Legislature(1993 - 1994)
03/10/1993 02:20 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
Senate Bill 101, introduced by the Senate Rules Committee by request of the governor, was the only order of business to come before the committee. JAN HANSEN, Director, Division of Public Assistance, Department of Health and Social Services, said SB 101 relates to eligibility and payments for public assistance. The bill is part of the department's and the state's overall package of doing some restructuring and reform of welfare. The department is faced with the continuing escalating welfare caseloads and limited numbers of state revenues. She referred to information the committee had, "FY 94 Budget Overview," and said it contains the background information which provides the context for the bill. Pages 31 and 32 discusses the Division of Public Assistance's welfare reform measures. Ms. Hansen said the benefit payment reductions contained in the bill is one section of the overall plan. She noted that there is also a study on self sufficiency measures. She referred to the Jobs Program and said it is a mechanism by which people are trained so that they can secure a job that will pay a living wage for the entire family. Ms. Hansen said another major aspect of the total proposal by the department has to do with pushing the federal government to make some changes in their laws and policies which will enable us to structure welfare. Another area is the push to increase child support collections as that is a way income can be increased to families who are currently depending on the state. Ms. Hansen said SB 101 will reduce the amount of payments that are made to people on the Aid to Families With Dependent Children (AFDC) Program and Adult Public Assistance (APA) Program. She referred to the limited budget and said the department wants to continue to provide payments and services to the full range of people. By reducing a small amount of the benefits to each person, the increased need will continue to be served. Ms. Hansen referred to the AFDC Program and said there is a suspension of the cost of living allowance (COLA). Currently in the statute, on January 1st of every year, the benefit amounts for AFDC recipients are raised by an amount equal to the federal cost of living allowance which is granted in the Social Security Program. This year it was 3.1 percent and it is estimated to be the same next year. SB 101 suspends the COLA that would be granted on January 1, 1994. The second major aspect of the bill is to impose a rateable reduction of the AFDC Program. Ms. Hansen noted that the rateable reduction is a federal term for when you are paying a household less than the amount that has been determined that they need. The AFDC Program is a federal program and must be operated within federal guidelines. The federal government provides that every state will set a standard of need. So the state determines how much a poor family, who qualifies for benefits, needs. The state then decides the level at which they will pay those families. Ms. Hansen said Alaska has perhaps always paid 100 percent of the need standard. Most states pay a percentage of the needs standard. The reduction in the bill would return the level of AFDC payments to the level that was in effect in 1991. The current AFDC payment for a family of three pays 77 percent of the poverty guideline for Alaska. The proposal would reduce the amount that a three person family was paid to 70 percent of poverty in Alaska. That reduction would still place Alaska either as the top paid state or possibly the second. Ms. Hansen said in October, 1990, Alaska adopted an unemployed parent component of the AFDC Program by federal requirement. When the state did that, the standard that we paid a unemployed parent family, which has two adults, was different than the standard that we were paying to a AFDC basic household with one adult. A slightly larger increment was given for the second adult than they would have received if that second person was a child. Ms. Hansen referred to SB 101 and said the payment standard which would be paid to a three person household (mother and two kids) would be the same as what would be paid to a three person household consisting of mother, father, and one kid. She said there is about a $90 difference between what is being paid to a one parent family and the two parent household of the same size. The rateable reduction for a three person family is $60 dollars. So a three person household would get just the rateable reduction and would have a $60 dollar actual cash difference from June, 1993, to July. A two parent family would have a reduction of approximately $150 dollars because there would be both the rateable reduction and the change to create the equity for the two different household within the AFDC Program. Ms. Hansen said there would be about $12.6 million savings to the AFDC Program by restructuring the payments. Number 186 Ms. Hansen referred to the Adult Public Assistance (APA) Program and said the bill proposes a suspension of the COLA and there is a rateable reduction. In the Adult Public Assistance Program, the bill would roll the payments back to the 1990 level. The program currently pays families at a higher percentage of poverty than is paid in the AFDC Program. Currently, a single adult on the APA Program would receive 111 percent of poverty guideline. With the reduction it would roll back to 104 percent of the poverty guideline. Another change relating to the APA Program is the elimination of some retroactive coverage for adult public assistance. When a disabled person makes application for federal supplemental security income (SSI), the state pays an interim assistance benefit while that application is being processed by the federal government. She noted the applications can take anywhere from four months to a year to process. After they have qualified, the state supplements the payment until they begin to receive it under the SSI Program. For a single individual the payment would be $808 dollars. Ms. Hansen said the proposal in SB 101 is when a person applies, and before the federal government determines them eligible, the state pays them an interim assistance benefit. When the federal government finds them eligible and pays them a lump sum for all of those months while their application was pending, the state would collect from that lump sum what was paid out by the state for the interim assistance amount. The remainder of that lump sum would go to the client and their eligibility for public assistance would continue from that date forward. She noted it is a common agreement which other states have executed. Ms. Hansen said the savings would account for approximately $5.1 million. Ms. Hansen referred to section 2 of the bill and said there is a typo where it references "AS 47.24.320(d)," it should actually be "AS 47.25.320(d)." Number 260 SENATOR DUNCAN asked what the total general fund reduction would be. Ms. Hansen said the reduction in the AFDC Program is $12.6 million of which half is federal and half are general funds. She referred to the APA Program and said the reduction is $5.1 million all of which is general funds. Senator Duncan asked if the general fund reduction is about $11 million. Ms. Hansen agreed. Senator Duncan asked how many clients will be affected. Ms. Hansen said the entire caseload of AFDC clients would be effected. In FY 94 the caseload is projected to be at 13,858. Currently, FY 93 averages at 11,482. The COLA reduction would apply to the entire case load. The rateable reduction would apply to the entire caseload. The rateable reduction alone, applies to the 11,482 AFDC basic households - one parent AFDC families. The larger cut from both the rateable reduction and to creating the equity between AFDC basic and AFDC unemployed would apply to 2,376 unemployed parent households. Ms. Hansen noted there is a small change to the needs standard for cases in which there are "adult not included" cases. That is where the child is living with a non-needy relative. The amount for one child is increased and the amount is decreased for two children in a cost neutral change. It brings the state into compliance with the federal government. The projected case load for next year, for adult public assistance, is 9,664. Number 312 JOHN SHAFER, testifying from Sitka, was against SB 101. He said he is concerned but not for himself as he has never received public assistance. He said he is concerned about a society that would not adequately fund people who could be characterized as some of the most vulnerable people in the society. He urged that the committee influence the administration to restore the funds and to maintain some support for people who need help. NOVA BLAZEJ, of Bethel, testified against SB 101. She said in the rural communities it is difficult for people to find jobs. She said she feels that energy could be better directed by not cutting funding, but by putting more of an emphasis on locating and generating jobs. She thanked the committee for listening to her. CLARA KELLY, also testifying from Bethel, said being out in the villages is like traveling to the third world. There aren't any jobs whatsoever. There are a few for school teachers, the store keeper, or city employees. There are absolutely no jobs for young people. She said it is sinful to think about cutting AFDC or any similar funding. Ms. Kelly urged everyone to make positive plans. PATRICK CUNNINGHAM was next to testify from Anchorage. He said he is representing approximately 400 professional social workers who are members of the Alaska Chapter of the National Association of Social Workers. Mr. Cunningham spoke against SB 101. The bill proposes to save the state money, however the effort is ill conceived on the part of the Hickel administration. It will result in more costs to the state. The Division of Public Assistance is the anti- poverty agent in charge of responding to the needs of the poor. Yet their major proposal is to move poor citizens deeper into poverty. Poverty is violence and SB 101 is a deliberate attempt to inflict more violence upon Alaska's poor. Mr. Cunningham said the claim that the bill will save money is inaccurate. At the present time, only 930 of the over 13,000 families on the AFDC case load are receiving services from this program. He suggested that the Division of Public Assistance follow the lead of many states that are applying for waivers from federal requirements to establish welfare self-sufficiency programs. It would maximize the opportunity to substantially reduce case loads. Reducing case loads is where the savings will be, not in lowering benefits. Mr. Cunningham urged the committee not only to reject SB 101, but to create legislation targeting the elimination of poverty in the State of Alaska. Number 414 MARIANNE KERR, testified from Anchorage. She said she is representing Abused Women's Aid In Crises (AWAIC) which is a battered women's shelter in Anchorage. Ms. Kerr urged that the committee defeat SB 101 as it is an attempt to balance the budget on the backs of those who can least afford it, low income women and children. She explained that AWAIC shelters are for women who have taken their children and come to them because of a lethal home situation. Many women return to their same dangerous home because of the economic reality in Anchorage. Transportation is difficult and expensive, there is a serious lack of affordable child care and a lack of low cost and affordable state housing. She said the reality is rents won't decrease on July 1st, they will probably go higher. Ms. Kerr said everybody who is concerned about their communities advocates budget reform, however, the budget cuts need to be equitable. There are ways to do that but not at the expense of those who can least afford it. Number 436 The next person to testify was KAREN PERDUE, from Fairbanks. She said she has had the opportunity to work with some of the committee members in the past as the Deputy Commissioner of the Department of Health and Social Services. She said she wants to speak against SB 101 as it proposes seven statutory changes and is virtually everything the state can legally do to reduce benefits. The impact on each of the cuts has been well studied over time, but the combined impact of the cuts, both on the economy and on the daily lives of about 44,000 Alaskans that would be impacted, is not known. Ms. Perdue said if enacted, the cuts to AFDC will probably be the largest cut enacted in this country in recent times. Ms. Perdue said there is an impression that many states have drastically cut AFDC benefits, but last year just six states enacted reductions to AFDC benefits. No state has enacted a cut as large as the one before the committee today. The issue isn't really how big our benefit is versus other states, it is the rate of reduction that the committee is looking at. Ms. Perdue said she would send the committee her testimony in writing. Number 457 ROBIN WICKHAM, testifying from Fairbanks, was against SB 101. One concern is for the possible repercussions that could result if dollars are cut from the APA and the AFDC Programs. Far too many individuals and families are already struggling on the current insufficient amount they are given each month. Nationally, we are all going to be forced to give more monthly income in the form of increased taxes. As Alaskans, we know that we are going to bear the brunt of this because of proposed increases in gasoline and fuel oil prices. She said it is incomprehensible to reduce benefits and strongly urged the committee not to do it. CONSTANCE GRIFFITH, testifying from Ketchikan, spoke against SB 101. She said she concurs with everything that has been said against the bill. Ms. Griffith said people are reliant on the income they presently receive. Their landlords expect them to pay rent. They know just how much milk they can buy for their children. They know exactly how much money they have for clothing. When cuts are made, it not only affects the families but also the people from whom the families purchase what they require. Ms. Griffith said there are many many tax breaks that wealthy people get and nobody ever complains about those. She urged the committee not to pass SB 101. Number 495 ANN PENCE, testifying from Kenai, said she would like to voice her opposition to SB 101. Often the case is women and children are the first victims of budget cuts. She said she understands the legislature's commitment to keeping state spending within reason, but she believes an under nourished child becomes a child who cannot learn. A child who cannot learn becomes an unproductive member of society and will probably end up needing assistance from a state or government agency to meet basic financial needs. She said she has heard the argument in favor of cutting assistance benefits and the COLA increases to those benefits as the lower 48 states don't provide a lower amount of assistance. She has heard that Alaska attracts people because of its generous public assistance programs. Ms. Griffith continued to give testimony against SB 101 and urged that the bill not be passed. SENATOR ELLIS said according to the division's research, people don't move to Alaska because they shop around and compare benefits across the country. They move here because of family members, because they used to live here, or because they were told there were jobs here. He said there are several different reasons why people move to Alaska. The reasons given by supporters of the bill are the benefits have to be cut is because every welfare case in the U.S. will be attracted to Alaska. Also, a comment made often by supporters of the bill is that poor people don't vote so what do we have to worry about in terms of political repercussions of cutting the budget with that group. JAYNE ANDREEN, Executive Director, South Peninsula Women's Services (SPWS) in Homer, testified against SB 101. She said she is very concerned about the cuts. It is her understanding that the poverty level is what has been determined as being the bottom line for what is needed for a family to cover its basic living needs. Our AFDC level is at 77 percent of the poverty level so people are already living below what is needed for their basic needs. It seems like cuts go first to women and children and that is the place that we can least afford to do it. She thanked the committee for listening to her. Number 544 ELLA CAREY-STARR, Southeast Alaska Regional Health Corporation (SEARHC), testified against SB 101 from Haines. She said it is very wrong to punish disabled people, women and children by cutting their benefits. The legislature needs to look at restructuring the entire public assistance program to institute training, education, and community service programs to get people off of public assistance programs. She thanked the committee for letting her testify. CHERYL PHILLIPS, testifying from Haines, said she is in opposition to SB 101. She indicated she is a single mother, divorced, and isn't receiving child support. Ms. Phillips said three years ago when her wages from crewing and gillnetting ran out, it became apparent that filing for AFDC was her only option. Since then, she has worked as a waitress and cashier but never made a wage where she didn't require some help. Ms. Phillips said since her layoff as a cashier last fall, between unemployment and AFDC, she has received $845 per month. She said she doesn't see how she can get by with less. Ms. Phillips said she rents a room for her and her son and shares kitchen and bath facilities with two couples. Ms. Phillips urged the committee to find other ways to save money as she can't afford the proposed cuts. Number 580 CONNIE SIPE, Executive Director, Older Alaskans Commission, said old age assistance is, by state law, a part of adult public assistance for the aged, blind, or disabled. The bill would roll back the monthly benefit checks to poor seniors and disabled adults by as much as $36 per month. TAPE 93-22, SIDE B Number 001 Ms. Sipe said the affect of the roll back to the 1990 assistance levels will also push about 325 poor seniors off the assistance program altogether. Nearly 14 percent of all Alaskans over age 65 are recipients. She noted that there are 3,854 senior Alaskans who receive old age assistance. Nearly 14 percent of all Alaskans over the age of 65 are recipients of old age assistance. Many other adults in the 50 to 65 year age group are chronically disabled by blindness and other health conditions and they rely on adult public assistance as do other younger disabled people. Ms. Sipe said there is a federal process for determining permanent disability which is very onerous and over 40 percent of the people are disqualified and do not receive that assistance. In addition to just the basic economic necessities of life covered by an assistance check, many seniors and all disabled adults who are under age 65 are not covered by Medicare for their health care. Alaska has a high proportion of seniors who never registered in the social security system enough quarters to qualify for Medicare coverage or social security payments. Ms. Sipe continued to give testimony against SB 101 and urged the legislature to rethink the bill and to delete all sections reducing benefits to aged, blind and disabled adults. ELLEN NORTHUP, Director, The Glory Hole, said she deals daily with people who have little or no money and the elderly and disabled. She said there are people who work in places like Burger King who will work two weeks and come to her for help in cashing their pay check. They cannot afford a bank account because you are required to have a minimal amount to open one. She said those people will have worked two full weeks, eight hours a day, and take home about $241.00. Ms. Northup continued to discuss hardships encountered by those people. She said that her organization doesn't receive money from the state or federal government. They receive money strictly from churches, individuals, and foundations. It costs $12 thousand per month to run the Glory Hole. She discussed the high cost of rents in the Juneau area and the long list of people who have applied for Section 8 housing. Ms. Northup urged that the committee vote against SB 101. Number 058 GEORDIE CARROLL was next to testify. He indicated he has a disability and feels that the proposed benefit cuts would be ineffective because many people depend on the benefits. The cuts would jeopardize people's lives by limiting the ability for them to live. The COLA increase helps to give people more money to spend on their survival and many people depend on the benefits for surviving. LINDA LINSON, Advocacy Services of Alaska, explained her organization does advocacy for people with disabilities. She said statistics do not show that people come to Alaska to receive public assistance benefits. Ms. Linson discussed a phone call she received from a person looking for some kind of option for her son because her benefits are being cut and she can't afford to keep her son at home anymore. Current statistics show that 65 percent of families on AFDC are on for two years or less. That is what welfare is for, to help people who need a little bit of help transitioning through hard financial times. JOY DAVIS, Anchorage, was next to testify. She said she works for Access Alaska but would speak on behalf of her own situation. She said she experiences a disability, is eligible for adult public assistance and AFDC as she has two small infants and a foster daughter. The proposed cuts to adult public assistance and AFDC is approximately one-tenth of her budget. She said she is in the situation where she does have a part-time job and can supplement her income where a lot of people on public assistance programs are not able to do that. She said the proposed budget cuts are not appropriate. Number 118 CHRISTINE PHILLIPS, testifying in Juneau, said she is an AFDC recipient and receives $845 per month and $64 per month in food stamps. She said she pays rent, utilities, medical bills that Medicaid doesn't pay, transportation, food that the $64 doesn't cover. She noted she has a 14 year old daughter. Ms. Phillips said she can't take the cuts and they aren't fair. HUGH DOOGAN, testifying from Fairbanks, was against SB 101. He said he doesn't feel that people's benefits should be cut. Alaska has the assistance programs for very good reasons. He said he is retired but is fortunate as he has been able to work and support his family. Mr. Doogan said there are some things that need to be done and one is that if a woman and child end up on public assistance, whether they are single or married, it is still an obligation of the male to take care of his responsibility of bringing those children into the world. He referred to child support payments and said the courts should include COLA increases. Ms. Doogan said he believes that when a women who is on public assistance becomes pregnant, she should name the father and go after him for the costs. If they can't get any money from the father, it should be taken out of his permanent fund checks. SENATOR ELLIS referred to Mr. Doogan's comments regarding some people being deeper in poverty because of the obligor parent not paying child support and said there is a proposal being pushed in the legislature for closing the Fairbanks and the Juneau Child Support Enforcement Offices. That would probably set back efforts in getting children what they deserve under court orders. Number 172 EVELYN NAVARRO, testifying in Juneau, said she receives $808 per month and $620 of that goes to rent. She said she eats lunch at The Glory Hole. She said she is trying to get ahead and it seems like she is going backwards. Ms. Navarro said last year she was homeless and lived at The Glory Hole. She has been in and out of the hospital and is currently waiting for surgery to be done on her knee. Her daughter lives with her, is attending adult education classes, and receives $169 per month in food stamps. She discussed her current living conditions and said she doesn't see how she will survive with the cuts to the public assistance programs. VICKY BORREGO, Legislative Liaison, Catholic Community Service (CCS), explained that Bishop Michael Kenny is traveling but did want to share his concerns regarding SB 101. A major theme of CCS is a strong commitment to advocate for public policies and programs which meet basic human needs and promotes self sufficiency and independence. Ms. Borrego said they feel SB 101 does not promote greater self sufficiency, independence or empowerment. It reduces an already extremely spartan monthly benefit even further. She said instead of punishing the recipient of public assistance benefits, including the elderly disabled adults and dependent children, why not identify and quantify the basic problems contributing to the need for public assistance such as some of the recommendations that have appeared in Governor Hickel's Organizational Efficiency Task Force Report published in July, 1992. The report may be a possible solution. She urged that SB 101 not be passed. CHARLES WHEATON, of Juneau, said he is representing his family. He read the following letter that was recently published in the Juneau Empire: To the House Finance Committee: Please think twice about taking more money from my step kid's welfare. These AFDC grants they are entitled to are already cut each month because I am unemployed and the state welfare takes money from my unemployment benefits. Out of the $720 I receive each month, $200 gets taken out to pay off an old AFDC debt. The $200 we never see is counted each month as income on my wife's AFDC grant. So the welfare takes dollar for dollar from her kids this month. They, or we as a family of five, receive $130 in food stamps, or about $32 a week to try to spend on food. And a $170 check to pay $415 rent. My unemployment insurance is $520. I am fighting the state to pay child support. Yes, that's right. I can't pay child support. The state takes it from my kids. $426 is my support order that was entered on default by the same judge who put me in jail for two years a month earlier. I strongly believe in the child support payments. The welfare is taking funds and food away from my two new step-kids. What more do you guys want? Welfare is to help people in need and give them a second chance, something my new family isn't getting. So wake up, you guys. You try to live off $35 a week with your families and growing kids. We're a family of five people, taxpayers also. We're a family of five people, taxpayers also. We will remember you at election time. Mr. Wheaton urged that SB 101 not be passed into law. Number 253 DARRYL GUTHRIE, Human Services Department, Tlingit and Haida Central Council, testified against SB 101. He said he runs the General Assistance Program. The capacity of his workload includes about twelve villages and communities. If people don't qualify for AFDC, they probably qualify for general assistance. In February, there were 189 cases out of the twelve communities. There is already a loss of pride and dignity and SB 101 is another slap in the face for the people who are suffering the most. He said he is opposed to SB 101 and urged the committee to vote against the bill. SHERRY GOLL, representing Alaska Women's Lobby and KIDPAC, spoke in opposition to SB 101. She said the cuts will hurt 23,000 children, 9,000 elderly and disabled, and 89 blind. Ms. Goll said 350 elderly people will lose their benefits completely and may or may not lose their eligibility for Medicaid. There are also 31 children who fall into that category. She gave committee members a draft document that gives an idea of the distribution of the citizens in Alaska's communities. Ms. Goll referred to the needs standard and said we are meeting it today but will not be meeting it any longer if the legislation is to pass. She said sometimes she hears people talking about other assistance programs, food stamps, housing assistance, etc., and said in the community of Juneau there is a three year waiting list for public housing. Public housing is not available to everyone on public assistance. Food stamps do not begin to meet the needs of a family and can only be used for basic food items. Ms. Goll said a bus pass costs $40 per month. If the goal is to reduce the need for public assistance, we have to look at things such as increasing child support enforcement, and the Jobs Program. She urged the committee to try and reach a compromise on the bill and not to accept all the cuts in one year. Ms. Goll continued to testify against SB 101. CINDY SMITH, Executive Director, Alaska Network on Domestic Violence, said her organization has opposed cuts to the AFDC and APA Programs. They are opposed because of concerns about immediate safety in terms of escaping from violent relationships and because the cuts to marginally stable people will put them on the street. She said when a rateable reduction is made, women will be juggling their bills and eventually won't be able to pay them. When they can't pay them, they will be on the street. There are particularly severe problems in Anchorage and Fairbanks with rape and sexual assault of women who are homeless. The shelters don't have any bed space left and they have been over capacity for a year and a half. She urged increased job training, child support enforcement and the reviewing of non-needs based programs. Ms. Smith urged the committee to not pass SB 101. CHAIRMAN RIEGER said the bill would be heard again at a later date.