Legislature(1993 - 1994)

04/18/1994 01:39 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 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                
 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                    
 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               
 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.                                

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