Legislature(1995 - 1996)
1996-01-12 Senate Journal
Full Journal pdf1996-01-12 Senate Journal Page 2126 SB 217 SENATE BILL NO. 217 BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR, entitled: An Act relating to eligibility for the longevity bonus; and providing for an effective date. was read the first time and referred to the State Affairs, Health, Education and Social Services and Finance Committees. Fiscal notes published today from Department of Administration, Department of Health and Social Services. Zero fiscal note published today from Department of Health and Social Services. Governors transmittal letter dated January 12: 1996-01-12 Senate Journal Page 2127 SB 217 Dear President Pearce: 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 away from only those recipients who should not be even minimally affected by the loss. The bill looks only at income, and not assets, so that recipients with moderate incomes will continue to receive the bonus even if they own valuable but nonliquid assets, such as homestead property or a residence that has greatly increased in value over the years. The bill also provides that a recipient disqualified by reason of the income 1996-01-12 Senate Journal Page 2128 SB 217 maximum is not permanently disqualified. If his or her income drops, or circumstances change, the recipient can become eligible again. This will protect recipients on fixed incomes who enjoy a one-time gain from the sale of a residence or some other asset. Similarly, the bill contains a special provision for persons who become eligible for the longevity bonus by age and residency in 1996 and apply before January 1, 1997, but are disqualified because of the income maximum. If those persons subsequently become eligible, they will be entitled to $100 a month payments. The second part of the bill is intended to address a specific problem: bonus recipients who spend little of the year in Alaska, but time their absences so that they are never out of Alaska for more than 90 days at a time. The bill would disqualify recipients who are out of the state for 180 days or more in any one-year period, excluding absences beyond the recipients control. This is in keeping with the original intent of the program to assist seniors who are truly residents of Alaska. I urge your prompt consideration and passage of this bill. Sincerely, /s/ Tony Knowles Governor