1997-01-16                     Senate Journal                      Page 0067
SB 54                                                                        
SENATE BILL NO. 54 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, Judiciary 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.                 
                                                                               
Governor's transmittal letter dated January 16:                                
                                                                               
Dear President Miller:                                                         
                                                                               
As part of my Administrations effort to reduce state spending and              
address our budget gap, I am reintroducing a bill that sets income             
limits on the longevity bonus.  These limits would be set so that              
only those senior citizens in upper income brackets who least rely on          
the bonus would no longer be eligible for the program.  I asked the            
legislature to consider this proposal last year and still believe it is a      
responsible approach to our need to cut state spending.                        
                                                                               
This bill would limit the longevity bonus to those senior citizens             
with gross incomes of less than $60,000 a year or, for married                 
seniors, a combined annual gross income of $80,000.                            
                                                                               
Although the 1993 amendments to the bonus statutes closed the                  
program to any new applicants as of this year, the savings over the            
next few years are relatively small.  The plan presented in this bill          
is estimated to reduce program costs by about 8 percent, or about $6           
million annually.  Another $2 million would be saved in                        
accompanying hold harmless provisions of the Adult Public                      
Assistance budget because the federal government will not count the            
longevity bonus against public assistance payments if the bonus                
carries an income restriction--such as contained in this bill.                 
                                                                               

1997-01-16                     Senate Journal                      Page 0068
SB 54                                                                        
This proposal does not needs base the bonus program which some                 
seniors oppose, believing that equates to welfare.  Approximately 92           
percent of seniors currently on the program, or more than 25,000               
people, would see no change in their bonuses.  The relatively high             
income level of $60,000 means the bonus would not just be limited              
to those seniors at lower incomes, but would continue to recognize             
the contributions of our Alaska seniors.                                       
                                                                               
This bill considers only income, not assets, so recipients with                
moderate incomes will continue to receive the bonus even if they               
own valuable but non-liquid assets, such as homestead property or              
a residence which has greatly increased in value over the years                
Also, a senior made ineligible for the bonus by this law would be              
reinstated to the program if his or her income later dropped below             
the cutoff levels.                                                             
                                                                               
This proposal is a logical approach to trimming our budget gap                 
without reducing essential programs and services to our residents.             
I urge your consideration of this measure.                                     
                                                                               
						Sincerely,                                                               
						/s/                                                                      
						Tony Knowles                                                             
						Governor