Legislature(2017 - 2018)BARNES 124
03/29/2017 03:15 PM LABOR & COMMERCE
Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 142-UNEMPLOYMENT COMPENSATION BENEFITS 3:42:27 PM CHAIR KITO announced that the next order of business would be HOUSE BILL NO. 142. "An Act relating to unemployment insurance benefits; increasing the maximum weekly unemployment insurance benefit rate; and providing for an effective date." 3:42:36 PM REPRESENTATIVE TUCK described HB 142 by stating that it relates to the effectiveness of Alaska's Unemployment Insurance (UI) program. He continued as follows: The national unemployment insurance program was initially created in 1935 by the Social Security Act. Congress chose to create a national system of compensation for unemployed workers based on an insurance model rather than an entitlement program. This insurance model has worked well for over 80 years. As with any other insurance program, the objective is to underwrite and identify potential loss incurred by a small percentage of the insured through accumulation of funds collected from the group as a whole. The loss insured by the program is the loss of wages by unemployed workers. The premiums required to cover this potential loss are in most states paid solely by the employer; although in Alaska the cost is shared by the employer and the worker. We are one of three states in the nation that does this. Alaskan employers carry 73 percent of the direct cost and the workers pay 27 percent of these costs through payroll taxes. REPRESENTATIVE TUCK stated that as with any program that compensates individuals while they are not working, there may be concerns about providing a disincentive for returning to work. He said, "In striving to provide sufficient temporary income to enable workers to bridge the gap between jobs while meeting non- deferrable expenses without that disincentive, the U.S. Department of Labor encourages a target of 50 percent wage replacement to try to balance that out." He explained that wage replacement measures the state's average weekly benefit amount as a percent of the average weekly wage. According to the most recent figures published by the U.S. Department of Labor, Alaska ranks last in wage replacement at 28.8 percent, forty-fourth in the nation in terms of the average weekly benefit paid to unemployed workers - $252 per week, and 39th in the nation in terms of the maximum weekly benefit amount of $370 per week. Benefit amounts are based on the amount of wages a worker earns during a prescribed base period. Workers with higher earnings whose loss of work has a higher financial impact can receive a higher benefit amount. Representative Tuck related that under Alaska's current statute, the maximum benefit amount that can be paid to workers who have earned $42,000 or more is $370 per week, regardless whether the amount of wages lost was $42,000 or $100,000 or $200,000 per year. The current maximum weekly benefit amount represents approximately 36 percent of the average weekly wage of $1,020 in Alaska. The proposed legislation seeks to raise the maximum weekly benefit amount in Alaska to an amount that is roughly one-half the average weekly rate in the state for 2017, up to $510 per week effective January 1, 2018. REPRESENTATIVE TUCK stated that the second intent of the proposed bill is to tie future increases to the maximum weekly benefit amount to a percentage of the average weekly wage, as is the case in 36 other states. This would allow the wage replacement offered by the program to rise based on the relationship to the wages that are being replaced. He said the estimated cost to employers, for each employee earning the full taxable wage base of approximately $38,000, would increase gradually beginning in 2019 [until it reaches] an additional $233 per employee in 2023. He indicated this is over the baseline forecast, and the proposed bill would not increase the minimum wage benefit assessment. The estimated additional cost to employees earning the full taxable wage base in 2023 will be $31 over the baseline forecast. Representative Tuck advised that after December 31, 2019, the maximum weekly benefit amount would be calculated each year based on 50 percent of the average weekly wage in the state. He said tying future increases to increases in the average weekly wage over time would result in a less dramatic change to employer taxes than what the state has experienced in the past when the maximum benefit amount remained static and became less and less adequate over time, as it has since the last increase in 2009. 3:47:22 PM REPRESENTATIVE BIRCH said he had a number of letters of opposition from individuals concerned about the impact that this additional cost increment will have on small businesses during a time of economic challenge and recession. He asked what the actual cost would be to elevate this benefit. 3:47:57 PM REPRESENTATIVE TUCK said the estimated cost to employers for each employee earning the full taxable wage base of approximately $38,000 will increase gradually and be an additional $233 per employee by the year 2023. REPRESENTATIVE BIRCH asked if it would be $233 per employee per year. REPRESENTATIVE TUCK said yes, that it would be $233 per employee once it reaches its full maximum in 2023. REPRESENTATIVE BIRCH pointed out that the bill refers to base period wages and a weekly benefit amount, and he asked for clarification on the duration of a base period. REPRESENTATIVE TUCK said that he believed it is the qualifying period for someone to receive UI benefits and that it is a period of one year. REPRESENTATIVE BIRCH, referring to the table in HB 142, asked if someone with a base period of $2,500 to $2,700 per year would then be entitled to a $56 per week benefit. REPRESENTATIVE TUCK answered yes. He said that for every $250 increase in annual base period wages, the weekly benefit increases $2. However, again referring to the table in the bill, he pointed out that HB 142 would not change UI benefits for those at lower incomes. He said the change HB 142 brings to the current statute is that of an increase in the weekly benefit for those at higher income levels, and this could be seen on page 7 of the bill. He said that HB 142 would allow for those who earn more and have contributed more to the insurance program to be able to receive a larger proportion of their annual pay than what they would receive now. It would also bring benefits closer to the recommended average of the U.S. Department of Labor, as well as making Alaska current with 36 other states in the country. Representative Tuck said Alaska has more seasonal workers than any other state in the country, citing the seasonal industries of fishing, tourism, and construction, as well as the labor that occurs on the North Slope and in mining. He stated, "We want to make sure that families are able to weather out some of those ... tough economic times ...." 3:51:05 PM REPRESENTATIVE BIRCH, referencing page 8 of the bill, asked what the duration of a benefit would be in the case of a fisherman working three months and earning $50,000 annually, with a corresponding benefit of approximately $20,000. REPRESENTATIVE TUCK requested to bring Ed Flanagan of the Department of Labor and Workforce Development to the discussion to explain the number of weeks someone would be qualified to receive a benefit. 3:51:59 PM ED FLANAGAN, Director, Central Office, Division of Employment & Training Services, Department of Labor & Workforce Development (DLWD), responding to the question from Representative Birch, said fishermen are not covered under UI. He added that the maximum benefit for a seafood processing worker would be 26 weeks. He also said that in the past, a claim could be extended under a federal extended benefit program, which would add up to an additional 13 weeks of benefits. In the 1980s, the program was changed to address claims from workers with earnings that occurred in only one quarter. Mr. Flanagan offered his understanding that at least 10 percent of earnings occur in a second quarter. In addition, there is "a differential ratio" utilized to determine the length of the benefit period based on how well earnings were distributed over the entire year. He said that earnings occurring in just two quarters would result in a maximum benefit period of 18 weeks rather than 26 weeks. REPRESENTATIVE BIRCH said the concern voiced to him was that of the cost impact on an employer and "certainly not a reflection on the individuals involved." He also said he wasn't aware of the mechanics of the system, for example, how it would prevent a situation where someone could work for only three months and then "basically kick back for nine months." MR. FLANAGAN said that such a situation was not possible and that he would not presume to tell an employer at any time, let alone in troubled times, that $233 per employee five years out is not something they should be concerned about. However, he would encourage employers to think about how UI benefits support many communities, especially those that have strong seasonal workforces. He noted that he feels we lost something when we went away from paper payroll checks, as people would cash those checks after hours at a time when there were limited banking and credit card options. He summarized by saying he thinks there are employers that understand UI benefits not only help the worker but also insure the community. 3:54:25 PM REPRESENTATIVE JOSEPHSON asked Representative Tuck to explain his earlier statement, which indicated Alaska is one of only three states that does or does not "do something." REPRESENTATIVE TUCK responded that Alaska is one of only three states where employees contribute to their unemployment insurance program. REPRESENTATIVE JOSEPHSON then made the point that in addition to Alaska's [UI benefit] rates not being anything close to a livable wage, the state is one of only three that require employees to contribute to their UI program. REPRESENTATIVE TUCK added that he did not recall the names of the three other states, but that of the three, Alaska has employee contribution rates that are significantly greater. REPRESENTATIVE JOSEPHSON asked why the sponsor of the bill did not want to [increase] the lower wage earner's rates. 3:55:24 PM REPRESENTATIVE TUCK said that the bill was focused on providing UI benefits to higher income wage earners and, in doing so, balancing the increase in benefits with the associated additional cost to the employee. He emphasized his concern that Alaska retain skilled workers and support industry and employers, while sharing the burden "on both sides." 3:56:15 PM REPRESENTATIVE WOOL asked if the annual salary is calculated based on a weekly salary extrapolated over 52 weeks. 3:56:25 PM MR. FLANNAGAN answered no; it is based on actual earnings during the base period. He gave the example that if someone filed a new claim this week, then all the wages for the period October 1, 2015, to September 30, 2016, would be considered. If a claim was filed next week, when it would be a new quarter, the earnings period would be the calendar year 2016. He said there is no averaging or smoothing; and that it is the actual earnings that are utilized. REPRESENTATIVE WOOL said that the reason he asked was because he knows that some people work seasonally and [become unemployed] following a season of high earnings, and he wanted to confirm that someone who, for example, earned $1,000 per week for 3 months (for a total of $12,000) would fall under the $12,000 category and not the $48,000 or $52,000 category. MR. FLANNAGAN stated that's correct. REPRESENTATIVE WOOL asked for confirmation that under his prior example, the UI benefit would be $132 per week, even though earnings were $1,000 per week for one quarter. MR. FLANAGAN stated that this is correct. He added that if the beneficiary had dependents, then he/she would be eligible for an additional $24 per week for up to three children. 3:58:15 PM REPRESENTATIVE SULLIVAN-LEONARD pointed out that the existing statute describes the eligible individual, and then asked how a benefit is calculated for a family. MR. FLANAGAN stated unemployment insurance is based strictly on the individual, with the possibility of a dependent child allowance of $24 per child to maximum of three. He said that this has been in statute for some time. He added that there is no measure in any system nationwide regarding family income. REPRESENTATIVE SULLIVAN-LEONARD asked what the fiscal note might be, noting that it was shown as zero. MR. FLANAGAN said that the fiscal note reflects the agency cost, and in this case, it is de minimis, if calculable. He indicated that a change in benefit amount does not change the cost to the agency. He said if Representative Sullivan-Leonard was asking for the cost to individuals or businesses, it was his understanding that this was never reflected in the fiscal note. 3:59:58 PM REPRESENTATIVE SULLIVAN-LEONARD asked if there was a way to quantify what the financial impact is going to be, not only to the department but also what the benefits would show for the individual as well as for one, two, or three children. She asked if there was a way to calculate what it would be annually. MR. FLANAGAN said he could provide the agency's annual projections on what it expects to pay. He said the benefits paid out have never been considered relevant to the fiscal note. REPRESENTATIVE SULLIVAN-LEONARD said that she was looking for those dollar amounts, especially since there is a request to increase the unemployment insurance for both the employee and the employer. MR. FLANAGAN said it was those dollar amounts that were used to come up with the estimates for 2022 for additional cost versus "doing nothing." He said that they have run those numbers to figure out a "phasing up" over five years to an additional $233 per employee for the employer. He noted that this was for employees making the $38,000 or $39,000 taxable wage base. The employer's and the employee's contributions stop there. For the employee it is an additional $31 per year. These are determined from the estimate of the change in the benefits that will be paid. He said the agency can provide this information. 4:02:08 PM REPRESENTATIVE BIRCH pointed out that HB 142 would create a second, and therefore additional, increase under the UI program, as there was an earlier bill that established training as a benefit. He then asked if there are any other existing parts or if we would see any other new additions to the UI program. 4:03:08 PM MR. FLANAGAN said that he was not aware of any others or proposals for any others. He said that the two training programs Representative Birch was referring to are the State Training and Employment Program (STEP) and the Technical and Vocational Education Program (TVEP). He stated that in the past, he had misunderstood these programs by thinking incorrectly that because there is a diversion from the employee share, it is an additional cost to the employee. He explained that the cost of the program is determined on a 73 percent employer/27 percent employee split, and it is after that split that the diversion is made. He said that employees don't pay more except over time in the long run, because some money is not coming out of the trust fund that otherwise would. He said he could provide even more detailed information if requested, as he had a staff member from research and analysis on hand. CHAIR KITO said additional information would not be necessary as the issue was not related to the bill. 4:04:10 PM REPRESENTATIVE KNOPP directed attention to Section 2, on page 9 of HB 142, and asked what the maximum benefit would be for an individual that makes $100,000 per year. 4:04:39 PM REPRESENTATIVE TUCK offered his understanding that the maximum benefit would be $510, because the benefits "max out" at a base income of $59,500. However, he pointed out that Section 2 is "kind of a self-evaluating factor" that he mentioned earlier, which would allow the unemployment benefit to update itself based on 50 percent of the average income. 4:05:17 PM MR. FLANAGAN clarified that the current weekly benefit is $370, and under the proposed bill it would increase to $510. He added that "at the lower end it's much closer to 50 percent than it is, because it starts at that $2,500, with a benefit amount." He explained that currently an unemployed worker who made $42,000 in his/her base year receives the same benefit as a laid off worker making $84,000. Both workers would have contributed the same amount, "because $39,000 is where it cuts off for contributions." He said that the benefits are "out of whack," because the person with the higher income is going to have higher expenditures. REPRESENTATIVE KNOPP said that his interpretation of Section 2 was that the maximum benefit of $510 would increase at a rate of $2 for every $250 increase in earnings greater than $59,500. He provided a hypothetical example of an individual earning $100,000 and asked if his maximum benefit calculation of $834 for the individual (based on the language in Section 2) was correct. 4:06:50 PM MR. FLANAGAN said that he understood how Section 2 might be interpreted in that way; however, the annual income of $59,500 is a cap, and income greater than $59,500 is not considered. He explained that Section 2 would provide an adjustment to the benefit schedule by; extending it out beyond $59,500 if the average annual wage for the state increases. He added that he does not expect any adjustments in the schedule to reach $100,000 in his lifetime. He again acknowledged that this was a confusing element of the bill. REPRESENTATIVE KNOPP reiterated his interpretation that Section 2 states that weekly benefits would increase based on an "individual's base period wages," not based on changes in "state wages on an average." MR. FLANAGAN reemphasized that no one would receive a benefit greater than that listed for an income of $59,500; in subsequent years, if the average annual wage went up, say $4,000, then "they would use that column on the left to calculate a benefit which would go up another $2,000 total in the year." 4:08:35 PM REPRESENTATIVE WOOL brought attention to the language [in Section 2], to which Mr. Flanagan and Representative Knopp had referred, was on Page 9, Line 25, and read: "the department shall determine the average annual wage paid to employees". He then asked for confirmation that this referred to the "overall state average" and not individual wage. MR. FLANAGAN answered that's correct. He said the department [reviews the average annual wage], which currently is $53,000. The taxable wage base is three-fourths of the average annual wage. 4:09:19 PM REPRESENTATIVE TUCK brought the committee's attention to language in [Section 2], subsections (j) and (h), and he noted that the language in subsection (h), [on page 9], lines 15-17, refers to the ["average annual wage"] mentioned in subsection (j). 4:09:49 PM REPRESENTATIVE WOOL asked for confirmation of his understanding of the issue by providing an example where the average wage is $52,000 or $1,000 per week. He then asked if, in this situation, benefits under this section may not exceed 50 percent of $1,000 per week or a $500 weekly benefit. MR. FLANAGAN answered that is correct. 4:10:23 PM CHAIR KITO asked if Mr. Flanagan had any further comment. MR FLANAGAN stated that he would be available for questions. He added, "It hasn't been done since 2009 ..., and it is past due." 4:11:11 PM CHAIR KITO opened public testimony on HB 142. 4:11:29 PM AARON PLIKAT, President, Building and Construction Trades Council of Southcentral Alaska, introduced himself as the business agent for Plumbers and Steamfitters, Local 367 and the president of the Building and Construction Trades Council of Southcentral Alaska. He stated that as the son of a journeyman pipefitter and someone who has been in the trade for 22 years, he is knowledgeable about being out of work. He said he can tell firsthand about the pride a worker feels when completing a project, as well as the fear of the impending layoff that follows project completion. He said construction has always been a path of peaks and valleys; when it's good, it's fantastic, and when it's bad, the span between projects can be months or even longer. As a business agent, he spoke about the highly skilled craftsmen that are more than willing to perform their crafts anywhere under any circumstances. These workers and all workers should take some comfort in the fact that there is a benefit for their short-term security should their employment end suddenly or otherwise. MR. PLIKAT said the current benefit is one of the lowest in the country and has not been adjusted since 2008. He said the cost of living is increasing in Alaska. He stated support for an adjustment of the state's unemployment insurance from the current weekly maximum benefit of $370 to the proposed $510, because doing so will assist workers by allowing them the time to find long term quality employment again. He strongly encouraged the committee to support HB 142. 4:13:32 PM DOUG TANSY introduced himself as a person wearing multiple hats: current president of the Fairbanks Central Labor Council; member of the Alaska Workforce Investment Board; and member of the Fairbanks Building and Construction Trades Council. He opined that wage (indisc.) unemployed or underemployed is critical because of the high rate of seasonal employment here in Alaska. He is a construction electrician who served his apprenticeship in Fairbanks and he has experienced UI benefits first hand. He is now a member of his local apprenticeship committee, which oversees the school and the apprentices while they are in the program. MR. TANSY said the school has invested close to $50,000 in each apprentice by the time each completes the program. The benefits of the program are having journeyman-level workers available to safely and efficiently do high-quality jobs for contractors and to train the next batch of apprentices that are coming up behind them. He said that with low UI wage replacement there is a stress on individuals and families, and sometimes the way out of that stress is to look for employment opportunities in Washington, Oregon, and California. He said that when this occurs, a percentage of those who leave the state don't come back home, which results in a loss on our investment, a loss on the investment of contractors, and a diminishment of a ready workforce. This scenario is a typical setting for all construction trades, not only the mechanical trades. Mr. Tansy said the outward migration during leaner times doesn't cause only financial impact to families; he has seen it contribute to divorce or stress for children who must move to different schools and not have in place the things that are conducive to their development. He strongly encouraged movement of the proposed legislation. He noted that the groups he mentioned today have passed resolutions in support of HB 142. 4:16:48 PM BRANDON MCGUIRE expressed his support for the bill and provided an example of how it supports the working class, which not only helps drive the local economy but also the economy of the nation. He said that he has a typically employed friend that is a construction worker with the laborers union. The friend and his wife are expecting a child later this year and, as a seasonal construction worker, Mr. McGuire's friend stands a chance of being unemployed in and around the birth of his child. He noted that in a situation like this, "when Murphy's Law rears its head, every little thing helps." MR. MCGUIRE said he knows that when a person is laid off, after working for 1.5 years on a long project, unemployment checks don't cover the bills. He said Alaska is such a great state, yet it's UI benefits are low compared to those of other states in the country. Given this, he said he doesn't see how a bill like this could see any opposition, and he hopes that it will not. He opined that Alaska should lead the way in support of its working-class citizens. 4:19:03 PM RALPH KIBBY, Owner, Chatham Electric Inc, stated that Chatham Electric Inc is a statewide electrical contractor that works primarily in Southeast Alaska. He stated that his business provides the first response for many communities in Southeast Alaska and other areas, for power outages and emergencies. He said his company hires highly skilled workers, and he asked the committee to pass HB 142 to retain that highly skilled work force. He expressed concerned about workers leaving the state because their needs are not being met. He said contractors spend hundreds of thousands of dollars training their employees regardless of the five-year period required to become a journeyman. At this point, he said, whatever can be done to maintain a skilled workforce - "our brain-trust" - is going to help Chatham Electric Inc stay in business. 4:20:42 PM WALTER ROBINSON, International Brotherhood of Electrical Workers (IBEW), stated that he feels the past and current UI weekly benefit amount in Alaska is far too low. Alaska's average weekly benefit amount ranks forty-fourth nationally, yet the state has one of the highest costs of living. Having personally drawn UI benefits himself, he can attest to the fact that a $370 weekly benefit is not enough. With this amount of money, it is hard to maintain a household and put food on the table with two kids and a wife to support. Alaska is not a cheap state to live in because of the cost of housing, food, electricity, and heat. Under the current price of oil and state of the economy, he said, jobs are decreasing, and unemployment is increasing. Alaskans are going to need help in this recession to get through hard times. MR. ROBINSON said that he feels the proposed increase comes at the perfect time to ensure Alaskans will remain in the state. People on UI benefits spend money in the state; therefore, increasing the maximum weekly benefit will put more money into the economy and help the business community. He stated that people do not want to be on unemployment insurance as it is stressful not having a job while trying to pay the bills and put food on the table. The proposed legislation bill would relieve some of the hardship placed on Alaskans during the current recession and unemployment. Mr. Robinson stated that he is a proud Alaskan but feels rating forty-fourth in the nation for UI benefits is not something he is proud of. He urged the committee to move HB 142 and help Alaskans that are suffering. 4:22:50 PM LAKE WILLIAMS, District Representative, International Union of Operating Engineers (IUOE), Local 302; President, Fairbanks Building and Construction Trades Council, stated that on March 15 the council passed a resolution in support of HB 142, urging the House to pass the bill and for the Senate to take action. He said he would submit that resolution into the record. MR. WILLIAMS said as an apprentice he relied on UI benefits while he was in school to help pay bills, and when he was a journeyman he relied on them until the next job came along. He pointed out that work has slowed, with smaller capital budgets and a reduction of work on the North Slope. He said that often employers are struggling to maintain their workforce; while a lot of them will find things for workers to do, they are forced to lay people off and then hope that this skilled workforce will not leave the state. He said that this is a constant battle for employers; they are always worried about losing skilled workers. He said that [employers] are seeing more and more people "raise the white flag" and move out of state when they cannot find work or pay their bills. Some of them come back and then are referred to as "out-of-state workers." He said that it's hard to blame these people as they are going places where it is cheaper to live, but they are taking their money with them. Any little bit [the state] can do to help workers and contractors, maintain a workforce, and assist local families in getting by until the next job comes around is a smart thing to do. He reiterated his support for HB 142 and urged the committee to pass it. 4:25:02 PM BRONSON FRYE, Recording Secretary, South Central Alaska Building Trades Council, stated that he is a business representative for the Painters Union and is at the meeting to testify in his role as the Recording Secretary of the Building and Construction Trades Council of Southcentral Alaska. He said he is in favor HB 142 and, while many reasons for supporting it have been already articulated, he thinks it is notable that UI benefits have not been raised since 2009 and that the state's maximum weekly benefit amount ranks thirty-ninth in the country. He pointed out that the U.S. Department of Labor recommends a 50 percent wage replacement and that HB 142 would meet that recommendation, increasing the benefit from the current maximum benefit of $370 to a maximum of $510. He said he believes that it is also noteworthy that the State of Washington's current maximum weekly benefit is $681, almost double our $370 benefit. A benefit of $510 would bring Alaska much closer to other states in the Pacific Northwest. MR. FRYE opined that when workers lose their job, it is a loss to not only the individual but to the entire community; having adequate unemployment insurance benefits lessens that negative impact. He pointed out that Alaska is seeing a downturn in its economy and that if all the skilled workers must move Outside for work and stay there, then the state loses a major investment in time, money, training, and development of assets productive to Alaska. He warned against a situation in which the economy improves and Alaska finds itself with a shortage of workers. He indicated that [helping workers] "stay afloat" and stay in Alaska is a wise investment. In conclusion, he encouraged the passage of HB 142. 4:27:40 PM PAUL GROSSI stated that he was representing the Alaska State Pipe Trades. He stated that [the Alaska State Pipe Trades] support HB 142, as it will help unemployed workers. He said that he was hearing a lot of resistance about the proposed bill, based it not being the appropriate time to increase the benefit because there is a downturn in the economy. He provided two reasons why he thinks this is the "exact time" to increase the benefit: to help unemployed workers and to help businesses that rely on the workers as customers. He said that although the UI benefit would not replace the wages earned during employment, the lower income would provide some help to both the workers and the businesses. MR. GROSSI said he is probably the only one in the room old enough to remember the last recession. He said that he was living in Anchorage at the time, and the recession was "really terrible"; it affected him personally. He described people having to leave their homes and condos, with their furniture left behind. He also described families leaving the state with only their suitcases, after driving down to the Department of Labor to pick up their checks. He said that the bill was "not a cure for that" but would help to create a softer landing. He finished by urging the committee to pass HB 142. 4:30:09 PM REPRESENTATIVE KNOPP ventured that Mr. Grossi was referring to the recession in '85, '86, and '87. 4:30:27 PM REPRESENTATIVE BIRCH remarked there had been a lot of testimony about the job losses that are occurring and discussion on whether Alaska is or is not in a recession. He stated that from a budget standpoint, Alaska has issues to deal with at the state level and "some of us would like to see the state budget track the private budget" if there is "a contraction." He then asked if benefits are taxable as income. MR. GROSSI replied that he could not remember for certain but thinks they are taxable. 4:31:24 PM REPRESENTATIVE WOOL said that he shares the concerns of most of the people testifying and, along with Mr. Grossi, is concerned that laid off workers will go to other parts of the country and that some of them will not come back to Alaska. He said that he is not sure the $200 increase in weekly benefits that the bill would provide would be sufficient to keep a worker here when they could make "decent money" [elsewhere]. He indicated that it would be helpful if the provision under HB 142 kept people here a little longer. He ventured that the real solution is getting the economy back on line to ensure future jobs. MR. GROSSI responded, "The only real solution is a job." He said he hopes Alaska would not again experience a recession as bad as the one in the mid-1980s, in Anchorage, which he characterized as "pretty terrible" and "like the Grapes of Wrath." He said that he didn't know if [HB 142] was enough, but he thinks it's worth a try, as it may cause a "softer landing" and help not only individuals but businesses as well. He pointed out that while individuals can leave to find work, businesses will close and, as a result, will be gone. He said that there were a lot of businesses in the 1980s that closed because they did not have the customers to stay open. 4:33:40 PM REPRESENTATIVE WOOL added that training through the TVEP program, which is covered under the UI program, was also available. 4:34:16 PM CHAIR KITO announced that HB 142 was held over.