Legislature(1993 - 1994)
03/02/1993 03:00 PM House HES
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* first hearing in first committee of referral
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+ teleconferenced
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HB 67: ELIGIBILITY FOR PUBLIC ASSISTANCE CHAIR BUNDE noted that JAN HANSEN, DIRECTOR OF THE DIVISION OF PUBLIC ASSISTANCE IN THE HEALTH AND SOCIAL SERVICES DEPARTMENT, was available to answer questions. He said there was an amendment to the bill. REP. VEZEY stated that, as the committee had not yet adopted the committee substitute for HB 67, he moved the committee adopt the committee substitute. CHAIR BUNDE noted objection to the motion, but did not name the member objecting. He asked Rep. Vezey to speak to his motion. Number 089 REP. VEZEY said the committee substitute was simple, deleting existing language in AS 47.25.320 paragraph B, which requires the department (of Health and Social Services) to apply the cost of living adjustment (COLA) annually to the Adult Public Assistance (APA) program. REP. BRICE said he had not been given an amendment, but a House bill. He asked whether the specific lines and pages affected by the amendment had been broken out. CHAIR BUNDE said that it was his error. He remarked that the committee had a committee substitute. REP. BRICE said he had the CS, but had no way of (unintelligible). CHAIR BUNDE said the committee needed first to adopt the CS, then could amend it. He repeated the motion to adopt the CS for HB 67. Number 106 REP. B. DAVIS said she had just received the CS which was the subject of the vote. She asked the chair if he was asking for a vote on the CS for discussion purposes only, or for a vote to adopt a CS that had only been provided to the committee a few minutes earlier. She said she had lots of amendments prepared for the old bill and that the new CS did not address some things she wanted. If the committee was going to have a new CS, she said, it seemed to her like it should be discussed with the committee to see what all members would want drafted. She said the CS was identified as coming from the HESS Committee, and asked if Chair Bunde had requested it. CHAIR BUNDE answered no, it was a CS proposed by Rep. Vezey for the committee's discussion. REP. B. DAVIS said she did not believe it was done properly. If Rep. Vezey had wanted to bring a draft in for discussion, it should have been brought in by him and not the committee. She said that a designation of a HESS CS indicated that Chair Bunde had it drafted. CHAIR BUNDE commented that when the bill then before the committee left the committee, it would be a bill drafted by the committee. REP. B. DAVIS repeated that the bill before the committee said HESS, not Rep. Vezey. CHAIR BUNDE said that, for the sake of expediting the discussion, Rep. B. Davis should consider the bill before the committee a HESS CS. He said, "Before us is the question of adopting this CS for discussion and action." REP. B. DAVIS remarked, "Did you say for discussion?" CHAIR BUNDE replied, "And action." Number 080 REP. KOTT asked for a brief explanation of the subsequent changes. He said the accompanying letter said to delete Section 2, add Section ... CHAIR BUNDE interrupted, saying that was an amendment to the CS and that he should ignore it at the time, as the committee was discussing only the CS for HB 67. He asked Rep. Vezey if he could answer the questions. Number 089 REP. VEZEY said the CS was the same as the original bill, except that it deleted Section 2 of the original bill and renumbered the sections. Section 6 of the CS repealed AS 47.25.320 (D). It also repealed AS 47.25.320 (E), which was also repealed in the original HB 67. He said that, therefore, the only difference was that the CS eliminated the COLA provision for the assistance program. Number 106 REP. B. DAVIS stated that the new CS repealed the COLA, whereas the original HB 67 just suspended the COLA. She wanted Rep. Vezey to explain what Section D of the CS would do, because she did not know what it was. REP. VEZEY said Rep. B. Davis was correct, the CS for HB 67 deleted Section 2 of HB 67 by adding in Section 6 of the CS the statement that AS 47.25.320 (D) was repealed. He agreed that the new CS repeals the existing COLA provision and the proposed language that was in Section 2 of the original HB 67. CHAIR BUNDE asked for further discussion. REP. B. DAVIS asked questions about what was being deleted in the CS. REP. VEZEY responded, "Paragraph E was repealed in the original bill. I do not remember the wording in paragraph E." REP. B. DAVIS asked, "What is D?" REP. VEZEY stated, "..Paragraph D in existing statutes is the existing COLA provision. The committee substitute proposes that that be deleted, and it also does not include the proposed revisions to paragraph D that were in the original HB 67. So the committee substitute repeals any provision for a COLA in the assistance program." REP. B. DAVIS asked Chair Bunde to have someone from the Department of Health and Social Services speak to the changes. CHAIR BUNDE agreed. He called a two-minute at-ease so he could look up the specific section and share it with the committee. He called the meeting back to order and invited Jan Hansen to testify. Number 160 JAN HANSEN, DIRECTOR OF THE DIVISION OF PUBLIC ASSISTANCE IN THE DEPARTMENT OF HEALTH AND SOCIAL SERVICES, said she could speak to Section D, but could not remember Section E. CHAIR BUNDE asked her to speak to Section D, and said he would look up Section E. MS. HANSEN stated, "Mr. Chairman, in Section 6 of the committee substitute bill, AS 47.25.320 D is the section that was in the original bill as Section 2. In that section of the statute there is the allowance for the cost of living allowance, and for the suspension of the cost of living allowance during FY94." CHAIR BUNDE said, "Section D, then, suspends COLA for one year?" MS. HANSEN replied, "Mr. Chairman, that's correct. Section D, as proposed in the original bill, prior to that, Section D provides for the cost of living increase." Number 180 CHAIR BUNDE said Section E would be before the committee in a moment and called a brief at-ease. REP. B. DAVIS said she would like to continue to question Ms. Hansen. CHAIR BUNDE called the meeting back to order and said the questioning would continue. REP. B. DAVIS asked Ms. Hansen the fiscal impact of repealing COLA instead of suspending it for a year, as called for in the original HB 67. She also asked whether the department's intention had not originally been to suspend COLA for one year. MS. HANSEN said there would be no fiscal impact of suspending COLA in FY94, as that was the intent of the original bill, but the impact would be felt in later years. She offered to comment on the issues at hand. CHAIR BUNDE invited her to proceed. Number 200 MS. HANSEN said the Department of Health and Social Services had proposed suspending COLA for a year because of the need to contain costs of ever-growing welfare programs so as to have enough money to provide to those in need as much as the state could afford to pay. The department also had an obligation to look after the poor and unable to care for themselves, she said. Five years later, as the cost of living increased, recipients would be receiving benefits that were significantly lower than the poverty level, lower even than the current benefits, which, after allowing for the cuts contained in the bill and the suspension of COLA, would be 70 percent of the federal poverty level. She said the CS version of HB 67 would eliminate the state mechanism by which the state maintains benefits at a certain percentage of the poverty level. MS. HANSEN proposed alternatives that had been under discussion, including suspending the COLA for two or three years, or requiring COLA in years in which benefits would fall below a certain percentage of the federal poverty level. She said she did not want to slow down progress of the bill, but it was important to express her concerns that the AFDC benefits met recipients' basic needs for the brief time most people received benefits. She said if the benefit level fell to an unlivable level, families in crisis would be unable to do what they needed to find jobs and move off welfare. Number 252 CHAIR BUNDE said future legislatures could increase AFDC payments if they wanted to, to address any situation in which benefit payments fell dangerously below the federal welfare level. MS. HANSEN agreed. Number 261 REP. OLBERG asked whether other states had COLA for welfare programs. MS. HANSEN said Alaska was alone in providing such a COLA benefit. REP. OLBERG asked how other states handled changes in benefit amounts. MS. HANSEN said that in most states, the state legislatures raise and lower rates through the regular legislative process. REP. OLBERG asked Ms. Hansen to explain elements of the bill which appeared to reflect increases in the welfare benefit levels. MS. HANSEN answered that the bill reads strangely because it amends the benefit levels set out in an original statute passed in 1982. While repeated COLAs since 1982 have significantly raised the amount of welfare payments actually made, the payment standards in statute remain the same. REP. OLBERG asked whether he understood her to mean that the bill would bring the law up to date, based on the amounts that have grown due to COLA. MS. HANSEN said that was correct. While it looked like an increase, it actually represented a rollback, she said. REP. OLBERG commented that HB 67 would leave welfare rate increases to the legislature. MS. HANSEN agreed that the bill removes the automatic COLA increases. She also noted that the committee substitute would repeal COLA for Aid to Families with Dependent Children (AFDC), but not for COLA for APA. CHAIR BUNDE thanked her for pointing that out. REP. G. DAVIS said he felt cold enough about HB 67, and that the CS would create too many roadblocks to the bill. He said COLAs are provided for many state government programs, and if it was necessary in any area, it would be for welfare recipients. (Rep. Olberg departed at 4:13 p.m.) Number 330 REP. TOOHEY asked whether state employees would continue to receive COLAs for their wages under the bill. (Rep. Olberg returned at 4:15 p.m.) CHAIR BUNDE said state workers received COLA as a negotiated benefit in their employment contracts. He passed out sections of state statutes concerning welfare payments. REP. BRICE asked how the AFDC program was funded. Number 353 MS. HANSEN answered that the state and federal governments split the cost of the AFDC program evenly, and the COLA benefit provided by the state increased the federal matching grant. REP. BRICE asked if that meant the state was declining federal money by cutting COLAs. MS. HANSEN answered that the bill would lower the amount of federal participation per individual, but the state would actually receive $124 million in matching funds for AFDC from the federal government in FY94, compared to $120 in FY93. Number 370 REP. BRICE said repealing COLA for AFDC might prevent the state from receiving federal funds in future years. CHAIR BUNDE asked whether Rep. Vezey would comment on the information that his amendments would cut COLA for AFDC, but not for APA. REP. VEZEY said he intended to propose amending CSHB 67 to repeal COLA for APA as well, if the amendment removing COLA for AFDC passed. Number 382 REP. BRICE asked Rep. Vezey whether he knew that APA provided service to the blind, disabled and aged, who were generally unable to work. REP. VEZEY said yes. CHAIR BUNDE repeated Rep. Vezey's motion to adopt the CS version of HB 67, and hearing no further discussion, asked for a roll call on the motion. Those voting yea were Reps. Vezey, Kott, Olberg, Toohey, and Bunde. Those voting nay were Reps G. Davis, B. Davis, Nicholia, and Brice. The motion PASSED 5-4. REP. VEZEY moved an amendment to CSHB 67, to page 2, line 25, which would insert a period after the word "recipients" and delete language through to page 3, line 1, ending with the phrase "USC 13.81 through 13.85." He said the intent of the amendment was to repeal the COLA provisions for the Adult Public Assistance program. CHAIR BUNDE asked for objection to the amendment, and hearing objections from at least two members, asked Rep. Vezey to speak to his amendment. Number 400 REP. VEZEY said he believed legislatures had the prerogative to appropriate funds, and no future legislature could be bound by past legislatures, and if the funding for APA were to be increased it should be by legislative action. REP. BRICE asked Ms. Hansen how the cuts in COLA for APA and AFDC and the other cuts in welfare programs in CSHB 67 would cost the state in federal funds over the next five years. Number 410 MS. HANSEN said she could not make such projections because she could not determine what elements of federal funding might be directly attributable to not granting COLA. She could only refer to FY94 figures, which showed a greater total outlay of federal funds. She expressed the hope that there would be smaller caseloads in the future, but, with the increasing levels of need, the amount of federal money coming to the state for the programs would be the same as or greater than they were at that time. She agreed, though, that the federal money would not include federal matches for COLA, and she did not know how much the potential loss would be. REP. BRICE said that while the way to cut caseloads was to get people to work, programs supporting that aim, such as day care or child care assistance, were being cut. He said that was a contradictory situation. Number 438 REP. B. DAVIS stated that the legislature had the authority to suspend COLA already, but there was no guarantee that any future legislature would increase the rates. She said the committee's earlier action would further impoverish women and children on welfare, and the committee was about to do the same to impoverished elderly and handicapped people. She encouraged the committee not to continue in the direction it had set out, and to vote down the amendment. She said the votes showed not that the legislators were fiscal conservatives, but that they were willing to balance the budget on the backs of women and children and those who could not speak for or help themselves. Number 452 REP. B. DAVIS said, "I am totally against this, and I want to go on the record saying that I know that we all ran on the proposal to come down and do something about the budget, and there's lots of things that need to be done about the budget. And I'm even willing to try to compromise to the point that I might even would have said, `Well, maybe we would suspend some of the COLA, or maybe we'd do some other things.' But to do all of these things is just, will be so harmful to people that can't help themselves, that I can't go along with the amendment that's on the floor." REP. TOOHEY asked Rep. B. Davis how the legislature could suspend COLAS. She also asked if there were other federal programs or funds available to those blind or impaired APA recipients who would see COLA cut from their benefits so that they could continue to eat. She directed the question to Ms. Hansen and to Rep. B. Davis. Number 466 MS. HANSEN answered that federal funds for AFDC go to the state, which distributes them to recipients. Recipients of APA receive supplemental security income from the federal government first, a benefit which has a cost of living allowance included. Recipients also receive a state supplement. Therefore, elderly people receive federal payment which still has a cost of living allowance included. REP. TOOHEY asked a clarifying question, that if the state cut COLA for APA, then recipients would remain at the same level of benefits, receiving federal funds and state funds in addition. Number 478 MS. HANSEN said that cutting COLA would not reduce the current level of benefits. She said APA recipients would receive a slight increase, because if their federal benefits increased through federal COLA, the state could not cut back its contribution. REP. B. DAVIS answered Rep. Toohey's earlier question about how the legislature could suspend COLA. She said it could be done by passing a bill. She said that cutting COLA would mean less money for welfare recipients to spend on food, clothing and shelter, regardless of any compensatory increase in federal benefits. Number 500 CHAIR BUNDE called the question, whether to delete the COLA provisions for Adult Public Assistance, as Rep. Vezey moved in his amendment. He called for a roll call vote. Those voting yea were Reps. Toohey, Bunde, Vezey, Kott and Olberg. Those voting nay were Reps. G. Davis, B. Davis, Nicholia and Brice. The motion PASSED 5-4. CHAIR BUNDE said the committee was then considering CSHB 67 as amended. Number 505 REP. B. DAVIS introduced an amendment to set the AFDC benefits at the 1992 level instead of at the 1991 level as contained in CSHB 67. REP. G. DAVIS asked her to detail the changes in the bill caused by her amendment. REP. B. DAVIS detailed the changes her amendment would make in the benefit levels. CHAIR BUNDE asked where a particular change would go. REP. VEZEY answered his question. He asked for help in following the amendment. CHAIR BUNDE read through the changes. REP. B. DAVIS said she wanted to replace the amount of $98 with $102, and the amount of $792 with $821, and the amount of $497 with $514. She made other comments to help other committee members understand her amendments. TAPE 93-28, SIDE A Number 000 REP. TOOHEY asked what effect the amendment might have. MS. HANSEN stated, "Yes, Mr. Chairman, I have it also. If any committee members have previous handouts we have it in a chart, I'm going to try to look at this chart and see the ... As proposed in the bill now, the total reduction would have been $10.7. This would create a reduction of $6.022 million. I would have to do a subtraction to - it's the difference between those two figures which is the additional cost." CHAIR BUNDE commented, "Ballpark $4 million." MS. HANSEN responded, "Ballpark is about $4 million, $4.7." Number 020 CHAIR BUNDE said he believed it would be necessary to see a fiscal note on the amendment before passing it out of committee. He called for further discussion on the amendment, and hearing none, asked for a roll call. Number 025 REP. BRICE asked for a brief at-ease. CHAIR BUNDE obliged, calling an at-ease at 4:33 p.m. He called the meeting back to order at 4:38 p.m. and noted the amendment remained on the floor. Number 045 REP. B. DAVIS spoke to her amendment. She said she came to the meeting prepared with a series of amendments in hopes of compromising with the committee, agreeing to suspend the COLAs but eliminate the planned ratable reductions in benefit levels. But after seeing present and future COLAs stripped from the programs, and given the bill's provisions to roll back benefit rates to the 1991 levels, she said it would be fair not to have to realize all of the bill's savings in one year. REP. B. DAVIS said, "And rather than base the COLAs on the 91, I think they should be based on 92, to give a little bit more of a buffer to the people who have to live on welfare. We say we do this to welfare recipients, but we do it to children, because most of the people that's being served in public assistance are children. This is one way to show that we feel that we have to have some cuts across the board, and yet not take everything away." Number 077 REP. TOOHEY asked Rep. B. Davis how close her numbers come to the 1992 benefit figures. REP. B. DAVIS answered that her numbers were the same as the 1992 figures. Number 082 REP. NICHOLIA spoke in support of Rep. B. Davis' amendments, saying that the bill would hurt her constituents, who live in rural areas where living costs are high. "What you have done today is very, is detrimental to children. Once again, two-thirds of the people that are going to be impacted by what we do with this bill are children. And please remember that. Because you're not doing it to me, you're not doing it to anybody here. You're doing it to the children and those people that really depend on this money that's coming into their home." Number 101 REP. TOOHEY repeated that rolling back welfare benefits to the 1992 levels instead of the 1991 levels would still save $4 million. MS. HANSEN said that the difference between rolling back benefits to 1991 levels and 1992 levels was about $4.7 million. REP. TOOHEY asked again whether the state, by sticking to 1992 level benefits, would still save $4 million in FY94. MS. HANSEN said the FY94 budget was built assuming that welfare payments would be rolled back to the 1991 levels, as proposed in HB 67. If HB 67 were amended to include a lesser rollback, that would mean the current budget as presented would not be enough to completely fund the AFDC program. Number 128 CHAIR BUNDE said he would not want the bill passed out without a fiscal note if the amendment passed. He announced that the committee would not be able to get to HB 156 and HB 157, and apologized to those in the audience who had been waiting. He said the committee would notify them as soon as those bills were rescheduled, at the top of some future committee meeting calendar. REP. TOOHEY said she was still confused by Ms. Hansen's explanation of how cutting COLA would bring more federal money. REP. OLBERG said the department budget reflected a ratable reduction to 1991 levels. MS. HANSEN said the reductions were to the 1991 levels for AFDC, and to 1990 levels for APA. REP. OLBERG said the fiscal notes showing savings of $6 million reflect those reductions. Number 155 REP. BRICE said asked if it was not presumptuous for the governor's budget to assume the legislature would make budget cuts even before the legislature had met to consider those cuts. MS. HANSEN said it was still possible to change the budget if necessary. REP. BRICE said it seemed like the department was putting the cart before the horse by not passing the bills cutting budgets before writing the budgets. Number 173 CHAIR BUNDE noted that Rep. B. Davis' amendment, then on the floor, called for reductions in welfare benefits to 1992 levels, instead of 1991 levels, as called for in CSHB 67. REP. NICHOLIA said the role of the House Health, Education and Social Services Committee was to weigh the impact of legislation on people, not the budget. Number 180 CHAIR BUNDE called for a roll call vote on Rep. B. Davis' amendment. Those voting yes were Reps. Nicholia, B. Davis and Brice. Those voting nay were Reps. Toohey, Bunde, G. Davis, Vezey, Kott and Olberg. The amendment FAILED 3-6. Number 196 REP. BRICE introduced an amendment to delay the effective date of the bill until 90 days after the Department of Health and Social Services mailed notification of the changes to welfare recipients. REP. G. DAVIS said welfare recipients should be notified of any impending changes in their benefits as soon as possible. Number 229 REP. OLBERG asked whether the amendment would make the bill's effective date 90 days after the mailing of notices to recipients. REP. BRICE said, "Section 11 references Section 9, which references 30 days after June 1993." REP. OLBERG read Section 11 of Rep. Brice's amendment. REP. BRICE read Section 9 of his amendment. Number 246 CHAIR BUNDE asked Rep. Brice what he intended by the requirement in section 11 of his amendment regarding the revisor of statutes. REP. BRICE said that was a good question, and it would probably be necessary to pose it to the revisor of statutes. Number 255 REP. OLBERG said it would probably affect the effective date of the bill. The revisor would plug in the effective date after the department mailed to welfare recipients the required notices of changes in benefits, he said. CHAIR BUNDE said the issue had been highly publicized to date. REP. G. DAVIS asked Ms. Hansen whether the department had considered how to notify welfare recipients of changes in their benefits. MS. HANSEN answered that the department planned to notify clients 30 days before the reductions took effect, but no notice had been made to date, as the changes were only proposed and had not been passed by the legislature. Number 287 REP. BRICE said it could be late May or early June by the time a bill were passed and signed into law by the governor, leaving inadequate time for notice. He said it would be humane to provide adequate notice of benefit changes. Number 300 CHAIR BUNDE said the department would be remiss to wait until such changes were passed by both houses of the legislature before beginning steps to notify recipients. REP. G. DAVIS said he understood the amendment would delay the effective date of the bill by 90 days, which would mean the loss of three months' worth of the cost savings intended in the bill. REP. BRICE said the department could respond to that with some kind of estimate. Number 318 REP. TOOHEY asked Ms. Hansen for a ball-park estimate of how much a three-month delay would affect the proposed savings. MS. HANSEN explained if CSHB 67 were delayed by three months, that would mean a 25 percent cut in the bill's cost savings, or about $2.5 million. Number 325 CHAIR BUNDE asked the will of the committee on Rep. Brice's amendment. Hearing a call for the question, he asked for a roll call vote. Those voting nay were Reps. Toohey, Bunde, G. Davis, Vezey, Kott and Olberg. Those voting yea were Reps. B. Davis, Nicholia and Brice. The amendment FAILED 3-6. CHAIR BUNDE announced that CSHB 67 was before the committee, and asked the will of the committee. He heard a call for the question. REP. BRICE objected, saying that he had a proposed amendment. CHAIR BUNDE said the committee would pass the bill out of committee that day. Number 333 REP. BRICE said he understood, but wished to propose an amendment to delay the effective date of the bill from July 1, 1993, to January 1, 1994. He moved passage of the amendment. He said he intended to extend the COLA benefits to welfare recipients until the time when adjustments to the rate due to COLA would have otherwise taken effect. CHAIR BUNDE said that, as three months' delay in the bill's effective date had earlier been shown to represent $2.5 million, then Rep. Brice's amendment represented $5 million. REP. OLBERG asked whether COLA was based on a calendar year. MS. HANSEN answered that it was. Number 353 REP. BRICE said the intent of the amendment was to establish the starting date of the bill's effects at the start of the calendar year as well. CHAIR BUNDE repeated Rep. Brice's amendment to delay the effective date of CSHB 67 from July 1, 1993, to January 1, 1994. He called for a roll call vote. Those voting nay were Reps. Toohey, Bunde, G. Davis, Vezey, Kott and Olberg. Those voting yea were Reps. B. Davis, Nicholia, Brice. The amendment FAILED 3-6. REP. G. DAVIS moved passage of CSHB 67 out of the committee with individual recommendations. CHAIR BUNDE noted objections to the motion and called for a roll call vote. Those voting yea were Reps. Toohey, Bunde, G. Davis, Vezey, Kott and Olberg. Those voting nay were Reps. B. Davis, Nicholia and Brice. The amendment PASSED 6-3.
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