Legislature(1999 - 2000)
04/12/1999 09:07 AM Senate FIN
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SENATE BILL NO. 40
"An Act relating to eligibility for the longevity
bonus; and providing for an effective date."
ALISON ELGEE, Deputy Commissioner, Department of
Administration testified to this bill that was submitted at
the request of the Governor. She told the committee the
bill would take the existing longevity bonus program and
amend it to provide for an income cap for eligibility. The
proposed income cap would be $60,000 for a single
individual and $80,000 for a married couple.
The proposal would disqualify individuals who exceeded
those income limits in the qualifying year. It would not be
a permanent disqualification. Instead, the senior would be
suspended, and if they continued to meet the other
eligibility requirements, such as residency, they could
return to the program if their income fell below those
levels.
In looking at the longevity bonus program, Alison Elgee
shared that the feeling was that a number of seniors
depended on longevity bonuses for their monthly expenses.
However, the seniors earning above the proposed income cap
levels were not dependent upon the bonus for day-to-day
living expenses.
She concluded saying, it was a concern that so much of
state spending was on the pass-through side. This was the
Governor's attempt to propose a means to reduce some of the
formula program expenses in a way that would be least
harmful to the people that were currently benefiting.
Co-Chair John Torgerson asked about the provision to verify
the gross income amounts and required the applicants to
provide access to records. He wondered why the department
didn't just refer to tax forms for income verification. He
thought the income amounts should be taken straight from
line 33 of the 1040 IRS forms. Alison Elgee replied that
was an approach that would work.
She noted that to implement the program, the department
would need to reprogram their computer system. She also
anticipated there would be more disputes and more hearing
officer time would be required to address those.
Co-Chair John Torgerson asked about verification of all
participants in the program. Alison Elgee said the
department would expect individual certification of their
own income, but that the department would request records
from participants in the case of an audit.
Co-Chair John Torgerson asked if the department felt it
would be an unjust burden to require submittal of a copy of
the 1040 form. Alison Elgee answered it would be a policy
call of the Legislature. She noted earlier concerns about
providing the state too much information.
Co-Chair John Torgerson wanted a definition of "income
received from bonuses" as stated on line 13. Alison Elgee
explained that was the longevity bonus itself. This would
prevent someone from becoming disqualified simply due to
the receipt of the longevity bonus the previous year.
Senator Randy Phillips questioned the preference given to
single people over married couples. He wondered if this
would be an incentive for seniors to dissolve marriages or
"live in sin" to manipulate the system. Alison Elgee had no
comment.
Senator Randy Phillips warned that if this bill passed,
that would happen. He said it was not unheard of to have
unmarried seniors living together to meet their cost of
living. Co-Chair John Torgerson asked if the department
planned to verify where recipients lived. Alison Elgee
responded that the longevity bonus program had always
operated on an honor system and the department had very few
problems as result of that. She noted they did do periodic
verifications against the Permanent Fund Dividend records.
The Legislative Audit Division reviewed the longevity bonus
program rolls in the past and found very few problems.
Therefore, the department did not anticipate much abuse
with the passage of this legislation.
Alison Elgee added to her earlier testimony that the
Department of Health and Social Services SSI and Adult
Public Assistance Program were federal programs that
required the longevity bonus program hold harmless the
longevity bonus recipient just as they were held harmless
for permanent fund dividends. Otherwise, they would see a
reduction in SSI. These were the programs for the poorest
seniors in the state. The way the federal legislation was
written, if the state provided an income cap in the
longevity bonus program, even though the income cap was
higher than the poverty levels, the state would no longer
be obligated to hold the SSI recipient harmless. That would
save just under $2 million general fund for the Department
of Health and Social Services.
JEFF JESSEE, Executive Director, Alaska Mental Health Trust
Authority, Department of Revenue, testified. The trustees'
interest in this bill related to their concern over the
growing need for services to elderly Alaskans. That over-
85 population group was the fastest growing segment in the
state. The need for community services, in-home support
and other alternative ways of providing services to this
group of Alaskans was going to be one of the most
significant financial challenges both to the Legislature
and to the Trust in the coming decade.
The trustees made a recommendation to the Commission on
Aging to consider modifications to programs like the
longevity bonus program as a way to create funding to
address some of these long-term issues. He gave examples
of the assisted living legislation heard in the committee
last week. One of the arguments raised was the question of
how to fund the raise in rates paid to the providers. The
trustees suggested using the longevity bonus funds to help
support these types of programs.
Senator Randy Phillips asked if any members of the public
present wished to comment on his earlier statement about
favoritism given to non-married couples. There was no
response.
Break 9:20 AM / 9:28 AM
Senator Sean Parnell offered a motion to move SB 40 from
committee. There was no objection and it was so ordered.
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