Legislature(1993 - 1994)
04/18/1994 01:39 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CHAIRMAN RIEGER introduced HB 409 (AFDC DEMO PROJECT AND DECREASE) ) as the next order of business before the committee. REPRESENTATIVE MARK HANLEY, Prime Sponsor, felt that the best way to reduce welfare is to get the individuals off the welfare system. He said that there are basically three portions to HB 409. The first portion of the bill removes disincentives for people on welfare to work while providing additional incentives for people on welfare to work. He explained that under the current welfare system, individuals are only allowed to keep $50 of what they earn; for the first four months they are on welfare, they get to keep one-third of their earnings. After the first four months, they are allowed to keep $50 of their earnings which results in a tremendous disincentive to work. He pointed out that under HB 409, the individual would be allowed to keep $200 of their earnings and the four month period is extended to two years which would benefit the individual on welfare and the state. He informed the committee that under the current welfare system, there is a maximum vehicle allowance of $1500 which is increased to $5000 under HB 409. Representative Hanley pointed out that the Workfare provision requires that individuals receiving AFDC assistance participate in 10 hours a week of paid employment or 21 hours a week of uncompensated community service work. He noted that the other main portion of the bill is the rateable reduction which is similar to last years. There are costs in administering and monitoring the program. He indicated that many individuals on the program have difficulties with transportation and child care. A portion of the cost for HB 409 is paying for that transportation and child care. He stated that he anticipated savings in the program over the long- term which would benefit everyone. SENATOR ELLIS asked if Representative Brice's resolution regarding the 100 hour rule waiver and Senator Leman's resolution regarding the department's authority with applying for waivers would be duplicated by HB 409. REPRESENTATIVE HANLEY stated that Representative Brice's bill requested a waiver of the 100 hour rule for all states. HB 409 would be an individual application from Alaska to the federal government on these applications while directing the department on the composition of the application. Representative Brice's resolution is a request to apply the 100 hour rule waiver for other states to all states. Number 396 SENATOR ELLIS explained that the 100 hour rule would more than likely be the first to go for all states under welfare reform. He inquired as to the timing of this waiver process and the cost involved in applying for waivers which may end up being granted at the federal level. REPRESENTATIVE HANLEY stated that some of these waivers which have been granted in other states would not need a lot of money in the application or granting process; the 100 hour rule is one of those. Representative Hanley noted that HB 409 is a package of what the department feels would be granted. SENATOR ELLIS inquired as to who decides which individuals do compensated versus uncompensated work. REPRESENTATIVE HANLEY explained that the client would choose and there are some job search skills; however, it is not a jobs program with lots of training. HB 409 is structured with an incentive to do compensated work; an individual is required to do less paid work than uncompensated work. SENATOR ELLIS asked if Representative Hanley had summed up last year's rateable reduction. He inquired as to the impact of a monthly AFDC check. REPRESENTATIVE HANLEY said no, but deferred to the department. SENATOR SALO inquired as to the scope of these pilot projects. REPRESENTATIVE HANLEY indicated that he would prefer to do them on a statewide basis, but the federal government has certain restrictions. These are demonstration projects which require a test group and a control group within each area. Representative Hanley pointed out that there are four test areas: Anchorage, Mat- Su, Fairbanks, and the North Slope Borough. Representative Hanley did not have the specific numbers in front of him. SENATOR ELLIS asked if the rateable reduction would apply to everyone in the state. REPRESENTATIVE HANLEY said yes, a rateable reduction would be used to pay for something which does not benefit everyone. There is no way around the federal requirements. Representative Hanley noted that one of President Clinton's proposals for welfare reform would tax the welfare benefits in order to pay for the program. SENATOR ELLIS stated that President Clinton's proposal applied a funding mechanism to everyone in order to get people off welfare which is not exactly the same. REPRESENTATIVE HANLEY agreed. SENATOR MILLER moved to adopt the Lauterbach 8-LS1211\M CS in lieu of the original bill for discussion purposes. SENATOR ELLIS objected in order to identify the changes the CS encompasses. REPRESENTATIVE HANLEY pointed out that the only difference between the CS and the original bill is that the CS has temporary sections of law due to a drafting technique; there is no essential impact to the rateable reductions. The temporary sections specify that the reductions are to be repealed after the project ends. Hearing no objections, the CS was adopted. Number 289 SHERRIE GOLL, Alaska Women's Lobby, stated support of efforts to assist welfare recipients to become independent of the system; however, the Alaska Women's Lobby does not agree that a workfare program is the most effective manner in which to achieve independence. She expressed concern with the rateable reductions, especially the second year of these which would effect every welfare recipient in the state. The waivers would not effect everyone in the state. She urged consideration of the Adult Public Assistance (APA) cuts; APA recipients are aged, blind and disabled people. These people would not benefit from workfare or AFDC waivers. She noted that no other state who has executed welfare reform has chosen to reduce benefits to APA recipients. She urged the committee to eliminate the section on APA, to not increase AFDC cuts, and use the savings from reducing benefits to all individuals from last years program in order to assist in the cost of this legislation. Ms. Goll expressed concern with creating another bureaucracy for the workfare program. In particular, the data processing system would be under tremendous pressure when all these alternative systems were reviewed which could develop problems in accuracy that translates into cost. She said that the Women's Lobby supports this kind of program; they would like to place the funding in the job's program specifically for uncompensated work. She reiterated the need to delete the APA section. BOB ZIBELL said that funding for the AFDC portion of the bill would come partially from APA benefits. APA is composed of the elderly, blind and disabled individuals. He was opposed to taking money from the APA section to fund welfare programs. He pointed out that Senator Leman's bill does not take funding from APA. He suggested that attempts to get individuals off welfare should be funded by money from AFDC or DHSS. He did not understand how AFDC and APA could be mixed together in the first place; a person does not become blind, elderly or disabled voluntarily. The two programs are different; one involves a choice while the other does not. He reiterated his opposition to APA bearing part of the burden of funding AFDC. SENATOR ELLIS asked if Mr. Zibell realized that the legislature voted to cut the monthly benefits for APA. BOB ZIBELL said that he realized that. Number 193 KAREN ROBINSON, League of Women's Voters, appreciated the work Representative Hanley had given the bill. She said the league agrees with the goal of reducing welfare participation; however, they are concerned with the direction of HB 409. Welfare recipients faced cuts last year and it would not be in the best interest of the state to cut welfare recipients again this year. She expressed concern with the cuts to APA who would not benefit from this program, but they would help fund it. She offered to work with the legislature and Representative Hanley on welfare reform. She was concerned that the jobs program is under funded. The jobs program which is already in place should be funded at a level to get the maximum number of participants in the program. She expressed the need for the legislature to move slower and review programs which would met the goal of the sponsor, to get people off welfare. SENATOR LEMAN suggested that if the legislature moved any slower nothing would get done this year. KAREN ROBINSON reiterated that from the League of Women's Voters point of view, the legislature place HB 409 in an interim committee to work with the various groups involved with welfare. Without health care reform or money for child care, people would not be able to get off welfare. Ms. Robinson noted that a national study illustrated that even if a person works on minimum wage for forty hours a week, they earn approximately $8000. That amount of money is not enough for a family of four to get off welfare. Ms. Robinson felt that the sponsors goal was appropriate, but more work needed to done. The league does not believe that the workfare program will get people off welfare and working. Ms. Robinson felt that the workfare program would put mothers and fathers to volunteer work instead of being with their children while looking for a meaningful job. SENATOR LEMAN disagreed with Ms. Robinson's conclusions. He did agree with her stated goal of reforming welfare. KAREN ROBINSON emphasized that the League of Women Voters believe that welfare as well as reform must take place. She mentioned that the programs started under the Reagan and Bush administrations are just beginning to take effect. Those programs should be fully funded in order to know the real outcomes of the programs. Number 105 SENATOR SHARP was worried because the last welfare reform raised costs by approximately 210 percent and is still increasing. KAREN ROBINSON thought that increase was due to the inclusion of two parent families. SENATOR SHARP stated that had not happened. SENATOR ELLIS inquired as to the monetary impact of this bill on an APA recipient or an AFDC child as well as last year's rateable reduction and the proposed rateable reduction in HB 409. JAN HANSEN, Director of Public Assistance, said that HB 67 which reduced AFDC and APA reduced a household of three by $27, from $950 to $923. Two parent families had a $90 reduction over the $27 reduction, a total of $117 reduction. APA recipients face approximately an $11 reduction. She said that this year's reduction proposed by HB 409 would be around $12 for AFDC and $5.45 for an APA family. SENATOR ELLIS noted that there are proposed cuts for the jobs program by the Senate. He inquired as to the proposal of the House Budget regarding the jobs program. JAN HANSEN explained that House Budget has an increment in to add staff in order to include the required federal increases. They have to serve more people. Ms. Hansen pointed out that there was a $200,000 General Fund increment as well as travel and health benefit increases which total $215,000. SENATOR ELLIS asked if the House proposal goes through the process, would the jobs program still be significantly under funded and the federally mandated goals for participation would not be met. JAN HANSEN agreed that Senator Ellis' scenario was a possibility and if the increment is not received, then some reassessments will have to be made in order to be able to meet the numbers. Ms. Hansen was skeptical that the department would be at a level of funding to meet the numbers. SENATOR ELLIS inquired as to the dollar tradeoff of money invested in the jobs program where even the volunteers cannot be served versus money invested in these pilot projects; is one better than the other. TAPE 94-33, SIDE A Number 008 JAN HANSEN explained that part of HB 409 does what the jobs program does, the workfare provision is similar to a component in the jobs program. A two parent family would have to do the same as under the workfare provision of HB 409. This expands the workfare component of the jobs program, but HB 409 does not expand other components which effectively work towards giving people training. She noted that the last amendment before HB 409 passed the House requires that the workfare component be contracted out which increases the cost. Ms. Hansen pointed out that HB 409 would give a waiver of the 100 hour rule which is currently a hinderance. She agreed that a waiver of the 100 hour rule would be easy and inexpensive; however, the earnings incentives which are important, become more expensive due to the computer programming. In conclusion, she felt that they would get the same results for the money with the jobs program; however, the components in HB 409 would not be tested. She stated that if more money was put into the programs in a specific manner then the same net result would happen. She felt that if she was given the amount of money in the fiscal note and the state rules and regulations were eliminated, she could fully staff and obtain a few waivers while upgrading the jobs program which would give the desired results. She also believed that HB 409 would deliver benefits in the long run; however, the question remains: is the timing right? Number 097 SENATOR ELLIS asked Ms. Hansen to clarify her statement that contracting would increase costs more than going through existing public assistance programs. JAN HANSEN said yes, there are areas in which one in-house employee does the job which under contracting would have two or three employees do. Ms. Hansen also mentioned that someone in-house would be required to operate and monitor the contract. Ms. Hansen informed the committee that most contractors do not require the same amount of productivity from an employee as does the division. CHAIRMAN RIEGER held HB 409. SENATOR ELLIS passed out an amendment which is a model from Hawaii which Ms. Hickel supports. He hoped this would be a bipartisan matter. SENATOR LEMAN distributed his amendments. He did not feel that HB 409 goes far enough, but it is going in the correct direction in order to place more money in the pockets of those who need it while decreasing governmental dependency. He commended HB 409 and hoped it would be dealt with in a bipartisan manner.