1996-01-12                     House Journal                      Page 2435
HB 417                                                                       
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Administration, 1/12/96                                  
Fiscal note, Dept. of Health & Social Services, 1/12/96                        
Zero fiscal note, Dept. of Health & Social Services, 1/12/96                   
                                                                               
                                                                               
The Governors transmittal letter, dated January 12, 1996, appears              
below:                                                                         
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
Under the authority of art. III, sec. 18 of the Alaska Constitution, I am      
transmitting a bill that makes Alaska senior citizens with high incomes        
ineligible to receive the longevity bonus.  The bill also disqualifies         
longevity bonus recipients who are absent from the state, for reasons          
within their control, for 180 days or more within any one-year period.         
I believe that these changes in the program are necessary as a cost            
containment measure as we look for ways to reduce state spending and           
to address our budget gap.                                                     
                                                                               
The income maximum portion of this bill would disqualify a senior              
citizen from receiving the bonus if his or her gross income exceeds            
$60,000 a year.  A married couple would be disqualified if the spouses         
combined gross income exceeds $80,000 a year.                                  
                                                                               
Although the 1993 amendments to the bonus statutes, which closed the           
program to people not applying by the end of this year, will eventually        
lead to reduced costs for the longevity bonus, the short-term savings          
have been relatively small, as expected.  We estimate that enacting the        
income maximum for eligibility could reduce the cost of the program            
by about eight percent, or about $6 million annually.                          
                                                                               
I am aware that many seniors within the state oppose needs-basing              
the bonus program, somehow equating it to welfare.  This bill does not         
do that.  Approximately 92 percent of seniors currently on the                 
program, or more than 27,000 people, would see no change in their              
bonuses.  Setting income caps at a relatively high level does not limit        
the bonus to only those senior citizens who rely on it for the                 
necessities of life.  Instead, the high cap is intended to take the bonus