Legislature(2001 - 2002)
04/30/2002 08:05 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
SB 340 - HOLD HARMLESS PROVISIONS OF PFD PROGRAM CHAIR COGHILL announced that the first order of business would be CS FOR SENATE BILL NO. 340(FIN)(efd fld), "An Act relating to public notice of information relating to permanent fund dividends, and to treatment of permanent fund dividends for purposes of determining eligibility for certain benefits." [A proposed House committee substitute (HCS), version P, 22- LS1361\P, Cook, 4/24/02, was adopted as the work draft on 4/27/02.] Number 0102 REPRESENTATIVE FATE commented that this bill has been characterized as mean-tempered, but it's really not. Something needs to be done about the spending in the state of Alaska. This was just a method to try to find a solution by placing some of the responsibility on the people that sometimes need the most help and by trying to spread the burden of those who predominantly need that help. He stated that he doesn't think it is mean spirited; it is simply something that signals the fact that expenses in the state need to be looked at [to see] how they can be absorbed. This may not be the mechanism, but the Finance Committee will scrutinize it. Number 0230 REPRESENTATIVE FATE moved to report [HCS CSSB 340, version 22- LS1361\P, Cook, 4/14/02] out of committee with individual recommendations and the accompanying fiscal notes. Number 0262 REPRESENTATIVE HAYES objected. He said that this bill takes away the whole spirit of the permanent fund. Unless he is mistaken, he said he thought the whole point of the permanent fund was to make sure everybody was on equal footing. Now people will be told that the system has been changed for welfare reform, that they're getting a hand up, and then they're told that they're not worthy of something that everybody gets, including the millionaire and everyone else. He said he thought that was problematic. REPRESENTATIVE HAYES referred to comments that this bill should just go to the Finance Committee to be scrutinized. He said that he understood that the purview of the House State Affairs Standing Committee is to look at statewide policy issues. If it is a policy issue that the committee doesn't think should be made at this time, it should be dealt with right here. He said he thought this is a bad statement. REPRESENTATIVE HAYES told the members that he came from a poor family who had been on welfare, and he couldn't imagine them driving to Alaska from Baltimore to get [a permanent fund] check. He doesn't know of any poor people who could have done that. Some of the premises of people coming up here to receive this check is not very true. It might happen in some cases, but he doesn't think there are a lot of folks moving up because of a permanent fund check. A good job has been done on welfare reform: giving people a hand up not a handout. He expressed discomfort with this legislation and will vote against it. Number 0460 REPRESENTATIVE JAMES said she will allow this bill to move, but this issue is problematic from the general public's concern. She stated that there are those who have come to Alaska specifically because of the benefits. The permanent fund dividend is a draw to the state. She isn't saying that is good or bad. She indicated that people should come to Alaska and bring their money to invest in the state and create jobs so the state won't funnel itself into some kind of a pit. Number 0565 REPRESENTATIVE JAMES admitted that she likes her permanent fund dividend; most everybody does. But something has to be done about it; the state cannot go forward with the size and calculation of the permanent fund today. Any leftover money of the earnings reserve cannot be used until the way the dividend is calculated is changed. It's based on the percentage of the income or half of the earnings reserve, which ever is smaller. She stated that there needs to be a rational way of doing the permanent fund dividend. This issue is not going to go away. If it isn't taken care of here, it's going to come back up again. She would rather deal with the permanent fund first in the fiscal issue; that is what has caused this issue. She emphasized that the state cannot tax itself enough. Another part of the issue is that the 18 to 44 year olds are leaving the state. Number 0793 REPRESENTATIVE JAMES said once people get that money, it is difficult to take it away. People gear up to get that money. She said she sees people who have Christmas presents that she can't afford to buy. Because of the permanent fund, there are people who wouldn't have the money to buy those things for Christmas. She said she doesn't wish they didn't have Christmas presents, but she wishes that they would be able to pay their bills, pay other things, take better care of themselves, and eat better. She reiterated that a rational solution needs to be found or the state will never solve the fiscal issue. Number 0880 REPRESENTATIVE CRAWFORD said he remembers when the debate first started on whether the permanent fund dividend would be means tested. It was decided that every man, woman, and child who was an Alaskan would get a permanent fund dividend. It gives everybody a leg up whether they're rich or poor. He takes exception to a lot of the things that have been said about how poor people are going to Hawaii or getting Christmas presents that they shouldn't. It irritates him when he hears about "those people." He said he is sure that there are always exceptions. There are people who don't use their permanent fund dividend wisely, but [the permanent fund dividend] has given lots of people chances that they would have never had otherwise. He expressed opposition to this bill and said it shouldn't go any further than right here. Number 0970 REPRESENTATIVE JAMES said Alaskans getting this huge dividend causes a mentality of not earning their own way. When K-12 education, the university, and getting permits in the Department of Natural Resources (DNR), and things that grow the state can't be funded, then this is the wrong politics. Number 1020 REPRESENTATIVE HAYES said he understood what Representative James is saying, but this bill would take $11 out of everyone's permanent fund check to have 7,000 parents and 10,000 children not receive this check. He said that $11 is a miniscule amount of money to afflict that type of damage to the poorest of the population. Even though it was said that K-12, the university, and DNR can't be funded, a bill in the House was just passed that is going to give away $41 million a year that could do those things. Number 1088 REPRESENTATIVE WILSON agreed that some decisions have to be made in this state. The fiscal mess needs to be dealt with. However, this bill affects 66 people in her district, and she said she is concerned about that. She indicated that she will probably vote "no recommendation." Number 1243 CHAIR COGHILL said this does not affect the permanent fund dividend in any way. The people on temporary assistance and food stamps still get the permanent fund dividend, it's just that it's counted as income. Everybody has to count it as income. This takes care of the safety net issue for those on SSI [Supplemental Security Income] and APA [Adult Public Assistance]. It does not disqualify people from the Alaska Temporary Assistance Program, except for the months when they have income. That would be true if they got a job. He recognized that these are hard times. He said he thinks that counting the permanent fund dividend as income is appropriate, except for "in the true safety net issues." Number 1350 A roll call vote was taken. Representatives Fate, James, and Coghill voted in favor of moving the bill. Representatives Crawford, Hayes, Stevens, and Wilson voted against it. Therefore, HCS CSSB 340(STA) failed to move out of the House State Affairs Standing Committee by a vote of 3-4. [Representative Wilson later reconsidered her vote.]
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