HOUSE BILL NO. 263 "An Act extending senior benefits." 1:36:21 PM Representative Costello moved the House Health and Social Services Committee bill version before the committee. REPRESENTATIVE MIKE HAWKER, SPONSOR, relayed the change made in the CS tightened up the bill title to specifically reference the Alaska senior benefits payment program. The bill would extend the existing senior benefits program for six years from June 30, 2015 to June 30, 2021. Co-Chair Stoltze remarked that the largest issue was the "lengthy" extension. Representative Hawker stated that the opinion was that of the co-chair. Representative Hawker communicated that the bill would provide a needs-based financial supplement to seniors in Alaska based on the federal poverty level. The program offered a $250 per month stipend to seniors who fell below 75 percent of the federal poverty level, $175 to seniors at the 100 percent federal poverty level, and $125 to seniors at 175 percent of the federal poverty level. He addressed the length of the extension in relation to the number of seniors benefitting from the program and the relatively small stipend. The average age of the recipients was 75; the benefits served seniors up to the age of 103. The population was increasingly aging and vulnerable and faced escalating medical, housing, and food costs. The bill helped to provide elderly Alaskans who had the least resources and most limited ability to secure employment with a relatively small stipend to support their lives. The program provided assurance and comfort to the state's senior citizens. He stressed that it was the legislature's priority to be concerned about senior citizens in the state. He addressed the length of the program extension and believed that for the price of the program it should be one of the state's highest priorities. He opined that because the program was a high priority, a long-lived extension was warranted. 1:41:20 PM Representative Hawker spoke to the reason the program was not open-ended and implemented in statute. He was proud of senior advocates who had communicated that it was important to revisit the issue over time. He elaborated that it would be necessary to evaluate the program parameters in the future to determine whether it remained viable. He hypothesized that the world could change sufficiently in six years and increasing the program's generosity could be warranted at that time. He relayed that the maximum time for extending boards and commissions was eight years; the bill's six-year term communicated the legislature's commitment to seniors in the state. The extension would ensure certainty for the individuals benefitting under the program and would also allow the legislature to revisit the issue in a reasonable period of time. 1:43:12 PM Co-Chair Austerman did not disagree with statements made by Representative Hawker; however, he believed under the current budgetary circumstances that the extension should be shortened to three years. He agreed that perhaps in six years the program benefits could be increased if the state was facing an improved financial environment. He was currently uncomfortable extending the program too far out into the future. Representative Gara appreciated the bill. He relayed that had introduced a similar bill with other minority members. He discussed the former longevity bonus program that did not have a sunset; however, as beneficiaries passed away the cost of the program declined. He supported the senior benefits program. He opined that it was difficult to argue when the sunset should occur. He discussed that the bill was fair and fiscally conservative given that benefit levels had not been raised. He noted that a number of seniors may contend that benefit amounts had been eroded by inflation. He understood leaving the benefits at the current level given the state's fiscal situation. He believed a six-year extension was appropriate. Co-Chair Stoltze noted that Representative Hawker had sponsored the initial bill related to the program and wondered if the Senate had increased the benefits in the past. Representative Hawker replied that he had offered the bill in 2007 and did not believe the benefits had been changed since its introduction. 1:47:48 PM Representative Wilson asked whether a program recipient would continue to receive the benefits after moving into a state-run Pioneer Home. She wanted to ensure the state was not paying the benefits to a state agency. She was in favor of the program. Representative Hawker pointed to a Senior Benefits Program Fact Sheet dated January 31, 2014 (copy on file). He relayed that payments were not available to seniors living in prison, a nursing home, an Alaska Pioneer or Veterans Home, or in a public or private institution for mental disease. Representative Wilson reiterated her prior comment and was in support of funds going to program recipients. 1:49:11 PM Representative Costello spoke in support of the legislation. She recalled when a prior iteration of the program had been implemented after the longevity bonus had been discontinued due to budgetary reasons. She pointed to page 2 of the Senior Benefits Program Fact Sheet; the number of beneficiaries was 4,000 in Anchorage and 10,954 statewide. She referred to the annual gross income limit of $10,935 for the $250 benefit. She believed the numbers were amazing and that the program was very important. She opined that because the state was in a difficult budgetary situation it was important to send the message that the state was committed to the senior population. She was in favor of extending the program out into the time period when state revenues would be more challenged. She spoke about an 83-year-old family friend. She believed that seniors worried about the responsibilities they were placing on younger generations. Representative Guttenberg imagined that when the legislature debated the continuation of the program during the budget-crunch time that it would be difficult to discontinue it. He believed the program represented one of the backstops the state had for Alaskans. He was sorry when the longevity bonus had been eliminated. 1:53:03 PM Representative Edgmon thanked the sponsor for offering the bill. He looked at the three monthly benefit tiers [shown on the Senior Benefits Program Fact Sheet] and guessed that elderly rural beneficiaries fell under the higher monthly payment [$250]. He surmised that similar to the Low Income Heating Assistance Program that the per capita amount of the benefits was slightly higher going to the bush. He knew that the $250 went a long way for many elders in his district. He appreciated the bill. Representative Hawker respected and understood the earlier point raised by Co-Chair Austerman. He spoke to the uncertainty of the current budget and about the optimal fiscal times of the past ten years. He acknowledged that the state was entering a period of fiscal uncertainty; but he believed the program should be extended six years instead of three because it was a matter of communicating the legislature's priority. The program amounted to $20 million. He stressed that extending the program for six years provided extra assurance to individuals that it would not be competing for funds with other programs during that period of time. He questioned whether it was a higher priority to provide a stipend for seniors or a stipend for film subsidies; he landed on the side of seniors. He wanted the legislature to make the greatest possible statement of policy that it supported the small stipend for the lowest income segment of the state's senior population. 1:57:33 PM Representative Guttenberg thanked the department for the helpfulness of the Senior Benefits Program Fact Sheet. Co-Chair Austerman believed he and the sponsor shared the same goal, but had different ideas about the appropriate timeline. He discussed the governor's proposed cuts of $30 million to agency operations. He stressed that the senior benefits program was not on the chopping block. He could see three years into the future but it was difficult to know how the state's fiscal environment would look beyond that time. He believed a three-year extension was appropriate. Representative Wilson appreciated the bill, but believed seniors recognized that the state was experiencing a challenging budgetary environment. She did not believe reducing the sunset to three years communicated that seniors were not a top priority. She mentioned K-12 education as another top priority. She believed it was hard to decide between extending the sunset for three or six years; however, she believed a three-year extension was appropriate given the current fiscal climate. Representative Edgmon remarked that there was more than one way to look at the issue. He pointed out that seniors were the fastest growing sector in the state's population. He spoke to their value to the state and to the value of the program. He believed a six-year extension would keep the program off of the chopping block. He supported maintaining the current bill language. 2:01:29 PM Representative Hawker explained that three years earlier the program had been extended for three years. He shared that the amount of senior benefits had not been changed. He detailed that the Senate had added four sections that had increased the personal needs allowance for individuals residing in long-term care facilities (including nursing homes, Pioneer Homes, and Veteran Homes) to $200 per month. The residents had been ineligible for senior benefits; therefore, the change provided them with the $200 per month stipend. Representative Munoz referenced the Senior Benefits Program Fact Sheet. She wondered how the provision determining that program eligibility did not look at asset ownership had been established. Representative Hawker answered that the decision had been a policy call when the original legislation had passed. He explained that the legislature had decided to format the program as a current income-based program. The legislature had determined that it did not want savings to count against the program. He detailed that factoring in assets involved many judgment calls that he had wanted to avoid (e.g. house size, geographical location, and other). He added that the assumption that a person with substantial liquid monetary assets would have substantial liquid income had been contemplated when deciding to make the program income-based. 2:05:01 PM Representative Costello asked what percentage of the recipients were WWII veterans. Representative Hawker responded that he did not know. He thought the department may have detail on the question. He relayed that the average age of a recipient was 75 and the maximum age was 103. The sector included the age group that was passing away the quickest. Co-Chair Stoltze made a personal comment related to a family member. Representative Costello shared that her father had served in WWII. She surmised that seniors who had served in WWII represented around the median age of seniors benefitting from the program. 2:06:43 PM Representative Hawker spoke to a statistical analysis the department had prepared at his request (he would provide the document to the committee). He shared that 49 percent of the beneficiaries were 80 years of age or older; 35 percent were under 75; and individuals between the ages of 75 and 79 accounted for approximately 25 percent. He surmised that the most common age was between 75 and 79; however, the program was heavily skewed to individuals over the age of 80. Co-Chair Stoltze CLOSED public testimony. Co-Chair Austerman appreciated that the sponsor had introduced the bill in 2007. He MOVED to AMEND the bill to reduce the extension from six years down to three years; the date 2021 would be replaced with 2018. Representative Gara OBJECTED. Co-Chair Stoltze deferred to the co-chair on the issue. A roll call vote was taken on the motion. IN FAVOR: Thompson, Wilson, Stoltze, Austerman OPPOSED: Guttenberg, Holmes, Munoz, Costello, Edgmon, Gara The MOTION FAILED (4/6). Representative Costello discussed the fiscal note from the Department of Health and Social Services. The note included six full-time positions and had a fiscal impact of $23,090,500 in FY 15, $25,018,700 in FY 16, $25,700,400 in FY 17, $26,402,400 in FY 18, $27,125,500 in FY 19, and $27,870,400 in FY 20. Representative Hawker communicated that the six positions were a continuance of the personnel currently employed by the program. He noted that the numbers in the fiscal note were an estimate by the agency. Representative Costello moved the MOVED to REPORT CSHB 263(HSS) out of committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION CSHB 263(HSS) was REPORTED out of committee with a "do pass" recommendation and with one previously published fiscal impact note: FN1 (HSS). Representative Hawker appreciated the committee's attention to the bill. He observed that the issue raised by Co-Chair Austerman was legitimate and would be a concern addressed by the legislature on many issues. 2:13:44 PM AT EASE 2:17:00 PM RECONVENED