Legislature(2001 - 2002)

04/30/2002 08:05 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB 340 - HOLD HARMLESS PROVISIONS OF PFD PROGRAM                                                                              
CHAIR COGHILL  announced that the  first order of  business would                                                               
be CS FOR SENATE BILL NO.  340(FIN)(efd fld), "An Act relating to                                                               
public  notice   of  information   relating  to   permanent  fund                                                               
dividends,  and  to treatment  of  permanent  fund dividends  for                                                               
purposes of  determining eligibility  for certain benefits."   [A                                                               
proposed  House  committee  substitute   (HCS),  version  P,  22-                                                               
LS1361\P,  Cook,  4/24/02,  was  adopted as  the  work  draft  on                                                               
Number 0102                                                                                                                     
REPRESENTATIVE   FATE  commented   that   this   bill  has   been                                                               
characterized as  mean-tempered, but it's really  not.  Something                                                               
needs  to be  done about  the spending  in the  state of  Alaska.                                                               
This was just a method to try  to find a solution by placing some                                                               
of the responsibility on the  people that sometimes need the most                                                               
help  and   by  trying  to   spread  the  burden  of   those  who                                                               
predominantly need  that help.   He stated that he  doesn't think                                                               
it  is mean  spirited; it  is simply  something that  signals the                                                               
fact that  expenses in the  state need to  be looked at  [to see]                                                               
how they  can be absorbed.   This may  not be the  mechanism, but                                                               
the Finance Committee will scrutinize it.                                                                                       
Number 0230                                                                                                                     
REPRESENTATIVE FATE  moved to report  [HCS CSSB 340,  version 22-                                                               
LS1361\P,  Cook,  4/14/02]  out   of  committee  with  individual                                                               
recommendations and the accompanying fiscal notes.                                                                              
Number 0262                                                                                                                     
REPRESENTATIVE  HAYES objected.   He  said that  this bill  takes                                                               
away  the whole  spirit  of the  permanent fund.    Unless he  is                                                               
mistaken, he  said he  thought the whole  point of  the permanent                                                               
fund  was to  make  sure everybody  was on  equal  footing.   Now                                                               
people will be told that the  system has been changed for welfare                                                               
reform, that  they're getting  a hand up,  and then  they're told                                                               
that  they're  not  worthy  of  something  that  everybody  gets,                                                               
including the millionaire and everyone  else.  He said he thought                                                               
that was problematic.                                                                                                           
REPRESENTATIVE HAYES  referred to comments that  this bill should                                                               
just go  to the  Finance Committee  to be  scrutinized.   He said                                                               
that he  understood that the  purview of the House  State Affairs                                                               
Standing Committee is to look at  statewide policy issues.  If it                                                               
is  a policy  issue that  the committee  doesn't think  should be                                                               
made at this time,  it should be dealt with right  here.  He said                                                               
he thought this is a bad statement.                                                                                             
REPRESENTATIVE HAYES  told the members  that he came from  a poor                                                               
family  who had  been on  welfare, and  he couldn't  imagine them                                                               
driving  to  Alaska from  Baltimore  to  get [a  permanent  fund]                                                               
check.   He doesn't know of  any poor people who  could have done                                                               
that.  Some  of the premises of people coming  up here to receive                                                               
this check is not very true.   It might happen in some cases, but                                                               
he doesn't think there are a lot  of folks moving up because of a                                                               
permanent  fund check.    A good  job has  been  done on  welfare                                                               
reform:   giving people a  hand up not  a handout.   He expressed                                                               
discomfort with this legislation and will vote against it.                                                                      
Number 0460                                                                                                                     
REPRESENTATIVE JAMES said  she will allow this bill  to move, but                                                               
this  issue is  problematic  from the  general public's  concern.                                                               
She  stated  that  there  are  those  who  have  come  to  Alaska                                                               
specifically  because  of  the  benefits.    The  permanent  fund                                                               
dividend is a draw  to the state.  She isn't  saying that is good                                                               
or bad.   She  indicated that  people should  come to  Alaska and                                                               
bring their money  to invest in the state and  create jobs so the                                                               
state won't funnel itself into some kind of a pit.                                                                              
Number 0565                                                                                                                     
REPRESENTATIVE JAMES  admitted that she likes  her permanent fund                                                               
dividend;  most everybody  does.   But something  has to  be done                                                               
about  it;  the  state  cannot  go  forward  with  the  size  and                                                               
calculation of the  permanent fund today.  Any  leftover money of                                                               
the earnings  reserve cannot be  used until the way  the dividend                                                               
is calculated  is changed.  It's  based on the percentage  of the                                                               
income or  half of the  earnings reserve, which ever  is smaller.                                                               
She stated  that there needs  to be a  rational way of  doing the                                                               
permanent fund  dividend.  This  issue is  not going to  go away.                                                               
If  it isn't  taken care  of  here, it's  going to  come back  up                                                               
again.   She would rather deal  with the permanent fund  first in                                                               
the  fiscal issue;  that  is what  has caused  this  issue.   She                                                               
emphasized  that the  state cannot  tax itself  enough.   Another                                                               
part of the issue is that the 18  to 44 year olds are leaving the                                                               
Number 0793                                                                                                                     
REPRESENTATIVE  JAMES said  once  people get  that  money, it  is                                                               
difficult to  take it away.   People gear  up to get  that money.                                                               
She said  she sees  people who have  Christmas presents  that she                                                               
can't afford  to buy.  Because  of the permanent fund,  there are                                                               
people  who wouldn't  have  the  money to  buy  those things  for                                                               
Christmas.  She said she  doesn't wish they didn't have Christmas                                                               
presents, but  she wishes that  they would  be able to  pay their                                                               
bills, pay other things, take  better care of themselves, and eat                                                               
better.   She  reiterated that  a rational  solution needs  to be                                                               
found or the state will never solve the fiscal issue.                                                                           
Number 0880                                                                                                                     
REPRESENTATIVE CRAWFORD  said he remembers when  the debate first                                                               
started on  whether the  permanent fund  dividend would  be means                                                               
tested.  It was decided that  every man, woman, and child who was                                                               
an  Alaskan  would get  a  permanent  fund  dividend.   It  gives                                                               
everybody  a leg  up  whether they're  rich or  poor.   He  takes                                                               
exception to  a lot of the  things that have been  said about how                                                               
poor people  are going  to Hawaii  or getting  Christmas presents                                                               
that  they shouldn't.    It  irritates him  when  he hears  about                                                               
"those  people."   He  said  he is  sure  that  there are  always                                                               
exceptions.  There are people  who don't use their permanent fund                                                               
dividend  wisely, but  [the permanent  fund  dividend] has  given                                                               
lots of people chances that  they would have never had otherwise.                                                               
He expressed  opposition to  this bill and  said it  shouldn't go                                                               
any further than right here.                                                                                                    
Number 0970                                                                                                                     
REPRESENTATIVE  JAMES said  Alaskans getting  this huge  dividend                                                               
causes  a mentality  of not  earning their  own way.   When  K-12                                                               
education, the university, and getting  permits in the Department                                                               
of Natural Resources (DNR), and  things that grow the state can't                                                               
be funded, then this is the wrong politics.                                                                                     
Number 1020                                                                                                                     
REPRESENTATIVE  HAYES  said  he  understood  what  Representative                                                               
James is saying,  but this bill would take $11  out of everyone's                                                               
permanent fund  check to have  7,000 parents and  10,000 children                                                               
not receive this  check.  He said that $11  is a miniscule amount                                                               
of money  to afflict that  type of damage  to the poorest  of the                                                               
population.  Even  though it was said that  K-12, the university,                                                               
and DNR  can't be  funded, a  bill in the  House was  just passed                                                               
that  is going  to give  away $41  million a  year that  could do                                                               
those things.                                                                                                                   
Number 1088                                                                                                                     
REPRESENTATIVE WILSON agreed that some  decisions have to be made                                                               
in  this  state.    The  fiscal mess  needs  to  be  dealt  with.                                                               
However, this  bill affects  66 people in  her district,  and she                                                               
said she  is concerned about that.   She indicated that  she will                                                               
probably vote "no recommendation."                                                                                              
Number 1243                                                                                                                     
CHAIR  COGHILL  said this  does  not  affect the  permanent  fund                                                               
dividend  in any  way.   The people  on temporary  assistance and                                                               
food  stamps still  get the  permanent fund  dividend, it's  just                                                               
that  it's counted  as  income.   Everybody has  to  count it  as                                                               
income.   This takes care  of the safety  net issue for  those on                                                               
SSI  [Supplemental   Security  Income]  and  APA   [Adult  Public                                                               
Assistance].   It  does  not disqualify  people  from the  Alaska                                                               
Temporary  Assistance Program,  except for  the months  when they                                                               
have  income.   That  would  be  true if  they  got  a job.    He                                                               
recognized that  these are hard  times.   He said he  thinks that                                                               
counting the  permanent fund dividend  as income  is appropriate,                                                               
except for "in the true safety net issues."                                                                                     
Number 1350                                                                                                                     
A roll  call vote  was taken.   Representatives Fate,  James, and                                                               
Coghill  voted in  favor  of moving  the  bill.   Representatives                                                               
Crawford,   Hayes,  Stevens,   and  Wilson   voted  against   it.                                                               
Therefore,  HCS CSSB  340(STA) failed  to move  out of  the House                                                               
State Affairs Standing Committee by a vote of 3-4.                                                                              
[Representative Wilson later reconsidered her vote.]                                                                            

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