04/07/1993 02:38 PM House FIN

  HOUSE BILL NO. 81                                                            
                                                                               
       "An Act relating to the longevity bonus program."                       
                                                                               
  CEICLIA KUNZ, JUNEAU  spoke in support of  continued funding                 
  of the longevity bonus program.   She asked "what will those                 
  old people do" without continuation of the program.                          
                                                                               
  RUPE ANDREWS, AMERICAN ASSOCIATION  OF RETIRED PERSONS spoke                 
  in opposition of CSHB 81 (STA).  He supported the Governor's                 
  legislation, SB 58.  He preferred a phase-out period.                        
                                                                               
  NANCY BEAR-USERA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION                 
  noted that  the state has  attempted to  address the  fiscal                 
  liability of the longevity bonus program.  She stressed that                 
  Governor's   proposal  is   fair   and   reasonable.     The                 
  Administration is not in support of CSHB 81 (STA).                           
                                                                               
  Representative  Martin  felt   that  the  phase-out   period                 
  proposed in SB 58 is too protracted.  He asked if a straight                 
  step down program was considered.  Commissioner Usera stated                 
  that  a  straight step  down approach  was considered.   She                 
  stressed that the intent is to protect current participants.                 
  She noted that those on the program are generally on a fixed                 
  income.                                                                      
                                                                               
  Commissioner  Usera clarified that  under SB 58  the cost of                 
  the  program would rise for four years.  CSHB 81 (STA) would                 
  result  in  an  immediate  savings  of  approximately $1,200                 
  thousand dollars in FY 94.  She stressed that the Governor's                 
  approach considers the social need  along with the financial                 
  concerns of the state.                                                       
                                                                               
  Representative Therriault  expressed  the desire  to see  an                 
  immediate  savings.   Commissioner Usera  asserted that  the                 
  state can afford to continue the program in order to allow a                 
  phase out of the program.                                                    
                                                                               
  Representative Martin  expressed concern with  hold harmless                 
  costs.                                                                       
                                                                               
  (Tape Change, HFC 93-97, Side 2)                                             
                                                                               
  Representative   Martin   favored   an  immediate   savings.                 
  Commissioner Usera strongly  supported a phase-out approach.                 
  She  noted  that the  Department of  Administration's budget                 
  fully funds the FY 94 longevity  bonus.  She reiterated that                 
  the Governor's plan is reasonable.                                           
                                                                               
                                                                               
                                5                                              
                                                                               
                                                                               
  Co-Chair  Larson  emphasized  the  state's  need  to  reduce                 
  spending.      He   noted   that   state  expenditures   are                 
  approximately $250 million dollars over  state revenues.  He                 
  asked, how long can the  State of Alaska spend more  than it                 
  makes.                                                                       
                                                                               
  Representative  Brown  asked   if  the  Administration   has                 
  considered  reducing payments  to $225  hundred  dollars per                 
  month  and retaining the  phase-out approach.   Commissioner                 
  Usera  replied that she has  been convinced that $25 dollars                 
  less  a  month   would  represent  a  large   reductions  to                 
  participants of the program.                                                 
                                                                               
  Representative Therriault asked if the  decision was made to                 
  hold  harmless  those  that are  currently  on  the program.                 
  Commissioner  Usera  replied  that  the  intent is  to  hold                 
  harmless current participants as long as possible.                           
                                                                               
  HB 81 was HELD in Committee.