Legislature(2001 - 2002)
04/27/2002 10:05 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 27, 2002
10:05 a.m.
MEMBERS PRESENT
Representative John Coghill, Chair
Representative Jeannette James
Representative Hugh Fate
Representative Gary Stevens
Representative Peggy Wilson
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 497
"An Act giving notice of and approving the entry into, and the
issuance of, certificates of participation for the upgrade,
expansion, and replacement of certain correctional facilities
and jails; giving notice of and approving the entry into, lease-
financing agreements for certain of those projects; and
providing for an effective date."
- MOVED HB 497 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 340(FIN)(efd fld)
"An Act relating to public notice of information relating to
permanent fund dividends, and to treatment of permanent fund
dividends for purposes of determining eligibility for certain
benefits."
- HEARD AND HELD
HOUSE BILL NO. 327
"An Act relating to state employees who are called to active
duty as reserve or auxiliary members of the armed forces of the
United States; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 497
SHORT TITLE:LEASE-PURCHASE CORRECTIONAL FACILITY
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
02/20/02 2338 (H) READ THE FIRST TIME -
REFERRALS
02/20/02 2338 (H) CRA, STA, FIN
02/20/02 2338 (H) FN1: (REV)
02/20/02 2338 (H) GOVERNOR'S TRANSMITTAL LETTER
02/28/02 (H) MINUTE(STA)
03/14/02 (H) CRA AT 8:00 AM CAPITOL 124
03/14/02 (H) Moved Out of Committee
03/14/02 (H) MINUTE(CRA)
03/15/02 2545 (H) CRA RPT 2DP 3NR
03/15/02 2545 (H) DP: GUESS, MORGAN; NR:
SCALZI,
03/15/02 2545 (H) HALCRO, MEYER
03/15/02 2545 (H) FN1: (REV)
03/15/02 2545 (H) FN2: (COR)
04/25/02 (H) STA AT 8:00 AM CAPITOL 102
04/25/02 (H) Scheduled But Not Heard
04/27/02 (H) STA AT 10:00 AM CAPITOL 102
BILL: SB 340
SHORT TITLE:HOLD HARMLESS PROVISIONS OF PFD PROGRAM
SPONSOR(S): RLS
Jrn-Date Jrn-Page Action
02/22/02 2284 (S) READ THE FIRST TIME -
REFERRALS
02/22/02 2284 (S) FIN
03/04/02 (S) FIN AT 9:00 AM SENATE FINANCE
532
03/04/02 (S) Heard & Held
03/04/02 (S) MINUTE(FIN)
04/03/02 (S) FIN AT 9:00 AM SENATE FINANCE
532
04/03/02 (S) Moved CS(FIN) Out of
Committee -- Recessed to 4:00
pm --
04/03/02 (S) MINUTE(FIN)
04/03/02 (S) MINUTE(FIN)
04/10/02 2708 (S) FIN RPT CS 4DP 1DNP NEW TITLE
04/10/02 2708 (S) DP: KELLY, GREEN, WILKEN,
WARD;
04/10/02 2708 (S) DNP: HOFFMAN
04/10/02 2708 (S) FN1: ZERO(REV); FN2: (REV)
04/10/02 2708 (S) FN3: (HSS); FN4: (HSS); FN5:
(HSS)
04/10/02 2708 (S) FN6: (HSS); FN7: (HSS); FN8:
(HSS)
04/11/02 (S) RLS AT 10:30 AM FAHRENKAMP
203
04/11/02 (S) MINUTE(RLS)
04/15/02 2775 (S) READ THE SECOND TIME
04/15/02 2775 (S) FIN CS ADOPTED UNAN CONSENT
04/15/02 2775 (S) ADVANCE TO 3RD READING FLD
Y12 N5 E1 A2
04/15/02 2775 (S) ADVANCED TO THIRD READING
4/16 CALENDAR
04/15/02 2774 (S) RULES TO CALENDAR 1OR 4/15/02
04/16/02 2791 (S) READ THE THIRD TIME CSSB
340(FIN)
04/16/02 2791 (S) PASSED Y12 N7 E1
04/16/02 2792 (S) EFFECTIVE DATE(S) FAILED Y13
N6 E1
04/16/02 2792 (S) ELLIS NOTICE OF
RECONSIDERATION
04/17/02 2814 (S) RECONSIDERATION NOT TAKEN UP
04/17/02 2815 (S) TRANSMITTED TO (H)
04/17/02 2815 (S) VERSION: CSSB 340(FIN)(EFD
FLD)
04/18/02 2997 (H) READ THE FIRST TIME -
REFERRALS
04/18/02 2997 (H) STA, FIN
04/18/02 2997 (H) REFERRED TO STATE AFFAIRS
04/25/02 (H) STA AT 8:00 AM CAPITOL 102
04/25/02 (H) Heard & Held
04/25/02 (H) MINUTE(STA)
04/27/02 (H) STA AT 10:00 AM CAPITOL 102
WITNESS REGISTER
MARGOT KNUTH, Strategic Planning Coordinator
Office of the Commissioner - Juneau
Department of Corrections
431 North Franklin Street, Suite 400
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 497.
SENATOR RANDY PHILLIPS
Alaska State Legislature
Capitol Building, Room 103
Juneau, Alaska 99801
POSITION STATEMENT: Presented SB 340 as sponsor.
TABER REHBAUM, Arctic Alliance for People
1401 Kellum Street
Fairbanks, Alaska 99701
POSITION STATEMENT: Testified against SB 340.
STEVE CONN, Executive Director
Alaska Public Interest Research Group (AkPIRG)
PO Box 101093
Anchorage, Alaska 99503
POSITION STATEMENT: Testified against SB 340.
BRUCE KOVARIK
National American Indian Housing Council
19600 Citation Road
Eagle River, Alaska 99577
POSITION STATEMENT: Testified against SB 340.
PAULETTE ALDEN
895 West Twelfth Street, Number 212
Juneau, Alaska 99801
POSITION STATEMENT: Testified against SB 340.
KATHLEEN WARWICK
895 West Twelfth Street, Number 104
Juneau, Alaska 99801
POSITION STATEMENT: Testified against SB 340.
EUGENE WARWICK
895 West Twelfth Street, Number 104
Juneau, Alaska 99801
POSITION STATEMENT: Testified against SB 340.
TONY LOMBARDO
Covenant House
609 F Street
Anchorage, Alaska 99501
POSITION STATEMENT: Testified against SB 340.
MARIE LAVIGNE, Executive Director
National Association of Social Workers
Alaska Chapter
4161 Patterson Circle
Anchorage, Alaska 99504-4680
POSITION STATEMENT: Testified against SB 340.
MARSHALL HARRIS
895 West Twelfth Street, Number 309
Juneau, Alaska 99801
POSITION STATEMENT: Testified against SB 340.
WILLIAM CRAIG
Alaska Independent Blind
613 Degroff Street
Sitka, Alaska 99835
POSITION STATEMENT: Testified against SB 340.
JIM NORDLUND, Director
Division of Public Assistance
Department of Health & Social Services
PO Box 110640
Juneau, Alaska 99811-0640
POSITION STATEMENT: Testified against SB 340 and answered
questions.
JOHN SHERWOOD, Unit Manager
Beneficiary Eligibility Policy
Division of Medical Assistance
Department of Health & Social Services
PO Box 110660
Juneau, Alaska 99811-0660
POSITION STATEMENT: Answered questions on SB 340.
NANCI JONES, Director
Permanent Fund Dividend Division
Department of Revenue
PO Box 110460
Juneau, Alaska 99811-0460
POSITION STATEMENT: Answered questions on SB 340.
CAREN ROBINSON, Lobbyist
for Alaska Women's Lobby
PO Box 33702
Juneau, Alaska 99803
POSITION STATEMENT: Testified against SB 340.
ACTION NARRATIVE
TAPE 02-48, SIDE A
Number 0001
CHAIR JOHN COGHILL called the House State Affairs Standing
Committee meeting to order at 10:05 a.m. Representatives
Coghill, Fate, Stevens, Wilson, Crawford, and Hayes were present
at the call to order. Representative James arrived as the
meeting was in progress.
HB 497 - LEASE-PURCHASE CORRECTIONAL FACILITY
[Contains discussion of SB 231]
CHAIR COGHILL announced that the first order of business would
be HOUSE BILL NO. 497, "An Act giving notice of and approving
the entry into, and the issuance of, certificates of
participation for the upgrade, expansion, and replacement of
certain correctional facilities and jails; giving notice of and
approving the entry into, lease-financing agreements for certain
of those projects; and providing for an effective date."
Number 0139
MARGOT KNUTH, Strategic Planning Coordinator, Office of the
Commissioner - Juneau, Department of Corrections, told the
committee that this legislature is one of the best-informed
legislatures on the needs of the Department of Corrections in
many years. She explained that there are overcrowded
facilities, and the department is relying on prison beds in
Arizona to house all of the inmates. There are both regional
needs and prison needs. Both prison beds and beds in the jail
facilities around the state are needed, because those facilities
are housing pretrial inmates who need to be near the court, and
they're housing people with very short sentences who will cycle
through the system in a few days.
Number 0260
MS. KNUTH said it doesn't make economic sense to transport them
to the Palmer prison that the state now has, or the Whittier
prison that has been proposed, or Arizona. The capacity is
roughly 4,600 inmates and beds. She informed the members that
just on any given day, there are 30,000 people cycling through
those beds. There are 30,000 bookings and about 29,800 releases
each year. Most of those people spend a very short time in the
system. She explained that HB 497 takes a regional approach on
expanding facilities in a phased manner. The first stage
authorizes expanding the Palmer Correctional Center by 237 beds,
expanding the jails in Bethel and Fairbanks, and expanding the
Spring Creek Correctional Center Youthful Offender Program in
Seward.
MS. KNUTH reported that the facility in Seward is a special
needs population. In the last ten years there has been a
dramatic increase in the number of youthful offenders, who are
being treated as adults in the system, and they present special
management problems and have special education needs. Putting
them in one place and running a special program for them is
their best hope for rehabilitation and functioning in the
system, without causing disruption to other inmates. The other
part of HB 497 addresses the needs in four community jails in
Dillingham, Kodiak, Kotzebue, and the North Slope Borough.
Number 0436
MS. KNUTH admitted that the four community jails are in bad
shape; they are overcrowded and rundown. They are the four most
utilized jails of the fifteen jails statewide. All have fairly
urgent needs, but there isn't enough money to take care of
everything all at once, and it would be difficult in terms of
project management to do everything at once. These are the four
most urgent in the sense that they are relied upon by the
communities and the department to the greatest degree.
MS. KNUTH indicated that HB 497 recognizes that there are other
expansion needs for the department. It authorizes design
funding for expanding the Mat-Su Pretrial Facility. She noted
that the Matanuska-Susitna Valley has the fastest growing
population. Unfortunately, that means it also has the fastest
growing need for additional incarceration space. The newly
opened Anchorage Jail had been developed and designed to expand
by 200 inmates within five years, so part of the design costs
are for that jail. The Point MacKenzie Farm is an economical
placement for inmates who are well suited for rehabilitation
projects and are expected to leave the system fairly soon.
Number 0573
MS. KNUTH pointed out that down the road, the Wildwood
Correctional Center in Kenai, the Lemon Creek Correctional
Center in Juneau, and the jail in Ketchikan will need to be
expanded. All of this comes with a price tag, and the mechanism
used in this legislation is for the state to issue bonds. It
utilizes the certification of participation method, which means
that the department will pay back the capital costs on an annual
basis, and the operating costs are set out in the bill.
MS. KNUTH explained the difference between HB 497 and Senator
Green's bill, SB 231, is that SB 231 targets the same facilities
in the same areas, but authorizes all of the projects
simultaneously. Although there isn't a difference in terms of
numbers or locations, the timetable is opened up, and the
funding mechanism is different. In SB 231, the local
governments would be issuing the bonds, and the state would
enter into local contracts with the local governments and repay
them. The two bills are similar in terms of the philosophical
approach using regional expansion.
Number 0705
REPRESENTATIVE STEVENS agreed that the Kodiak jail is in bad
shape. He asked for more detail on the matching grants between
the four communities and the state.
MS. KNUTH answered that the state would pay $4 million, and the
four communities need to come up with a matching $4 million.
Kotzebue already has a federal grant that would cover its share.
The North Slope Borough is able to fund its portion fairly
readily. Dillingham and Kodiak need to work a little harder to
come up with their part of it, but they are very optimistic and
are very committed. This is a priority for their communities,
and they expect to match it.
REPRESENTATIVE STEVENS said that state funds would not be
expended unless the communities come up with the matching share.
MS. KNUTH agreed and said it is a conditional grant.
Number 0900
CHAIR COGHILL asked how the local communities share in the
certificate of participation. He wondered if it is a shared
bond.
MS. KNUTH answered that the communities actually own these
facilities, and this envisions that they will keep ownership.
The state would grant the $4 million, and the local communities
would retain the title. There is an acknowledgement that the
state is paying the operating expenses for the facilities
because the inmates are all state inmates; none are housed there
on local charges. Increasing the capacity will increase the
operating expenses; that increase has been identified in the
bill, and the state would fund it.
Number 0960
CHAIR COGHILL said the difference in funding the two bills is
that HB 497 has the state as the bonding source, whereas the
Senate bill has the local governments as the bonding source. He
asked about the different bonding mechanisms.
MS. KNUTH said that the Department of Revenue can issue the
bonds for less than the local governments. Local governments
had talked about going through AIDEA [Alaska Industrial
Development and Export Authority] for funding assistance. The
difference between the two is not economically significant. She
indicated that there is a benefit in having local commitment to
the project. There's a little awkwardness in that the state
would have to turn over title of part of the facility, at least
for the local governments to be able to issue their bonds, but
they have not expressed interest in keeping title to the
facilities past the bonding period. Even if they did, the state
would probably be amenable to that. She predicted that Alaska
eventually will go the way of locally owned and operated
facilities.
Number 1091
REPRESENTATIVE JAMES commented that all the facilities for state
criminals will have to be addressed someday: separate what is
the state's responsibility, and what is the local government's
responsibility. She said she is not convinced that the local
governments have the ability to do that yet. She expressed
concern about the fiscal problems and "bonding enthusiasm."
There is a limit to what can be done. She asked Ms. Knuth about
transferring ownership to the local facilities.
MS. KNUTH answered that HB 497 does not transfer ownership to
the local governments; that would be Senator Green's bill,
SB 231, which has the local governments issuing the bonds. In
the governor's bill, the state issues the bonds, and the state
retains ownership of the state jails and prisons. This bill has
two different parts. One is the state prisons and jails, and
the other is the community jails. The community jails are
locally owned and are the small 5- to 10-bed facilities. The
local governments would continue to own them, and the $4 million
that the state would contribute would be a part of the bond
issuance for the state projects. There would be an additional
$12 million issued in bonds for the state projects which would
be secured by the state's facilities and would go to the
community jails.
Number 1263
REPRESENTATIVE JAMES noted there have been many things before
the legislature for new construction of various kinds of things,
and unless there is a provision for maintenance, she is not
interested in building new facilities. She said it is
embarrassing to have facilities that belong either to local
governments or the state which look like they are totally
deteriorated. She always wants to tie something to these
construction issues that provided the maintenance, and she has
never been able to do that. She commented that nobody wants to
think about the fact that the facilities have to be kept up.
MS. KNUTH agreed that was a valid point. She said she thought
that it would be possible for the state to identify what those
maintenance costs would be, and they could be set out in
legislation. Even though a bill in 2002 cannot bind future
legislatures for appropriations, it could acknowledge what that
responsibility is, and what the amount of money would be.
REPRESENTATIVE JAMES stated that she would like to see funds set
aside for maintenance on every building in the state.
CHAIR COGHILL asked if lease payments were a part of the
maintenance agreement.
MS. KNUTH said the traditional funding mechanism does not
function that way. It just covers the cost of the debt.
Maintenance is a part of departmental annual budgets, and that
separation creates the problem.
Number 1525
MS. KNUTH pointed out that the department has no control over
the number of beds it needs. The department makes decisions
about whether to assign a prison bed or a halfway house or how
soon to furlough [an inmate], while the judge sends down the
sentence as per the parameters set by the legislature. She told
the committee that there is a trend in other states to reexamine
some of the sentencing structures for felonies. As a matter of
economics, Alaska might need to go that route. For example, the
property offense level is still $500 for a felony, and it has
been that way since statehood. She commented that bumping into
another car would cause more than $500 damage. If that level
were raised to $1,000 or $2,000, maybe the number of felonies
and the sentences could be reduced, and maybe the department
wouldn't need the capital money for new beds.
Number 1598
REPRESENTATIVE JAMES commented that there is good technology for
short sentences, whereby people can serve time at home if
someone watches them if they aren't dangerous to society. She
said she hasn't seen much interest in going that direction
either. Certainly it is cheaper to keep them at home on a
monitoring system than it would be to find a bed and provide
three meals and a cot. She noted that some real innovative
thinking needs to be done on this issue; the state cannot afford
where it's going on this.
Number 1685
CHAIR COGHILL asked why there aren't more halfway houses and if
it is because of the sentencing. He wondered if there are ways
to have less expensive beds.
MS. KNUTH said the department actively pursues the use of
halfway house beds whenever possible. There used to be minimum
security prisons, and there is no such thing anymore. Anybody
who is a minimum security risk is now in a halfway house or an
electronic monitoring program. So, incarceration in a "hard
bed" starts at the medium level. She acknowledged that there
are limitations from the sentencing code and from the
conviction. She pointed out that there are community issues
too. The willingness to have someone [who's been charged with]
domestic violence assault out in the community is not as great.
It is a complicated area. Ms. Knuth said that the department
has probably gone as far as it can with the existing criminal
sentencing code structure in terms of utilizing halfway houses
and is getting more aggressive about home furlough and
electronic monitoring. In the abstract, those things sound
good, but then when there are criminal inmates who are known to
their neighbors, it's always, "but not him."
Number 1808
CHAIR COGHILL noted that the price per bed in the Senate bill is
significantly lower and wondered what the difference is. The
Senate bill averages $155,000 per bed, and HB 497 runs between
$159,000 and $175,000.
MS. KNUTH replied that all the identified projects and the
future ones would average $155,000. The Point MacKenzie Farm
beds and the Anchorage Jail beds are going to come in under
$155,000 in phase 2 of HB 497. She acknowledged that there is a
regional problem. Building in Bethel and Fairbanks is certainly
more expensive than the Anchorage bowl area, and Spring Creek is
more because it is a maximum security facility.
Number 1878
REPRESENTATIVE CRAWFORD said he was shocked to hear that 30,000
people cycle through the system. He asked how many inmates are
maximum security who will be in the system forever.
MS. KNUTH answered that she didn't have the exact number, but it
is a relatively small number. None of the approximately 1,000
inmates sent to Arizona have been maximum security. She guessed
the number would be around 500 or so. Their sentences are
between 40 and 150 years. Even if they served 20 years, they
are not eligible for alternative placement. She noted that
geriatric prisoners and their medical costs will be a problem
that the department will face in the near future. There are
people who committed heinous offenses 40 years ago who are now
having significant medical issues. At some point the department
is going to have to balance what it thinks is appropriate for
them. Most offenders in Alaska are misdemeanants in the system
a short period of time.
Number 2013
CHAIR COGHILL asked why there is a need to move prisoners.
MS. KNUTH replied that from the time of the arrest, there will
be arraignment, maybe a trial, and a sentencing. Each of those
three proceedings needs to occur before a judge in the place
where the person was arrested. Bethel and Fairbanks are
overcrowded with people who need to be in that area. Once it
spills over, those inmates are moved to a place such as Palmer
medium class prison, which isn't the right place for them, but
it's the only place with space. They get moved to Palmer after
arraignment, and they're there for two weeks until it's time for
sentencing because they changed their plea and are ready to go
before the court. She explained that the new Anchorage Jail is
a pilot project that has a courtroom there, so people don't need
to be transported anywhere for arraignment or sentencing.
MS. KNUTH noted that as the electronic capabilities are
improved, judges are reluctant to sentence a person by video
camera; they feel a need for face-to-face appearances for
sentencing. But technology may be relied on for arraignment and
other procedures. Prisoners are moved because of the number of
court appearances and the fact that they have short sentences.
When people plead out to an offense and serve time, then they
need to be transported home. The state is obligated to book
them out of the facility they were booked in. Every time
inmates are moved, they have to be moved back, and it adds up.
CHAIR COGHILL commented that it is hard on inmates in court-
ordered programs who get moved. He said it would be good to see
the documented cost compared to what it would cost for a bed in
the community.
Number 2179
MS. KNUTH said people also get transferred within the system
because space opens up somewhere else that has a program. The
only way that could be addressed is to overbuild to the peak
rather than to the median, and Alaska doesn't have the funds for
that. She agreed with his concern on the inmates finishing the
programs because the programs are the key to success.
Number 2219
CHAIR COGHILL asked Ms. Knuth to explain the categories of the
facilities.
MS. KNUTH explained that at some facilities, inmates could be
arraigned, sentenced, and serve the whole sentence there. Those
places tend to have names which include the words "correctional
center." The Mat-Su Pretrial Facility was more recently built
and by that time, the department recognized that nobody was able
to serve the whole sentence in these regional places, so they
called it the Mat-Su Pretrial Facility. The name of the
Anchorage Jail acknowledges that it is for misdemeanants and
pretrial people. The three prisons in Alaska are the Palmer
Correctional Center, the Wildwood Correctional Center in Kenai,
and the Spring Creek Correctional Center in Seward. There is no
booking capability at those facilities, so an inmate has to
start somewhere else. She noted that programs are most
productive at the prisons because the inmates usually have
months to serve.
Number 2324
CHAIR COGHILL noticed that the Anchorage Jail is planned for
another 192 beds and wondered if that plan was with the initial
construction.
MS. KNUTH said it was designed for that expansion because it
would be needed in the future. It can be done cost effectively
because of that.
CHAIR COGHILL said he couldn't argue with the number of beds but
struggled if this was the best way to handle the population. He
asked about the youthful offenders, and how they're being
handled.
Number 2396
MS. KNUTH replied that if they're in Palmer, Wildwood, or a
regional facility, they are intermingled with the rest of the
population, but they do have special needs. There is a youthful
offender program at Spring Creek that has about 70 beds, but the
number of offenders under the age of 25 has grown in the last
five or six years.
MS. KNUTH explained that the youthful offenders have special
impulse-control problems. Not only do they have a problem being
law-abiding, but they also bring impetuousness and juvenile
development issues. A lot of druggies use marijuana which
arrests development. A lot of these offenders have used
marijuana for a long time, so even at age 25, the adjustment or
socialization level is about the level of someone 15 or 16 years
old. The Spring Creek program puts them together with people
who are specially trained in dealing with adolescents with an
emphasis on education and other chemical dependency programs.
The program at Spring Creek tries to spare the rest of the
inmate population from the youthful offenders who often are the
ones causing assaults in the facilities. People in their 30s
and 40s have figured out how to live there, and the young kids
don't have that wisdom. The Spring Creek Youthful Offender
Program gives the kids the opportunity to work on their needs
and improve their chance for rehabilitation.
Number 2502
REPRESENTATIVE WILSON asked what percentage of the inmate
population is female and how the facilities cope with that.
MS. KNUTH answered that Hiland Mountain Correctional Center in
Eagle River is exclusively for women. Unfortunately, the
percentages of females being incarcerated is increasing. The
percentage isn't even 10 percent. There are 250 women in Hiland
out of a total population of 5,000. Ms. Knuth reported that
there have to be separate facilities in regional jails, and each
institution has a way to deal with that. At the Anchorage Jail,
there is a place where a wall can be put up in the dorm to
separate the women from the men. It is a given that there will
be separation. The department tries to have parity with
programs, but that is difficult because of the smaller
population of women.
Number 2634
REPRESENTATIVE JAMES commented that if a more proportionate
amount of money could be spent on creating a climate for more
industry and good-paying jobs, history shows that crime,
domestic violence, and sex abuse go down. All the various
issues that cost so much to take care of these people are
reduced simply by having opportunities for people to find a job.
It distresses her that some of the money can't be used to create
some sort of activity that keeps this from growing. In her ten
years in the legislature, that issue has not been addressed or
agreed on. It pains her to be in this position when she doesn't
see where the money is going to come from to do this unless
there is more economic activity in the state, she commented.
MS. KNUTH agreed with Representative James and is glad that
people recognize the problem. The single greatest predictor of
whether someone will be in prison in his/her lifetime is whether
he/she gets a high school diploma. A real focus ought to be to
get all the kids through high school.
Number 2727
CHAIR COGHILL agreed with Representative James that there is a
need but disagreed that nothing has been done. He's been on the
House Health, Education and Social Services Standing Committee
the past four years, and they've grappled with where to put
resources. He refuses to believe they haven't addressed the
problem; it is just that the problem grows as rapidly as it's
worked on.
REPRESENTATIVE JAMES retorted that it can be said that getting
education for these children is the most important thing but
said she thinks that the most important thing for these children
is for their parents to have a job.
Number 2780
REPRESENTATIVE FATE asked if there were any statistics on not
getting a high school diploma and criminal activity.
MS. KNUTH said she will get those for him.
CHAIR COGHILL commented that HB 497 will have a struggle in the
finance area because it is a tough budget year.
Number 2826
REPRESENTATIVE HAYES moved to report HB 497 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 497 was reported out of the
House State Affairs Standing Committee.
SB 340 - HOLD HARMLESS PROVISIONS OF PFD PROGRAM
CHAIR COGHILL announced that the next order of business would be
CS FOR SENATE BILL NO. 340(FIN)(efd fld), "An Act relating to
public notice of information relating to permanent fund
dividends, and to treatment of permanent fund dividends for
purposes of determining eligibility for certain benefits."
The committee took an at-ease from 10:54 a.m. to 10:57 a.m.
Number 2880
SENATOR RANDY PHILLIPS, Alaska State Legislature, sponsor,
presented CSSB 340(FIN)(efd fld).
Number 2899
CHAIR COGHILL made a motion to adopt the proposed House
committee substitute (HCS) for SB 340, version 22-LS1361\P,
Cook, 4/24/02, as a work draft. There being no objection,
Version P was before the committee.
SENATOR PHILLIPS explained that the difference between this
version and what was passed in the Senate is the P version
exempts the longevity bonus by adding the following:
Page 3, lines 3-4, "Except as provided in
AS 47.55.020(e)(3), a".
SENATOR PHILLIPS explained that SB 340 deals with the "hold
harmless" clause. There is about $27.35 taken out of everyone's
PFD [permanent fund dividend] to hold harmless the people on
welfare.
TAPE 02-48, SIDE B
Number 2918
SENATOR PHILLIPS explained that people on SSI [Supplemental
Security Income] and APA [Adult Public Assistance] would be
exempted from this bill and will receive both their benefits and
their PFD. People on the Alaska Temporary Assistance Program
[ATAP] and those people receiving food stamps will have to make
a decision the month of October whether to receive the welfare
assistance, amounting to about $1,240, or the PFD, worth
approximately $7,000, but not both. This money saved, which
amounts to over $4.5 million as proposed by the Senate, will go
in the front section of the budget to deal with the increase in
Medicaid. He added that those folks on food stamps and ATAP are
100 percent qualified for Medicaid, of which only 80 percent
take advantage of the Medicaid services. The money being taken
away from them will go back to them in the form of Medicaid.
The governor's projections for Medicaid is about $193 million,
which is about a $37 million increase over the current fiscal
year.
Number 2898
SENATOR PHILLIPS said there are more and more people on
Medicaid, and that problem has to be resolved; it's growing
about 15 to 20 percent a year. The governor asked for $193
million; the House passed $187 million; the Senate passed $173
million. Obviously, the problem still needs to be dealt with,
he said.
Number 2862
SENATOR PHILLIPS informed the members that the whole intent
behind this bill is to figure out how to fill the gap. He
pointed out that the $37 million is the largest increase of
anything in the budget. Other parts of the budget will be
affected by this, so there has to be a way to balance the
increasing costs in Medicaid.
Number 2832
SENATOR PHILLIPS noted that many constituents over the years
have wondered why the $27.35 is taken out of their PFDs. When
he explains it to them, they wonder why this is being taken out,
since they've already paid federal income tax that goes to
welfare. His main motivation is to resolve the increasing costs
of Medicaid, and this is the intent of the Senate to figure a
way of reducing that increase.
Number 2636
REPRESENTATIVE STEVENS asked if implementing this bill would
eliminate the $27.35 deduction from everyone's PFD.
SENATOR PHILLIPS answered it would reduce the deduction to about
$16. The $16 would cover the people receiving social security,
adult public assistance, and the longevity bonus. He
acknowledged that some people say this is a tax on the poor, and
he understands how they view it in that manner, but on the other
hand the very same group of people are eligible for Medicaid.
Number 2563
REPRESENTATIVE WILSON asked: If the people on ATAP and food
stamps qualify for Medicaid but don't take advantage of it and
then go on Medicaid, will that make the Medicaid bill go up?
SENATOR PHILLIPS said he didn't have that answer.
Number 2522
REPRESENTATIVE JAMES indicated that she has heard anecdotal
stories which show that people are coming to Alaska because the
programs are so good. These programs are increasing, and
there's good evidence that some recipients have not been in
Alaska all of their lives. She said she thinks that needs to be
addressed, and this is the way to do it.
SENATOR PHILLIPS reported that one of his constituents who works
in public assistance has seen a lot of abuses within that
division as far as the public taking advantage of the programs.
He took his constituent's word for it because he doesn't work in
that office; he did not solicit that phone call and was
surprised by it. The constituent seemed to know what he/she was
doing and seemed concerned about the abuses.
Number 2402
REPRESENTATIVE HAYES asked if the $193 million that the governor
proposed in his budget is to address the maintenance of effort
or is above and beyond the maintenance-of-effort issue for
Medicaid.
SENATOR PHILLIPS said he didn't know. He commented that it
doesn't matter what figure is used; the problem is still there.
The Medicaid situation needs to be taken care of as soon as
possible, and this is one way to do it.
Number 2351
REPRESENTATIVE HAYES said that about three years ago the
legislature went into an agreement with the federal government
to use some of the additional monies from Medicaid to pay for
some of the programs. United States Senator Murkowski put in a
provision to increase the amount of Medicaid payments for the
state of Alaska from 50-50 percent. When the legislature was
working on the five-year plan, this was a way to address some of
the issues. Since the federal government switched how it is
doing Medicaid, he argued, the state knew this was coming.
SENATOR PHILLIPS said he thought it was 58-42, and now it's 52-
48 or 53-47. The point is that the state funds to match the
federal funds are increasing because the percentage is
increasing. Alaska may not be able to have that luxury in the
next few years. The fact that it was known it was coming is the
whole point of this bill.
Number 2172
TABER REHBAUM, Arctic Alliance for People, testified via
teleconference. She asked the committee not to pass SB 340.
She indicated that Alaskans on temporary assistance are not
getting a free ride. She understands that ATAP brings them up
to only 67 percent of the poverty level. The successful welfare
reform initiative and case management system are really helping
more people toward self-sufficiency and off state assistance.
The hold harmless provision for ATAP recipients is also an
important element in Alaska's welfare reform success in helping
people make important investments toward self-sufficiency -
buying or repairing a car, purchasing work clothes or equipment,
getting dental needs addressed, becoming more hirable - without
having to lose critical benefits for that month or subsequent
months. This bill would yet place another hurdle before people
who are struggling to try to become independent. She urged the
committee to not promote this bill.
Number 2087
STEVE CONN, Executive Director, Alaska Public Interest Research
Group (AkPIRG), testified via teleconference. He noted that the
Alaska Injured Workers Alliance and the Nubian Sisterhood are
also in AkPIRG. The Alaska Injured Workers Alliance deals with
the needs of injured workers who fall between the cracks for
social services. He expressed opposition to SB 340. He pointed
out that somebody pays in the end. The amount gotten for a
custodial parent by garnishing the PFD will diminish
substantially if this bill passes. Small-business owners who
deal productively with a low-income person will eat those debts,
so they will pay. The Alaska Native family grants will lose
money. He stated that the costs are borne by charities and by
other people.
MR. CONN concluded that a study reported in The New York Times
last Wednesday showed that only one state of the fifty states
from the 1970s to 1990s has actually reduced its income gap
between the richest 20 percent and the poorest 20 percent, and
that's Alaska. This is a positive thing that the permanent fund
has done. He told the committee that this is a despicable bill.
Number 1815
BRUCE KOVARIK, National American Indian Housing Council,
testified via teleconference. He told the committee that SB 340
is misguided, divisive, and just plain wrong. To repeal hold
harmless causes harm, he said. This is a reversal in
established public policy, and there is no reason to reverse
this public policy. He said there has been talk of a fiscal
crisis in Alaska for the past 20 years.
Number 1750
MR. KOVARIK commented that this bill creates uncertainty.
Health and Social Services estimates that about 37 percent of
the families that receive their PFDs in October actually have
them garnished. There are many families who voluntarily assign
their PFDs to pay for affordable housing and other costs, and
most families probably use their PFDs to either pay off
accumulated debt during the year or to advance payment other
family expenses. They annualize their PFDs, and for them to
suffer the loss of ATAP, food stamps, and general relief in
October, November, or December, depending upon how they use the
funds, is counterproductive. The brunt of that uncertainty is
borne by poor and low-income families. He restated that this
bill is divisive.
Number 1614
PAULETTE ALDEN testified that SB 340 will be hard on the
families who won't get both the welfare and the PFD. She said
that it is wrong to attack the people who don't have the money.
People who do have money to live off get to keep their PFDs.
She commented that if it is going to be taken away from one
person, it should be taken away from everyone.
Number 1446
KATHLEEN WARWICK told the committee how hard it is for her and
her husband to live on welfare and food stamps with the high
cost of groceries and rent.
Number 1151
EUGENE WARWICK testified about how hard it is to live on only
$10 a month for food stamps.
Number 0954
TONY LOMBARDO, Covenant House Alaska, testified via
teleconference. He explained that Covenant House is a privately
funded, nonprofit agency which cares for homeless and at-risk
youth. There is also a program in Anchorage called Passage
House, which helps teen moms transition off public assistance
and into self-sufficiency, and he speaks today on their behalf.
Most Passage House moms come just barely surviving on ATAP and
WIC [Special Supplemental Nutrition Program for Women, Infants,
and Children], even with the PFD to help stabilize their lives,
find affordable daycare, learn life skills, such as money
management, and find a job over the course of 12 months to try
to transition off public assistance. They come there because
they are barely making it on the street and often fear that one
false step will result in literally living on the street and
possibly losing their child to state protective custody.
MR. LOMBARDO indicated that this bill would cut the meager
budgets of these teen moms too much, and they might resort to
crime. When poor women are faced with bleak alternatives,
shoplifting, drug dealing, and prostitution seem like quick
fixes. He sees women every day who have fallen prey to the
street culture where crime is a part of life. He said that they
try to get these moms out of that culture and into a healthy
lifestyle. The state needs fewer babies in its custody, fewer
women living on the streets, and more programs like Passage
House helping young ladies into self-sufficiency and off public
assistance. These poor moms do not need anymore financial
crisis or poverty in their lives. He stated that reducing the
income of families already at the poverty level is not part of
the solution to dependency on public assistance in Alaska.
Number 0830
MR. LOMBARDO stated that Covenant House is opposed to the intent
of SB 340. It strives for self-sufficiency for its clients who
are already struggling at the barest level of necessity. It
would be unreasonable to compromise the income level of the
poorest families.
Number 0768
MARIE LAVIGNE, Executive Director, National Association of
Social Workers, Alaska Chapter, testified via teleconference.
She explained that they are a membership organization of 500
professional social workers across Alaska and oppose SB 340.
Recognizing the other testimony this morning, she pointed out
that SB 340 will impact 5,100 families, who are recipients of
ATAP, general relief, and food stamps, by making them choose
between receiving their benefits or permanent fund dividends.
The permanent fund dividend is a benefit enjoyed by all eligible
Alaskans. Why should recipients of public benefits for basic
support lose this money in order to receive their dividend?
MS. LAVIGNE said, heralded as a cost savings to fix the fiscal
gap and Medicaid payments for the state, this is yet another
attack on the poor. There are no savings for the state's
general fund as funding for the hold harmless program comes
directly from the earnings of the permanent fund. On behalf of
the professional social workers who serve many of the 5,100
families who receive ATAP, general relief, and food stamps, she
stated that the ripple effect this will cause is significant,
both to the quality of life and the resources that are available
to these recipients. Most importantly, it reverses the progress
that has been made on welfare reform toward self-sufficiency for
these families and getting them off public assistance.
Number 0667
MS. LAVIGNE noted that the impact on 5,100 poor families in
Alaska is going to be felt in a number of ways. Families use
their permanent funds to buy the things they can't afford during
the rest of the year. Most low income families use their PFDs
to purchase things that will help them become more self-
sufficient: rent deposits, needed vehicle repairs, heating,
clothing, shoes for the children, dental care, or eyeglasses
that are not otherwise paid for. Why penalize them in October,
November, and December when they are eligible to receive a PFD
like other Alaskans? In reality, these families are not using
their PFDs for trips to Hawaii or investment plans for their
children's college fund or other luxuries that many Alaskans
have come to expect each October. Rather, they are waiting to
buy the necessities they cannot afford on a limited monthly
income. According to her, this bill is unfair and mean-
spirited, and it will not accomplish anything except singling
out the poor for their benefits. On behalf of the National
Association of Social Workers, Alaska Chapter, and the children
and families it serves, Ms. Lavigne urged the committee to table
this bill and go back to work on addressing the fiscal gap with
new revenues. No more budget cuts on the back of the poor, she
said.
Number 0529
MARSHALL HARRIS told the committee how hard it is to live on $10
for food stamps. Since he is legally blind, he can't go out and
get a job. He expressed opposition to SB 340.
Number 0347
WILLIAM CRAIG, Alaska Independent Blind, told the committee that
there is a small group of people not defined in SB 340 who
collect Social Security Disability Income (SSDI). They have to
meet a tight income guideline to get this assistance, and
currently, they would probably be left out. There is also a
group of people waiting to collect SSI or SSDI, who collect a
form of adult public assistance while waiting for social
security to make the decision. Those people possibly would also
be left out in the current structure of the bill.
Number 0240
JIM NORDLUND, Director, Division of Public Assistance,
Department of Health & Social Services, told the committee that
back in 1982 when the permanent fund was created, the hold
harmless program was also created. For the past 20 years, the
hold harmless provision in law has ensured that poor Alaskans
are given the full benefit of the PFD. The principals by which
the hold harmless program was created are just as valid and
important today. This bill changes the law 180 degrees. Under
current law, the PFD can't be counted as earnings concerning the
eligibility for ATAP, food stamps, and general relief
assistance. This bill says that the PFD must be counted, and
the effect would be that for the recipients of ATAP, food
stamps, and general relief assistance, they will lose their
eligibility for benefits for October when the PFD is received.
MR. NORDLUND referred to the handout he passed around. Even
with the receipt of the PFD and given the fact that the PFD is
much larger than it has been in the past, people on public
assistance, particularly on ATAP, are still just at the federal
poverty level. The handout shows that a family of three would
receive about $18,700 a year from ATAP, the PFD, and food
stamps. Most of the people on temporary assistance are working,
but just to maximize the full temporary assistance benefit, he
noted that the calculation shows a family of three who isn't
working.
TAPE 02-49, SIDE A
Number 0001
MR. NORDLUND said that based upon the market survey on the cost-
of-living in Alaska, the cost-of-living difference for basic
expenses is about $18,300, so it's a difference of only $400 on
an annual basis. In receiving full ATAP benefits and the full
PFD, this family of three is still just at the federal poverty
level. His point is even with the receipt of the PFD, these
families are still poor by anybody's definition.
MR. NORDLUND pointed out that the temporary assistance caseload
has declined by 40 percent since welfare reform took effect.
There has been success in moving people into self-sufficiency
and employment and off of temporary assistance. He referred to
the other chart in the handout that shows the percentage taken
out of the PFD for the hold harmless program. It went from 3.5
percent in 1996 to 1.5 percent in 2001. Due to the success of
welfare reform and the growth of the permanent fund dividend,
there's a much lower percentage coming out of the individual PFD
checks to pay for the hold harmless program.
Number 0201
MR. NORDLUND said the general relief assistance program is a
program for the poorest of the poor. It predates statehood.
This program pays for indigent burials when there is no family
or no other means to pay for those burials. Administratively,
SB 340 is going to cause the division more work to take people
off the program for the month of October and then make them
eligible again in November.
MR. NORDLUND said that 40 percent of ATAP recipients do get
their PFD check garnished, and some people's entire check is
garnished. So, there will be some individuals on ATAP for the
month of October that will not get a welfare check or a PFD.
They will have no income to support their family for that month.
Number 0332
CHAIR COGHILL asked if that would hold true if it were a court-
ordered garnishment.
MR. NORDLUND said he believed so.
MR. NORDLUND noted another problem for families in October is
that they will not receive a welfare check on the first of
October, and the PFD does not arrive until the middle of
October, so for the first two weeks of October, they will be
unable to pay their rent. That impact has to be considered in
this legislation.
Number 0379
MR. NORDLUND commented that Senator Phillips' reasons for this
bill - wanting to plug the hole in the Medicaid budget - are a
bit like "robbing Peter to pay Paul." That isn't proper in this
regard. The fund source can be switched without this
legislation. He pointed out that in the Senate budget, funds
have been backed out in the same amount of money that the
permanent fund earnings had been put in. He maintained that
there is no net increase in the Medicaid budget because of the
provisions of this legislation.
Number 0489
MR. NORDLUND emphasized that this fund source switch can be done
in the budget without this bill. If this bill doesn't pass and
the Medicaid budget was partially funded with permanent fund
earnings, then it would be up to the department. It would still
lose the fund source out of the department's pay for hold
harmless, but at least it would be up to the department, with
other earnings, to pay for the hold harmless programs, which is
something it would do. He added that that would impact other
services under the ATAP program, particularly childcare and
other work services. It would be the department's position that
it would continue to pay the hold harmless program.
MR. NORDLUND recognized that the fiscal gap is a real problem,
but in the end if something isn't passed that really helps to
solve the gap - any broad-based tax - it would be a shameful
thing to be left with making cuts to the poor. He urged the
committee not to pass SB 340.
Number 0760
MR. NORDLUND replied to a question from Chair Coghill that for
individuals on SSI and APA who also receive food stamps, he did
believe that SB 340 would reduce those food stamps benefits.
Number 0804
REPRESENTATIVE JAMES said she doesn't know what is going to be
done to solve the fiscal issue, but there is a good reality that
the permanent fund dividend will be reduced in the future. It
has to be realized that Alaska cannot tax itself enough to fill
the gap; it has to grow itself out. She asked what these same
poor people are going to do if the PFD is reduced to a smaller
amount. She wondered if they are still going to be in desperate
situations, or if they can provide for themselves in other ways.
MR. NORDLUND said that he suspected that the poor will face the
same loss of income to their family as more fortunate people if
the PFD goes down. He maintained that the poor would be
suffering at least equally with those more fortunate if that
were the situation.
REPRESENTATIVE JAMES asked if Mr. Nordlund knew how many of
these people don't get their PFD checks because they are
garnished.
MR. NORDLUND replied that the only figure he has is that 40
percent of the caseload get their PFD garnished. Some are
garnished the whole amount and some are garnished only
partially.
Number 1026
REPRESENTATIVE JAMES asked if there are any statistics in the
increase in APA and SSDI recipients.
MR. NORDLUND answered there are. The APA program has grown at
about 3 percent the past ten years.
REPRESENTATIVE JAMES reiterated that there is no empirical data
on the growth, but there is anecdotal evidence that people have
moved to Alaska because of the programs. She said she doesn't
mind helping the poor and disabled in Alaska, but wasn't sure
she wanted to take care of those from other states because
Alaska is so generous.
Number 1128
MR. NORDLUND agreed that for the last eight years the comment
that people are coming to Alaska for the good benefits has come
up. All the empirical evidence his department has been able to
discover finds that is not true. The biggest reason people come
to Alaska is because their families are up here. The second
reason is because of the impression, from the pipeline days
perhaps, that there's still a lot of employment and economic
opportunities in Alaska. There could be people who come to
Alaska because they think the welfare benefits are better,
however, he said the PFD is probably the main reason many people
move to Alaska and not necessarily because of the higher welfare
benefits.
Number 1299
REPRESENTATIVE JAMES expressed concern about Alaska's becoming a
magnet state. She asked if there was a way to tell if people
come from other states when they apply for benefits.
MR. NORDLUND said there was a place on the application to say
whether they had received benefits in another state. If they
don't tell the truth, it's fraud.
Number 1374
REPRESENTATIVE FATE asked if anyone has ever done an analysis of
either disposable or discretionary income of the people who fall
below the poverty line.
MR. NORDLUND answered not that he is aware.
Number 1460
REPRESENTATIVE STEVENS asked how the Native assistance programs
fit with Senator Phillips' chart.
MR. NORDLUND said Senator Phillips doesn't have it on his chart.
He explained that under federal welfare reform law, Native
organizations are allowed to run their own TANF [Temporary
Assistance to Needy Families] program. The TANF program is the
federal welfare program, and Alaska's state version is Alaska
Temporary Assistance Program. There are three Native
organizations in Alaska that run the TANF program. There is a
line item in the budget, Tribal Assistance, and that is where
the state grants money to those Native organizations to run that
program. The effect of this bill would also affect those
programs.
REPRESENTATIVE STEVENS asked if the Native families are an
addition to Senator Phillips' list who would be affected, or
would those families be under another category.
MR. NORDLUND said this bill causes a fund source loss to the
temporary assistance program of about $3.2 million. If those
funds are taken out of the temporary assistance program, the
Native family assistance program would also be docked the same.
The Native family assistance program is equitable with the state
program. If the state programs loses funds, then the Native
program would lose funds too.
Number 1640
REPRESENTATIVE HAYES asked about the maintenance of effort in
the Medicaid budget from the Senate numbers.
MR. NORDLUND answered that the Medicaid budget isn't funded
through a maintenance of effort. It's the traditional 50-50.
For every dollar of general fund put into the Medicaid budget, a
dollar of federal money is earned. When general funds are cut
back, the federal funds are cut back.
Number 1698
JOHN SHERWOOD, Unit Manager, Beneficiary Eligibility Policy,
Division of Medical Assistance, Department of Health & Social
Services, explained that the maintenance of effort requirements
in the Medicaid budget don't have to be worried about because
the state is spending well above that level. In the larger
budget, the state budget represents basic program growth,
increase in eligible people and is required to pay rates
sufficient to have adequate providers. The only other increase
that would be included in the budget would be things in terms of
financing where more total dollars are spent to bring in more
federal revenue.
REPRESENTATIVE HAYES reiterated that 80 percent of the 100-
percent-eligible people currently use Medicaid. He wondered how
much it would cost the state if that 20 percent went on Medicaid
because they wouldn't have their permanent fund checks during
that month. He thought it would cost more than the fiscal note
of SB 340.
MR. SHERWOOD said that has not been analyzed. These costs are
difficult to analyze because some medical expenses can be
deferred. If somebody was short of funds one month, he/she
might not necessarily seek Medicaid that month; he/she might
just defer the cost until another time. For the most part, the
people with high medical need will have the Medicaid coverage if
they are on these other programs. At any given time, the vast
majority of dollars spent are on the relatively small number of
people receiving Medicaid who were actually sick or have a
healthcare need in that month. Most people don't have
healthcare needs that need to receive on-going care. Some do,
but most of those people would probably fall into the exemption
for people receiving APA and SSI. There could be some problems
as people have less disposable income available to pay for some
of the services not covered or covered in a limited way like
dental care.
Number 1909
CHAIR COGHILL asked how the childcare assistance, rental
assistance, and those types of things are accounted for as far
as the hold harmless issue goes.
MR. SHERWOOD answered that medical assistance provided to
individuals, either through Denali KidCare or through the family
Medicaid program, would fall under Medicaid, but he believes
that a lot of support that's been provided to the family does
fall under adult temporary assistance.
Number 2036
MR. NORDLUND said there is a different set of dynamics going on
with the temporary assistance program and its attendant programs
such as childcare, work services, Medicaid, and those kinds of
things. The cost drivers of Medicaid and the reason why there
is such a large deficit in the state are really unrelated to
what's going on with temporary assistance program. On the
temporary side, the caseload has gone down 40 percent so the
money that used to be paid to those families in benefits, some
of those funds have been reinvested into childcare and services
that do help social workers at DFYS. There has been some
reprogramming of those funds. Mr. Nordlund emphasized that
there still has been a net savings to the general fund, that has
grown to about $50 million annually, due to welfare reform. It
is not entirely correct to say that money has just been shifted
from welfare payments over to other services. There has been a
net savings to the general fund. He said that there are
separate issues on the Medicaid side that drive the cost of
Medicaid [up].
Number 2121
CHAIR COGHILL agreed they are talking about two different things
although they convert. For example, the daycare assistance
dollars that are significantly federal are in fact taking the
place of what would normally have been paid under ATAP, so that
isn't seen in the general fund, but it's still dollars there.
The dollars are equal; they're just coming out of different
pots. Welfare is not reduced; it just changes how it's done.
In many cases, it is making people more productive, but it is
still getting welfare from the government.
MR. NORDLUND said Chair Coghill was basically correct in what he
said. Instead of spending money on welfare payments, it's
helping with childcare payments, and that's certainly better
because childcare is much closer to getting that person on the
road to total self-sufficiency because they're working.
However, it's not a one-to-one relationship. The money taken
from welfare payments and put into childcare is not equal to
that savings. There are families who have entirely gone off
public assistance and don't receive childcare because of the
effects of welfare reform. He reiterated that there is a net
savings.
Number 2250
CHAIR COGHILL noted that the whole human services area is a
significant portion of Alaska's budget, and Alaska has been good
to people. He doesn't want people to characterize this hold
harmless thing as pulling the rug out from under them; it isn't.
In the whole context of issues, certainly it is robbing Peter to
pay Paul, but so are taxes, whether it's federal taxes or
whatever else is done at the community level on matching grants,
et cetera. He agreed this is a complex issue.
REPRESENTATIVE HAYES asked if SB 340 would have any effect on
HB 402.
Number 2365
MR. NORDLUND said there isn't a direct effect except to say that
HB 402 will give the department more tools to help people reach
self-sufficiency. The more people who reach self-sufficiency,
the less draw there will be on the permanent fund earnings to
pay for this program.
CHAIR COGHILL asked if recipients are helped with budgeting.
MR. NORDLUND said that case management is provided to clients
and case managers do work with clients on their family
budgeting. Unfortunately, on the APA side, the APA caseloads
are very high for individual workers, so they don't have the
time to spend with clients that they would like.
MR. NORDLUND replied to a question from Senator Phillips. As he
remembers the history of this, originally when the hold harmless
program was created, it was paid for with unrestricted general
funds. The funding source changed some time ago when the
legislature changed it to come out of the earnings of the
permanent fund, which is also general fund [money].
SENATOR PHILLIPS disputed that because the $27.34 comes out of
Alaskans' PFDs.
CHAIR COGHILL asked what the actual fund source is for the
dollars withheld from the permanent fund dividend for the hold
harmless provision.
Number 2621
NANCI JONES, Director, Central Office, Permanent Fund Dividend
Division, Department of Revenue, answered that it is in the
formula for the dividend calculation. The departments get their
appropriation from the average five-year earnings of the
permanent fund. That's the source of all the appropriations.
The Department of Health & Social Service has allowances whereby
it estimates how much it will need for its various programs, and
[those monies] are appropriated annually by the legislature.
SENATOR PHILLIPS explained that the $27.34 would be reduced to
around $16, which would take care of APA and SSI recipients.
Number 2915
CAREN ROBINSON, Lobbyist for Alaska Women's Lobby, testified
that she hoped this bill will be tabled in this committee. She
told the members that most of the areas of concern have been
spoken to. She expressed concern on the designation of funds
that could not be guaranteed that next year or the following
year that the money taken from these recipients would then go
into Medicaid, which is the intent of this legislation.
Secondly, she stated her hope that the committee clearly knows
whom this would hurt. Many of the adults who will be hurt are
lifelong Alaskans. Possibly through death of a spouse or
because of illness, people could fall under the temporary
assistance program and would lose their permanent fund
dividends. She said the Alaska Women's Lobby is also concerned
about the women who are victims of violent crimes. A large
number of recipients are women who are domestic violence victims
or sexual assault victims, or their children are victims of
sexual assault.
TAPE 02-49, SIDE B
Number 2965
MS. ROBINSON said they shouldn't be punished and lose their
permanent fund dividend because of a situation in which they've
had to get assistance from law enforcement and have had to leave
their homes, and possibility leave their communities and jobs to
get away from a very violent situation. She said [the Alaska
Women's Lobby] is concerned about what SB 340 will do to those
women and children. She encouraged the committee to ask all the
questions. She has talked to a lot of people and found out that
the PFD has become a necessity whether they have money or not.
Number 2886
CHAIR COGHILL said he doesn't see this as punishing people when
society has been very benevolent in many ways. Society has
agreed to help the less fortunate and has done a good job. When
it comes to this type of income, he struggles with being asked
to accept it and say it's not income for these services. It is
a priority choice.
CHAIR COGHILL closed public testimony and announced that SB 340
will be held over.
ADJOURNMENT
Number 2818
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
12:40 p.m.
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