Legislature(2001 - 2002)
04/23/2002 03:03 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
SB 182 - PRO RATA REDUCTIONS IN BENEFIT PROGRAMS CHAIR DYSON announced that the next order of business would be CS FOR SENATE BILL NO. 182(FIN), "An Act requiring reductions in payments to individuals under certain benefit programs if appropriations are not sufficient to fully fund the statutorily established levels of payments." Number 1791 MARILYN WILSON, Staff to Senator Dave Donley, Alaska State Legislature, presented SB 182 on behalf of the Senate Finance Committee, sponsor. She read the following: Committee Substitute for SB 182 recognizes the reality that funds may not always be available to fund individual benefit payments at the statutorily suggested level. If this should occur, individuals who rely on these programs would only receive benefits until the money runs out for that fiscal year. This legislation provides a contingency in the event that a funding shortage occurs in the future. Senate Bill 182 would allow program directors to reduce benefit payments on a pro rata basis should funding for that program be insufficient. It would require proration irregardless of possible supplemental funding when so directed by legislative intent in the budget. While this would reduce each payment, it would extend payments over the full 12-month period, thus allowing the legislature and administration to respond to reductions in revenue and increases in program recipients in a simple and practical manner. This proposed bill specifically excludes loan programs, subsidies for hard-to-place children, fishermen's fund, workers' compensation fund, second injury fund, retirement programs, and programs for which other provisions of law address underfunding. Number 1855 CHAIR DYSON asked what things would be included. MS. WILSON replied that the list includes the longevity bonus program, medical assistance, catastrophic and chronic illness assistance, foster care, general relief assistance, and adult public assistance. She suggested that the administration may be able to add to the list. Number 1985 ELLEN NORTHUP, State Food Coalition, testified on behalf of the food coalition and herself. She noted that this bill does not affect her, but it could if circumstances changed in her life. She said she does have many elderly friends who would be affected by this bill. She told the committee that many elderly people count totally on the longevity bonus to make their rent payments, and it would be problematic if that fluctuates. She indicated that this bill would cause havoc among the very poor. She mentioned that she is really worried about the foster care people, because it is so difficult to get decent people to be foster parents, and there is never enough money to pay for the real support of the child. She encouraged the legislature to appropriate enough money for foster care. She urged the committee not to pass this bill. CHAIR DYSON asked Ms. Northup what she would choose when there isn't enough money to fund all the things, and it comes down to two choices: either get a little less each month or get cut off at the end of the last month or two. MS. NORTHUP answered that she believes there is a third choice of a supplemental appropriation. Number 2160 PELTON GOUDEY, Foster Care Association, testified via teleconference. He expressed concern on how this would affect foster parents, and he acknowledged how difficult it is to recruit new foster parents. He urged the State of Alaska to get additional money for these programs through sales taxes or income taxes. Number 2296 CORNELIA HUEBSCHER, National Alliance for the Mentally Ill (NAMI), Sitka, testified via teleconference on behalf of NAMI and as a consumer of these services. She read from the analysis on fiscal note number 4: Many of the individuals who rely on this monthly cash assistance lead very frugal lives and have limited resources, reductions in any amount will leave these clients with having to choose between such things as paying the electric bill or buying food. Adult Public Assistance payments have been held steady since 1993 without cost-of-living adjustments. These blind, disabled, and elderly clients have already had to cut costs just because of the higher cost-of-living in the last ten years. MS. HUEBSCHER told the committee that she receives Adult Public Assistance because she is disabled. She said she may have to choose between food and electricity. Many clients on disability due to mental health are productive community members through volunteering when they can. If this bill passes, many people will be forced into group homes or be out on the street or be in nursing homes for the elderly. She urged the committee not to pass SB 182. TAPE 02-35, SIDE B Number 2364 CHERYL JEBE, President, League of Women Voters of Alaska, read the following resolution passed by the League of Women Voters of Alaska on April 7, 2002: [Original punctuation provided] Whereas, the laws of the State of Alaska provide for assistance with basic support for low-income families, the elderly and disabled; and Whereas, basic support programs promote self- sufficiency for low-income families, and Whereas, basic support programs also allow the elderly and disabled to live with dignity in their own communities; and Whereas, SB 182 allows the legislature to disregard actual need for a benefit program, and instead under fund basic support programs; and Whereas, the state agency determining the benefit program would then be required to prorate the benefit, reducing the amount of the benefit to all recipients, and Whereas, a fluctuating benefit will cause instability in the lives of Alaska's most vulnerable citizens; and Whereas, the League of Women Voters position on meeting basic human needs calls for benefit levels to be sufficient to provide decent, adequate standards for food, clothing and shelter and to be uniform based on needs, Now, therefore, be it resolved that the League of Women Voters of Alaska opposes passage of SB 182. Number 2250 DARYL NELSON, Access Alaska, testified via teleconference. He stated that he was appalled at this bill and told the committee that people on public assistance are going to be hurt by this. Number 2218 JESSIE JOHNNIE, Elder, testified via teleconference. She told the committee that the Elders passed a resolution, and she faxed it to Representative Wilson and the other committee members. She told the committee that her Social Security check is $400 a month, and she cannot survive on that. She expressed opposition to SB 182. She reported that some of the other residents who live in the same apartments for the elderly that she does also oppose this bill. Number 2110 MARIE DARLIN, AARP, testified in opposition to SB 182. She referred to a letter from AARP that states the concerns about several of the programs that would be cut. In looking at this as a method of reducing the costs of government and budget, she indicated that there is concern about his method because many of these benefit programs are preventive measures that keep people out of more expensive programs, which can cost the state more in the long run. Number 2045 TONY LOMBARDO, Covenant House, testified via teleconference on behalf of Covenant House, a privately funded, nonprofit charity. He read the following testimony: In addition to our emergency shelter, we have a program in Anchorage called Passage House, which helps teen moms transition off public assistance and into self-sufficiency. I speak to you today on their behalf. Most Passage House moms come to us barely surviving on ATAP [Alaska Temporary Assistance Program] and WIC [Special Supplemental Nutrition Program for Women, Infants, and Children]. We help [them] stabilize their lives, find affordable day care, learn life skills like money management, find a job and over the course of about 18 months, [and] transition off of public assistance. They come to us because they know that they are barely making it, and often fear that one false step will result in life on the street and possibly [the] loss of their children or child to the state's protective custody. The uncertainty that this bill would create in the meager budgets of young moms, like those coming to Passage House, is too great. Those teen moms who could otherwise come to us for help might lose their children to state services before they ever get to Passage House. We need less babies in state custody, not more. We need more programs transitioning poor moms and babies into self-sufficiency and off public assistance, but these moms do not need any more financial crisis or uncertainty. In addition, if this bill passes, foster parents would not necessarily know from month to month how much income to factor into their budget. The added difficulties could discourage foster parents from participating in the program. We already have a shortage of foster care homes in this state. If we wreck the fragile homes maintained by moms like those at Passage House, the state will need somewhere to place those children. In short, Covenant House is opposed to the apparent intent of this bill. It would be unreasonable to introduce our state budgetary uncertainty into the health, safety and welfare of our poorest families. Thank you. Number 1964 LYN FREEMAN, Executive Director, Alaska Commission on Aging, Division of Senior Services, Department of Administration, testified that the commission passed a resolution opposing SB 182, and she reviewed the resolution for the committee. Essentially the primary role of these basic supports is to allow a consistent way for individuals to pay for the most basic expenses of living, food, shelter, clothing, medical, and transportation. It would allow Alaskans to live independently and in communities of their choice. She stressed that that is very important to the commission. She noted that these basic supports also avert problems such as homelessness and prevent the higher costs that often come in hospitals and nursing homes. She summarized that the Alaska Commission on Aging opposes efforts to prorate these most essential programs. She urged the committee to oppose SB 182. Number 1910 MARIE LAVIGNE, Executive Director, National Association of Social Workers (NASW), Alaska Chapter, testified via teleconference. She said NASW represents over 500 social workers in Alaska. This professional social worker organization serves Alaska's most vulnerable citizens: the poor, the elderly, the disabled, those in foster care, and working families on assistance; those very citizens who will be impacted if SB 182 passes. She declared that the NASW strongly opposes this bill. MS. LAVIGNE expressed three main concerns on SB 182: It erodes the safety net for those who are the most vulnerable; it unfairly targets those living on fixed incomes; and it circumvents the budget process. For the blind, the disabled, the elderly, the poor, and children in foster care who receive benefits, such programs are their safety net. The vulnerable Alaskans are able to meet their basic needs and work towards self-sufficiency through the benefits they receive. Yet SB 182, if passed, will unfairly target those on fixed incomes. It's heralded as a cost saving, but SB 182 will pass the budget shortfalls back onto the most vulnerable Alaskans by reducing monthly payments to all beneficiaries. Number 1830 MS. LAVIGNE asked the committee to imagine living on a fixed income and having it fluctuate without warning because of budget shortfalls. This bill directly impacts those on limited incomes, but it also impacts landlords, utility companies, and small businesses. This is a step backwards in welfare reform, she commented. She pointed out that NASW is also concerned that this bill circumvents the budget process. Its passage would mean that the level of assistance provided by these programs could plummet from one month to the next without warning, without public debate, and without legislative change in the statutory formula that now governs benefits. The bottom line is there needs to be a long-term fiscal plan and not more budget cuts. She urged the committee to stop this bill from going forward. Number 1776 ALISON ELGEE, Deputy Commissioner, Department of Administration, agreed that SB 182 would affect the Longevity Bonus Program if the legislature chose to prorate benefits by making a budgetary decision. She pointed out that the committee has heard all the social reasons why this is a very bad idea. She indicated that it impacts the poorest seniors the most dramatically, and those same seniors could be impacted at the same time by a cut to Adult Public Assistance. People on fixed incomes would be very vulnerable to the ability to pay bills if the assistance payments fluctuate. More than that, the department opposes the process by which those decisions would be made. The idea that a decision could be made to amend the Longevity Bonus Program by a budget committee operating in a conference committee environment at the end of session and not have any public debate about the consequences of those actions is wrong. She commented that if the legislature wants to change the level of benefits, it should be done through the regular statutory review process. Number 1680 ELMER LINDSTROM, Deputy Commissioner, Department Health and Social Services, testified that the department believes the following programs will be impacted: Foster Care Program, Alaska Temporary Assistance Program (ATAP), Longevity Bonus Program, and Adult Public Assistance Program (APA), which is the cash assistance to the blind, disabled, and elderly. He suggested that there may be some unintended consequences as well. MR. LINDSTROM pointed out that ATAP and APA are not extravagant benefit programs. He referred to the handouts that show the Alaska Poverty Level for ATAP and APA. He told the committee that neither of these programs is adjusted for inflation in any way. The value of those benefits has eroded over time by virtue of inflation. Someone receiving ATAP benefits in 2002 as the only source of income is at the 59 percent poverty level. The APA has eroded from 110 percent of the federal poverty level back in 1992 to 99 percent of the federal poverty level in 2002. He commented that is not an extravagant lifestyle. MR. LINDSTROM expressed concern about these benefits getting reduced at the end of session with no public input. He suggested making any changes to the programs through the normal statutory process, not simply as a budget adjustment by the conference committee. Number 1444 REPRESENTATIVE JOULE noted that these programs had already been reduced a small percentage in the budget and wondered if SB 182 passed, what additional reduction might there be. MR. LINDSTROM replied that he couldn't predict that at this point; there are too many uncertainties. Even if the legislature intended to fully fund a program, things can happen during the year, and the state could be short funded. A number of these programs are dependent on federal funding sources, which are somewhat stable, but things could come up to change that. He reiterated that there is a lot of potential for unintended consequences. Number 1177 REPRESENTATIVE STEVENS asked Mr. Lindstrom to comment on the testimony about people being forced out of their homes into state-supported long-term care. MR. LINDSTROM answered that he didn't have any data to support that, but intuitively, it seems apparent that that is a likely outcome in some cases. People are trying to remain in their homes independently, and yet they are on a fixed income. If their income is reduced, at some point they are going to have no other choice but to seek assistance, which would likely be more expensive to the state. CHAIR DYSON commented that the budget is the best estimate, but often the legislature passes a supplemental budget to make up any shortfalls. He wondered if the legislature has ever not funded a supplemental budget for these programs. MR. LINDSTROM replied that he had no recollection of a situation such as that. CHAIR DYSON asked what would happen if the legislature did not fund the shortfall in the supplemental. MR. LINDSTROM answered that these programs are entitlements. He used foster care as an example, and said he assumes if they have children to place in foster families, at the end of the day, there would be a legal obligation to reimburse those foster families. Number 0854 MS. ELGEE responded to the question by Representative Stevens on long-term care. She explained that the CHOICE [The Community and Home Options to Institutional Care for the Elderly and Disabled] waiver for the elderly program administered through the Division of Senior Services is for people who qualify for nursing home care. They could be in a nursing home, but they choose to remain in their own homes. Medicaid only pays for services; it does not pay for the cost of living, whether its room and board in an assisted living environment or the room and board at home. She reported that there are approximately 1,500 people on the CHOICE program, and two-thirds of those people live in their own homes. Those are the people at risk if the underlying support is cut. Number 0795 THERESA TANOURY, Director, Central Office, Division of Family & Youth Services, Department of Health & Social Services, testified about the impacts of SB 182 on the Foster Care Program. She confirmed that the foster parent stipend is very low, and people don't become foster parents to get rich. Currently, the foster care payment is set at the 1993 poverty levels. Alaska is well below where it needs to be in paying foster parents for the care they provide. Foster parents going in to this know that they're not going to get rich or make money on this. The average payment is $22.34 a day. MS. TANOURY expressed concern about telling foster parents that the payment may be reduced, and that could cause uncertainty in a child's life if he/she can't remain in that home. Many foster parents have told her that they can't afford to lose money on this. There is a struggle today to recruit and retain foster parents, and she said she thought that SB 182 would hurt those efforts even more. She indicated that some of the foster kids will have to be put in care that will cost more. She encouraged the committee to think about the impacts of this bill on the Foster Care Program. Number 0599 KATHLEEN WARWICK testified on her own behalf as a resident of Mountain View Apartments. She wondered how she would be able live on APA if the benefits were cut. Number 0540 PAULETTE ALDEN testified on her own behalf as a resident of Mountain View Apartments. She is on APA, and if it is cut, she told the members that it will hurt her and everyone who is on APA. She said it wasn't fair. Number 0470 EUGENE WARWICK expressed concern about living on $10 worth of food stamps a month. CHAIR DYSON closed the public hearing on SB 182. He announced that SB 182 would be held over.
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