Legislature(2001 - 2002)

04/10/2002 01:52 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
VICE-CHAIR  LOREN  LEMAN called  the  Senate Health,  Education  &                                                            
Social Services Committee  meeting to order at  1:52 p.m. Senators                                                              
Wilken, Ward  and Leman were  present. Vice-Chair  Leman announced                                                              
that  Chairwoman  Green  was  ill.  He  then  announced  that  the                                                              
committee  would take up  CSHB 402(FIN)  and asked  Representative                                                              
Dyson to present.                                                                                                               
SENATOR WARD asked if CSHB 402(FIN)  leaves the cap at 20 percent.                                                              
REPRESENTATIVE FRED  DYSON, Chair of  the House Health  and Social                                                              
Services Committee, made the following statement.                                                                               
        That limit is certainly a contentious issue. The                                                                        
      Department [of Health and Social Services] wanted to                                                                      
     take the  limit off entirely and  it all has to  do with                                                                   
     the limit and the percentage  of recipients who can have                                                                   
     their benefits  extended past 60  months - which  is not                                                                   
     only  the  federal but  our  state's requirement  -  the                                                                   
     department  wanted to  take  that off  entirely and  can                                                                   
     make an, I  think, eloquent case for that  and they were                                                                   
     basically  saying trust us,  we don't  want to make  the                                                                   
     people  dependent, we don't  want to  carry them on  the                                                                   
     roles  but   there  are  some   hard  core   folks  with                                                                   
     disabilities  and other problems  that just can't  go on                                                                   
     to self-sufficiency.  I was uncomfortable doing  that. I                                                                   
     think that under Mr. Nordlund's  administration my sense                                                                   
     is  that  it  would  work  to  not  carry  anybody  that                                                                   
     shouldn't be and so on. I didn't  feel comfortable about                                                                   
     taking the limits off. I made  a guess of what I thought                                                                   
     might  be the  number  or the  percentage  of hard  core                                                                   
     unemployed who  will continue to need the  [indisc.] and                                                                   
     in House  Finance I made that  change to 33  percent, up                                                                   
     from the present 20. Sandy Hoback  here from Oregon, who                                                                   
     has  an immense amount  of experience  said pretty  good                                                                   
     guess. They found in Oregon  that over the years about a                                                                   
     third  of the  folks could  not  achieve complete  self-                                                                   
     sufficiency - a judgment call.                                                                                             
VICE-CHAIR  LEMAN  asked if  there  was  any technical  basis  for                                                              
deriving the 33  percent based on Alaska's caseload  or whether it                                                              
was  based on  Oregon's  experience. He  said  he looks  at it  as                                                              
asymptotically  coming to  a number  and is  wondering if  someone                                                              
went through an exercise to come to the 33 percent.                                                                             
REPRESENTATIVE DYSON said it was  based on Oregon's experience and                                                              
noted the  department  has held the  position  that it prefers  no                                                              
SENATOR  WARD  asked  if  there will  be  any  damage  during  the                                                              
upcoming election if the 20 percent is maintained.                                                                              
REPRESENTATIVE DYSON  said that the  department says it  will have                                                              
clients reaching the  60-month limit this summer and  that some of                                                              
them should  have continued benefits  but may bump up  against the                                                              
20 percent.   He asked  that the department  argue that  point. He                                                              
said he has  held the position that  if he is re-elected,  he will                                                              
be paying attention  to whether the number needs  to be changed in                                                              
the future.                                                                                                                     
SENATOR WARD said he agrees with that position.                                                                                 
REPRESENTATIVE DYSON said it looks  to him like the department has                                                              
done  a pretty  good  job of  getting people  off  of welfare.  He                                                              
explained that the  main portions of CSHB 402(FIN)  create another                                                              
paradigm shift in how the business  of welfare is done.  Under Ms.                                                              
Hoback's  administration in  Oregon,  the culture  of welfare  was                                                              
changed  to work  first, rather  than what  benefits clients  were                                                              
eligible for.  He believes lumping  cash benefits and  food stamps                                                              
into a fund to  subsidize employment to be a  profound change. The                                                              
State of  Oregon took  the initiative  to subsidize  jobs to  help                                                              
people  learn a  trade and  get employed.  That  is a  significant                                                              
departure  from what  most states  have done.  He is pleased  that                                                              
this  Administration,  particularly Mr.  Nordlund,  has gone  from                                                              
being reluctant to enthusiastic.  Another change that the State of                                                              
Oregon  made,  which  he  considers  to  be  genius,  was  to  pay                                                              
contractors for performance instead  of shuffling papers. He noted                                                              
CSHB  402(FIN)  will allow  the  department  to do  those  things.                                                              
Although he  shares Senator  Ward's concern  about the  20 percent                                                              
limit,  the importance  of CSHB  402(FIN) lies  with the  paradigm                                                              
shift in how temporary assistance is administered.                                                                              
VICE-CHAIR  LEMAN  said that  Representative  Dyson  inadvertently                                                              
gave credit  to what  the legislature has  done with  its missions                                                              
and  measures   directive.  It  told   this  department   how  its                                                              
performance would be measured and the department followed-up.                                                                   
SENATOR WARD commented  that CSHB 402(FIN) is a fine  step that he                                                              
completely  endorses.   He  said  he   also  knows  that   if  the                                                              
legislature does  not keep  the pressure on,  things may  not work                                                              
out as the legislature intended.                                                                                                
1:50 p.m.                                                                                                                       
MS.  SANDY HOBACK,  a consultant  with the  American Institute  of                                                              
Full Employment,  a non-profit corporation, informed  members that                                                              
the  Institute  did  an  assessment  of  Alaska's  welfare  reform                                                              
efforts last  summer and made a  number of recommendations  at the                                                              
request of Senator  Green and Representative Dyson.  The statutory                                                              
recommendations   are  incorporated   into   CSHB  402(FIN).   The                                                              
committee  has heard a  similar bill  on this  topic, SB  346. The                                                              
only difference  between the  two bills  is the cap.   The  cap in                                                              
CSHB 402(FIN)  was changed from 20  to 33 percent. She  has worked                                                              
diligently  with   Representative  Dyson's  and   Senator  Green's                                                              
offices  on  drafting   these  bills  and  negotiating   with  the                                                              
department on parts  of it. She commented that  the department has                                                              
made a  number of  concessions to  get us to  this point,  and she                                                              
applauds department staff for their  efforts in not only embracing                                                              
the  statutory   changes,  but   for  embracing  the   operational                                                              
recommendations  in  the report  to  make  this system  much  more                                                              
accountable. She offered to answer questions.                                                                                   
SENATOR  WARD commended  all  involved  but repeated  his  concern                                                              
about increasing  the cap  to 33 percent.  He asked what  harm, if                                                              
any, will be done to any Alaskans  between now and next January if                                                              
the cap is returned to 20 percent.                                                                                              
MS. HOBACK replied that based on  the department's projections, it                                                              
is not predicting it will hit the 20 percent ceiling.                                                                           
SENATOR WARD said that was his reading.  He thanked Ms. Hoback and                                                              
those involved  for taking a complex  subject and putting  it into                                                              
an easily understood format.                                                                                                    
VICE-CHAIR  LEMAN referred to  a chart  of DHSS's projections  and                                                              
agreed that the  increase to 33 percent is not  necessary for this                                                              
next fiscal year.                                                                                                               
SENATOR WARD said it may be necessary the following year.                                                                       
SENATOR DAVIS arrived.                                                                                                          
VICE-CHAIR LEMAN thanked Ms. Hoback  and asked a representative of                                                              
the Department of Health and Social Services to testify.                                                                        
MS. ELLIE FITZJARRALD, Chief of Policy  for the Division of Public                                                              
Assistance, said the  department has made a number  of concessions                                                              
to support the  legislation before the committee but  it will need                                                              
to reconsider if further amendments are made.                                                                                   
VICE-CHAIR LEMAN asked  Ms. Fitzjarrald if the  department did any                                                              
calculations  to  cause  committee  members  to  believe  that  33                                                              
percent is an appropriate number to use as the new cap.                                                                         
MS. FITZJARRALD said  the department did not do  any calculations.                                                              
It worked  with Representative  Dyson and  Senator Green  on going                                                              
forward  with no  cap, partially  based on  the fact  that the  20                                                              
percent cap in federal law is an  arbitrary number. Because of the                                                              
significant  decline  in  the  caseload  in  Alaska,  as  well  as                                                              
nationally, 20 percent  of the 1996 caseload was  much higher than                                                              
it is today.  Since 1996, the  caseload has dropped 40  percent so                                                              
20  percent  of  the  remaining  caseload  is  much  smaller.  The                                                              
department has taken  the position that any family  that qualifies                                                              
for an exemption under the current  law and meets the criteria for                                                              
an extension  of benefits should  get it. The department  does not                                                              
want to be  put in the position  of having to prioritize  who gets                                                              
an  exemption  based  on  the severity  of  their  situation.  The                                                              
department hoped  to get rid of  the arbitrary number,  follow the                                                              
current law, regulate  on it, and grant an extension  to those who                                                              
meet the  criteria.  A House  committee discussed this  issue and,                                                              
as Ms.  Hoback testified, the 33  percent was determined  from the                                                              
State of Oregon's experience.                                                                                                   
VICE-CHAIR LEMAN said  a 5 percent variance from  20 percent would                                                              
carry  the  program  through  FY 04,  based  on  the  department's                                                              
projections, without any cut-off  occurring. He commented that the                                                              
increase to 33 percent is not necessary  this year but a 5 percent                                                              
increase  would  cover  the  next  two years  and  give  a  future                                                              
legislature  time  to  review progress  and  decide  whether  that                                                              
amount should be changed.                                                                                                       
MS. FITZJARRALD said  that is correct and it is all  based on what                                                              
happens to  the caseload. She pointed  out that basing the  cap on                                                              
20 percent of the caseload acts as  a disincentive to decrease the                                                              
SENATOR WARD  said he plans to  propose that the  committee reduce                                                              
the  cap to  20 percent,  unless  the department  can  give him  a                                                              
reason not to.   He said he does  not want to harm  anyone, but he                                                              
believes leaving  the 20 percent  cap in place until  next January                                                              
will not do any harm.                                                                                                           
MS. FITZJARRALD said she cannot guarantee  that it will do no harm                                                              
but, based  on what the  department knows  from its five  years of                                                              
experience with this  program, and considering the  factors of the                                                              
clients who  have remained  on the program  for that time  and the                                                              
economy, the  department is  projecting that  no families  will be                                                              
cut off from benefits because of  the 20 percent limit next fiscal                                                              
SENATOR WARD moved  to change, on page 10, line 29,  33 percent to                                                              
25 percent.                                                                                                                     
SENATOR WILKEN  asked if the  33 percent came from  Representative                                                              
Dyson's  best   guess  coupled  with  Ms.   Hoback's  professional                                                              
REPRESENTATIVE DYSON answered affirmatively.                                                                                    
SENATOR DAVIS stated:                                                                                                           
     I guess  the maker of this  motion is going to  speak to                                                                   
     as  to why  he thinks  it should  be 25  rather than  33                                                                   
     because  what you're  doing is thinking,  well, 25  will                                                                   
     work because 20 should work  but we don't know that. And                                                                   
     we have the  opportunity to do something  with this bill                                                                   
     now. We  don't have  to wade back  and second, it's  not                                                                   
     costing us any money to do what  we're doing now and why                                                                   
     should we  have to put it  off until even  next January,                                                                   
     which means  January could move  into May and  May could                                                                   
     move into the  next year and we still have  the division                                                                   
     in  limbo. I  think that  the division  has worked  very                                                                   
     well trying to  make sure that they do  something that's                                                                   
     going  to be in  the best  interest of  the people  that                                                                   
     they serve.  And then  we have  expert people that  have                                                                   
     come  here and  have worked  with us and  say, look  you                                                                   
     know,  they started  this thing  off wanting  us not  to                                                                   
     have a  cap at  all - said  that we  will work in  those                                                                   
     confines and then we will be  able to work the situation                                                                   
     out and then when you decided  that you didn't want that                                                                   
     they  came up with  a number  that seemed  to be a  good                                                                   
     number and now  we want to make it to be  25 when we, as                                                                   
     legislators, don't  know if that will work  or not work.                                                                   
     You'd think we  would listen to the experts  and go with                                                                   
     what we  have rather  than us,  as legislators, who  are                                                                   
     supposed to  be policy makers and making  good decisions                                                                   
     rather than  just second-guessing.  Why put it  off this                                                                   
     year what you  can do next year and what  are we gaining                                                                   
     by doing this?                                                                                                             
SENATOR WARD replied that Senator  Green said that she arbitrarily                                                              
picked  the 20 percent  out of  the air  and Representative  Dyson                                                              
arbitrarily chose  33 percent. His  motion was based  on testimony                                                              
that  no one  will  be harmed  at  20 percent  but  he added  five                                                              
percent to  make sure  no one  is harmed.  If re-elected,  he will                                                              
address the  issue next year. His  motion is designed  to continue                                                              
pressure on the program while ensuring that no one is harmed.                                                                   
SENATOR WILKEN asked  where the federal government  stands on this                                                              
MS.  FITZJARRALD  said  the  President's  proposal  keeps  the  20                                                              
percent  cap.  Other  legislation  has  been  introduced  with  no                                                              
changes on the federal level to the  20 percent cap although there                                                              
has been recognition that many other  states have been using state                                                              
funds  to  provide benefits  to  families  who  will get  cut  off                                                              
because of the 20  percent cap. She added that many  states do not                                                              
have a time limit in their state laws.                                                                                          
VICE-CHAIR LEMAN said in response  to Senator Davis's comments, he                                                              
is willing to support the 25 percent  because it provides coverage                                                              
for two fiscal years during which trends can be observed.                                                                       
SENATOR WILKEN asked Representative  Dyson what number he prefers.                                                              
REPRESENTATIVE  DYSON said  that he  and Senator  Green asked  the                                                              
Institute  to do the  report and  he, like  Senator Ward,  is very                                                              
impressed  with   the  work  that   has  been  produced   and  the                                                              
Administration's  response  to  it.   Regarding  Senator  Wilken's                                                              
question, he stated:                                                                                                            
     Back to the  question at hand, I went through  a process                                                                   
     not  unlike  the Chair  here  in  trying to  figure  out                                                                   
     what's this  negative regression that's headed  for some                                                                   
     kind of a horizontal asymptote  out there would be and I                                                                   
     can't - and every state is going  to be different and we                                                                   
     will see  the accuracy in  retrospect better than  we do                                                                   
     now. It  certainly depends on  the culture and  attitude                                                                   
     of the people  administering it. I think  that's part of                                                                   
     what  motivates Senator  Ward, is wanting  to keep  some                                                                   
     pressure  on there and  it's what made  me a bit  uneasy                                                                   
     about taking  the cap off. With Mr. Nordlund  in charge,                                                                   
     I feel quite  comfortable that he's headed  in the right                                                                   
     direction. If I got appointed  to a conference committee                                                                   
     here, and it came out of here  20 percent and we had had                                                                   
     33, I  would have done  virtually what you're  doing and                                                                   
     I'd say, okay,  let's get this thing done  and make sure                                                                   
     it's in  place, cut the baby  in half, which  would have                                                                   
     been 27.5 percent.                                                                                                         
REPRESENTATIVE  DYSON said the  reason Alaska  will see  this more                                                              
accurately  in retrospect is  because it  is unique. He  commented                                                              
that he  questioned Mr. Nordlund  quite closely about  whether the                                                              
department would let  people get their benefits  extended when the                                                              
only thing that is keeping them from  working is that there are no                                                              
jobs in their  town.  Mr.  Nordlund said absolutely not.  If there                                                              
is no  employment in  a client's  town, that  client will  have to                                                              
move. Mr. Nordlund  said the department is not in  the business of                                                              
supporting  someone  to live  in  a  place  where no  jobs  exist.                                                              
Representative Dyson  said he was comfortable with  the 30 percent                                                              
that he  put up but Representative  Davies suggested 33,  based on                                                              
Oregon's  experience. He  said he believes  committee members  are                                                              
correct in that the 25 percent will  ensure that no one is harmed.                                                              
SENATOR  WILKEN  asked  Representative  Dyson  if  25  percent  is                                                              
acceptable to him.                                                                                                              
REPRESENTATIVE DYSON said it is and  asked that the committee hear                                                              
from Mr. Lindstrom.                                                                                                             
MR.  ELMER LINDSTROM,  Deputy Commissioner  of  the Department  of                                                              
Health  and Social  Services, said  he doesn't  know an  asymptote                                                              
from a cord of wood, but he is aware  of the history of HB 402 and                                                              
would like  to share  it with  members. A  bill was introduced  in                                                              
both  the House  and Senate  last  session by  the Governor.  Both                                                              
bills included  a repeal  of the  20 percent  cap and other  minor                                                              
provisions.  A bill ultimately  passed the  House that  included a                                                              
number of acceptable provisions but  did not include any amendment                                                              
to the 20 percent  cap. An assurance was given that  the repeal of                                                              
the cap  would be taken  care of this  year. Now the  committee is                                                              
deliberating a "nice  package of stuff" from the  report - most of                                                              
which  the  department would  have  pursued  if  left to  its  own                                                              
devices  as they  make sense.  However  the 20  percent cap  issue                                                              
still remains the  key to the department's ability  to support the                                                              
bill.  He said  he respects  Senator  Ward's comment  that if  re-                                                              
elected he will work diligently to  address the cap next year, but                                                              
as  a  stand  alone proposition,  amending  or  removing  that  20                                                              
percent cap will not be a politically  easy or attractive issue to                                                              
deal with. He believes it is better  for everyone to look at it as                                                              
part of  a well balanced  package before  the committee  today. He                                                              
said regarding the question about  whether the department supports                                                              
the 33 percent limit, the answer  is a reluctant yes, but the same                                                              
thing can  be said of  a 20 percent cap,  nor is he  certain about                                                              
the  25 percent.  He  maintained  that it  is  a deal  that  keeps                                                              
getting  cut  thinner  and  thinner and  is  problematic  for  the                                                              
department at this point.                                                                                                       
SENATOR WARD  said he  appreciates all of  the work Mr.  Lindstrom                                                              
has done on this bill and if he is  here next year he will address                                                              
the cap.  He stated that  at 25 percent,  not one Alaskan  will be                                                              
harmed for  the next  two years  and the  new legislators  will be                                                              
able to  look at  the actual  numbers and  decide which  arbitrary                                                              
number is the best. He indicated  the reality is that no one wants                                                              
anyone  to  fall   off  of  the  benefit  program   if  they  have                                                              
extraordinary circumstances. He maintained  his motion and said he                                                              
looks forward to speaking to the Governor about this issue.                                                                     
SENATOR DAVIS commented  that the previous speaker  stated what he                                                              
will  do when  he comes  back, but  there is  no way  to know  the                                                              
future and  who will be  here. She believes  the point  made about                                                              
this bill  being a package deal  is something the  committee needs                                                              
to take  into consideration. She  maintained this package  is well                                                              
balanced  and  has been  reviewed  by  the department  and  expert                                                              
consultant. All  gave it their best recommendation.  She expressed                                                              
concern about having to come back  and deal with the cap and noted                                                              
that  the  current President  has  done  nothing  to lift  the  20                                                              
percent federal  cap and that other  states are already  making up                                                              
the difference  by using  state monies. Alaska  is not at  a point                                                              
where it is willing  to do that. If this issue is  dealt with as a                                                              
package, the state will get better  results. No one knows what the                                                              
climate will  be next year. She  said the Administration  has said                                                              
it prefers no cap  so to keep knocking the number  around when all                                                              
numbers are  arbitrary is not in  the best interest of  the people                                                              
being served.                                                                                                                   
SENATOR WILKEN called for a brief at-ease.                                                                                      
VICE-CHAIR LEMAN  called the meeting  back to order  and announced                                                              
that the committee has an amendment before it.                                                                                  
SENATOR DAVIS maintained her objection to the amendment.                                                                        
VICE-CHAIR LEMAN asked  for a roll call vote. The  motion to adopt                                                              
the amendment carried with Senators  Wilken, Ward and Leman voting                                                              
in favor, and Senator Davis opposed.                                                                                            
There  being no  further amendments  or  discussion, SENATOR  WARD                                                              
moved   SCS  CSHB   402(HES)   from  committee   with   individual                                                            
recommendations and  its accompanying fiscal note.  There being no                                                              
objection, VICE-CHAIR  LEMAN announced  the bill will move  to the                                                              
next committee of  referral. He then announced  the committee will                                                              
meet jointly with  the House Health and Social  Services Committee                                                              
on April 11 to  hear the Suicide Prevention Council  report and it                                                              
will  meet  on  Friday,  April  12  to  continue  the  hearing  on                                                              
Kivalina. He then adjourned the meeting at 2:20 p.m.                                                                            

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