Legislature(1995 - 1996)

1996-01-12 Senate Journal

Full Journal pdf

1996-01-12                     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                
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.                     
						Tony Knowles