget gap, I am reintroducing a bill that sets income             
limits on the longevity bonus.  These limits would be set so that only         
those senior citizens in upper income brackets who least rely on the           
bonus would no longer be eligible for the program.  I asked the                
legislature to consider this proposal last year and still believe it is a      
responsible approach to our need to cut state spending.                        
                                                                               
This bill would limit the longevity bonus to those senior citizens with        
gross incomes of less than $60,000 a year or, for married seniors, a           
combined annual gross income of $80,000.                                       
                                                                               
Although the 1993 amendments to the bonus statutes closed the                  
program to any new applicants as of this year, the savings over the            
next few years are relatively small.  The plan presented in this bill is       
estimated to reduce program costs by about 8 percent, or about $6              
million annually.  Another $2 million would be saved in accompanying           
hold harmless provisions of the Adult Public Assistance budget                 
because the federal government will not count the longevity bonus              
against public assistance payments if the bonus carries an income              
restriction--such as contained in this bill.                                   
                                                                               
This proposal does not needs base the bonus program which some                 
seniors oppose, believing that equates to welfare.  Approximately 92           
percent of seniors currently on the program, or more than 25,000               
people, would see no change in their bonuses.  The relatively high             
income level of $60,000 means the bonus would not just be limited to           
those seniors at lower incomes, but would continue to recognize the            
contributions of our Alaska seniors.                                           
                                                                               
This bill considers only income, not assets, so recipients with moderate       
incomes will continue to receive the bonus even if they own valuable           
but non-liquid assets, such as homestead property or a residence which         
has greatly  increased  in  value  over the years. Also, a senior made         

1997-01-16                     House Journal                      Page 0088
HB 77                                                                        
ineligible for the bonus by this law would be reinstated to the program        
if his or her income later dropped below the cutoff levels.                    
                                                                               
This proposal is a logical approach to trimming our budget gap without         
reducing essential programs and services to our residents.  I urge your        
consideration of this measure.                                                 
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor