Legislature(2001 - 2002)

03/01/2002 09:13 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     SENATE BILL NO. 182                                                                                                        
     "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."                                                            
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
PAM KARALUNAS,  Arctic Alliance for People, and The  Resource Center                                                            
for  Parents  and  Children,   testified  via  teleconference   from                                                            
Fairbanks and stated this  bill "is one of the least effective ways"                                                            
to balance the  budget because "it punishes people  who are poor and                                                            
disabled."  She   asked  the  Committee  to  consider   how  program                                                            
recipients would pay expenses if payments were reduced.                                                                         
                                                                                                                                
Co-Chair  Kelly  clarified  this  bill  is  not  an  elimination  of                                                            
benefits, but a pro ration of funds if deemed necessary.                                                                        
                                                                                                                                
LYNNE KORAL, Alaska Independent  Blind, testified via teleconference                                                            
from Anchorage  that decreases in benefits to the  poor would reduce                                                            
monies to buy  groceries and pay rent. She stressed  this would have                                                            
a negative effect on those  who could least afford it. She applauded                                                            
the Legislature's  efforts  to balance the  budget, but stated  this                                                            
bill would not have the intended affect.                                                                                        
                                                                                                                                
TABER REHBAUM,  member, Arctic  Alliance for  People, testified  via                                                            
teleconference   from   Fairbanks   that  Artic   Alliance   remains                                                            
"unequivocally  opposed" to this bill.  She stated this legislation                                                             
would place  the burden of  balancing the  budget onto the  backs of                                                            
the  "most  venerable  Alaskans:  the  poor,  the  elderly  and  the                                                            
disabled,"   and  might   force  more  Alaskans   to  seek   welfare                                                            
assistance.  She  asked  the  Committee  to seek  ways  to  increase                                                            
revenue.                                                                                                                        
                                                                                                                                
LAEL VENTA,  President, People First,  testified via teleconference                                                             
from Anchorage to concur  with prior testifiers that this bill would                                                            
cause "a hardship  on people who are  already living at the  poverty                                                            
level."                                                                                                                         
                                                                                                                                
JEANNETTE GRASTO,  Board of Directors  of the National Alliance  for                                                            
the Mentally  Ill (NAMI)  Fairbanks, NAMI  Alaska and Family  Center                                                            
Services  of Alaska,  testified  via teleconference  from  Fairbanks                                                            
stating she  "vehemently opposes this  bill." She asserted  that "no                                                            
one  chooses  to  have a  disability  or  to  have  a child  with  a                                                            
disability, and  it can be a devastating experience."  She urged the                                                            
Committee to consider the negative effects this bill would have.                                                                
                                                                                                                                
CATHERINE   BURGESS,   employee,    Parents   Inc.   testified   via                                                            
teleconference from Anchorage to "strongly oppose" this bill.                                                                   
                                                                                                                                
COLLEEN AKPIK-LEMAN,  Social Services Director, Barrow  Arctic Slope                                                            
Native  Association,  testified via  teleconference  from Barrow  in                                                            
opposition  to  this legislation,   as it  would  negatively  affect                                                            
benefits to people who  live in the North Slope region, an area with                                                            
a high cost of living.                                                                                                          
                                                                                                                                
Co-Chair Kelly  reiterated this bill  "is not a blanket reduction,"                                                             
but rather would allow  the Legislature to address short-funding "on                                                            
a case by case basis."                                                                                                          
                                                                                                                                
ALISON ELGEE,  Deputy Commissioner,  Department  of Administration,                                                             
testified that the Department  of Administration has determined this                                                            
bill  would  affect its  Longevity  Bonus  program  recipients.  She                                                            
stated  it  would  subject  these  individuals   "to  a  feeling  of                                                            
uncertainty" that  would be further complicated when  the Department                                                            
tried  to project  if  and when  benefits  might be  pro-rated.  She                                                            
informed the Committee  the expenses of this program  have been very                                                            
difficult  to project, even  though the program  has its  recipients                                                            
identified.                                                                                                                     
                                                                                                                                
Ms. Elgee detailed  that the Department's projection  formula for "a                                                            
high case, mid-case and  low-case" model of needs from which a full-                                                            
funding-needs   budget   recommendation    is   presented   to   the                                                            
Legislature.  She stressed that over  the course of the year,  these                                                            
projections are  recalculated, "and it is frequently  the case" that                                                            
in September,  "it appears the program  will be short-funded  due to                                                            
participants'  travel  patterns" and  other factors.  She  continued                                                            
that the program  numbers are recalculated  again in March,  and the                                                            
program  has "plenty  of money."  She stated  the way  this bill  is                                                            
written,  according to  the September  numbers,  the payments  would                                                            
have to be pro-rated, "where  in fact," there is adequate money when                                                            
the numbers are re-run in March.                                                                                                
                                                                                                                                
ELMER  LINDSTROM,  Deputy Commissioner,   Department  of Health  and                                                            
Social  Services, stated  this bill  appears to  affect a number  of                                                            
programs in the  Department of Health and Social Services  including                                                            
the Alaska  Temporary  Assistance  Program for  Families (ATAF)  and                                                            
children.  He  stated  pro-rating  this  program   would  jeopardize                                                            
federal  Block Grant funding  that is  a crucial  part of the  total                                                            
program's funding.                                                                                                              
                                                                                                                                
Co-Chair  Donley stated a  change in federal  law might address  the                                                            
requirements for state funding.                                                                                                 
                                                                                                                                
Mr. Lindstrom  stated that is possible,  although the Department  is                                                            
not  aware of  any  pertinent  legislation  pending at  the  federal                                                            
level.                                                                                                                          
                                                                                                                                
Mr. Lindstrom informed  this bill would also affect the Adult Public                                                            
Assistance (APA) Program for "the aged, blind, and disabled."                                                                   
                                                                                                                                
                                                                                                                                
SFC 02 # 23, Side B 10:15 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Mr. Lindstrom  profiled the approximately  14,000 APA recipients  as                                                            
follows:  approximately  33 percent  suffer from  mental  disorders;                                                            
approximately   15   percent   have   developmental   disabilities;                                                             
approximately  11 percent  have muscular/skeletal  system  problems;                                                            
and  approximately  four percent  participate  in the  program as  a                                                            
result  of  injury.  He stated  that  APA  benefits,  combined  with                                                            
Supplemental  Security Income  benefits, do  not allow these  people                                                            
"to live extravagantly,"  and in fact, often do not "even cover room                                                            
and board."  He stated that after  paying rent, food, utilities  and                                                            
basic  living  needs,  the  discretionary  income  remaining  for  a                                                            
typical APA recipient is approximately $125.                                                                                    
                                                                                                                                
Mr.  Lindstrom commented  this  legislation  would  also affect  the                                                            
Department's  General  Relief Assistance  Program.  He informed  the                                                            
Committee that  approximately 75 percent  of this program's  funding                                                            
pays  for   indigent  burials  with   the  balance  providing   some                                                            
assistance  to persons  who are  not eligible  for other  assistance                                                            
programs;  "typically  for  rent costs  to  keep people  from  being                                                            
evicted" from their homes.                                                                                                      
                                                                                                                                
Mr.  Lindstrom  informed  the  Committee  the  Foster  Care  Payment                                                            
Program might also be affected  by this bill. He stated this program                                                            
is the  key to the  child protection  system and  the retention  and                                                            
recruiting  of foster  parents. He  stated the  Department's  fiscal                                                            
notes  explain  the  scenario  for each  program  depending  on  the                                                            
funding reduction percentage.                                                                                                   
                                                                                                                                
Senator  Green  asked  if the  recipients  for  these  programs  are                                                            
identified by the state, the federal government, or both?                                                                       
                                                                                                                                
Mr. Lindstrom responded  the primarily federally funded ATAF program                                                            
has both federal  and state requirements;  whereas, the APA  program                                                            
is  a state  regulated  program.  He stated  the  Legislature  could                                                            
address  "eligibility and  needs standards"  changes  to both  these                                                            
programs through statute.                                                                                                       
                                                                                                                                
Senator  Green asked  if the state  has requested  waivers from  the                                                            
federal government  for programs "that  are very costly"  and "could                                                            
restrict covering a wider  base of people." She also inquired if the                                                            
Department   had  addressed   with  the   Legislature,  "moderating                                                             
programs"  that  are expensive  to  operate  or have  "expanded  too                                                            
wide."                                                                                                                          
                                                                                                                                
Ms. Elgee responded  that the Legislature  is currently considering                                                             
HB 162 that  could reduce the cost  of the Longevity Bonus  Program.                                                            
                                                                                                                                
Co-Chair Donley  stated that 27 states  do not have an APA  program,                                                            
and asked if the Department has any information on those states.                                                                
                                                                                                                                
Mr.  Lindstrom  responded  that the  APA  program  is the  State  of                                                            
Alaska's supplement to  the federal Supplemental Security Income. He                                                            
noted that while  not all states provide supplements,  of those that                                                            
do, there  is a "broad range"  of payments  based on a multitude  of                                                            
circumstances such as assisted living or independent living.                                                                    
                                                                                                                                
Co-Chair  Donley   communicated  that  22  states   do  not  provide                                                            
supplemental  coverage for individuals  who live independently,  and                                                            
Alaska pays approximately  three times the average supplement of the                                                            
states  that do. He  continued that  27 states  have no program  for                                                            
individuals living  in another household, and Alaska,  in this case,                                                            
pays approximately three  times the average of those states that do.                                                            
                                                                                                                                
Mr.  Lindstrom  thanked  Co-Chair  Donley for  the  information  and                                                            
reiterated that  an individual living alone in Alaska,  after paying                                                            
for basic  living  needs, would  have approximately  $100  remaining                                                            
income.                                                                                                                         
                                                                                                                                
Co-Chair Donley  commented that this would not be  their sole source                                                            
of income as they receive a Permanent Fund Dividend.                                                                            
                                                                                                                                
Mr. Lindstrom suggested  having these individuals testify before the                                                            
Committee about what it is like to live on public assistance.                                                                   
                                                                                                                                
PAUL   GROSSI,  Director,   Division   of   Worker's  Compensation,                                                             
Department  of  Labor   and  Workforce  Development,   informed  the                                                            
Committee  about the  impact this  bill might have  on two  programs                                                            
administered  by the Department:  the Fisherman's  Fund, which  pays                                                            
for  emergency  medical benefits  to  fisherman  who have  no  other                                                            
coverage  for work  related injuries  or illnesses;  and the  Second                                                            
Injury  Fund  which  pays benefits  to  employers  for  payments  of                                                            
benefits for  certain types of "long-term  second degree  injuries."                                                            
He stated, "these  are constitutionally dedicated  funds" that might                                                            
have  to  be   reduced  under  HB   182  if  there  is  not   enough                                                            
appropriations in a given year.                                                                                                 
                                                                                                                                
Senator  Green  asked  how  short  funding   of  these  programs  is                                                            
currently handled.                                                                                                              
                                                                                                                                
Mr. Grossi stated the Department requests supplemental funding.                                                                 
                                                                                                                                
Co-Chair Donley  mentioned he has not noticed dedicated  funding for                                                            
these programs in prior legislation.                                                                                            
                                                                                                                                
Mr. Grossi  noted the omission might  have been an oversight  by the                                                            
Department.                                                                                                                     
                                                                                                                                
MARIE  DARLIN,  representing  the American  Association  of  Retired                                                            
Persons, referenced  a letter submitted by the Association,  stating                                                            
its opposition to this  bill. She mentioned that if benefits are cut                                                            
to seniors,  many of them  could not remain  in their own home,  and                                                            
the  state would  subsequently  pay  for them  to live  in  assisted                                                            
living facilities.                                                                                                              
                                                                                                                                
LIN CRAIG, member, Key  Coalition for the Blind, voiced concern that                                                            
this bill would  affect people living at or below  poverty level. He                                                            
stated  this bill could  ultimately  result in higher  costs  to the                                                            
state if people have to move into assisted living facilities.                                                                   
                                                                                                                                
PHYLLIS  HART, member, Parents,  Inc. testified  via teleconference                                                             
from Anchorage  that she is familiar with services  the State offers                                                            
to families  as  she has  an autistic  grandchild  and a  grandchild                                                            
adopted through  the state foster program. She voiced  opposition to                                                            
the bill and stated, "there  are more effective ways to come up with                                                            
funding for these programs."                                                                                                    
                                                                                                                                
ALFRED MCKINLEY  SR, Executive Committee  Member, Grand Camp  Alaska                                                            
Native Brotherhood,  and Delegate  to Central Council, testified  in                                                            
opposition  to SB 182 and the reductions  it may present.  He voiced                                                            
this  bill  would  be  detrimental  to  people  and  to  the  state,                                                            
explaining  if  people  housed  in state-assisted   living  programs                                                            
receive  reduced cash  benefits,  their rent  payment  to the  state                                                            
"will go down  too." He requested  the Committee recognize  the high                                                            
cost of living  in Alaska, and that the cost of living  in Anchorage                                                            
and Juneau is lower than in rural communities.                                                                                  
                                                                                                                                
FRANK  C WHITE  SR, Alaska  Native  Brotherhood,  Camp #2  testified                                                            
there are  many handicapped  people, such as  himself, who  would be                                                            
affected by any  decrease in assistance, as many are  at or near the                                                            
poverty  level already.  He  stated he  worked  all his  life to  be                                                            
independent,  and that he still lives  independently, but  is afraid                                                            
this  bill might  force him,  a handicapped,  retired  veteran,  and                                                            
people like him, to move  out of their homes. He urged the Committee                                                            
to leave programs at current funding levels.                                                                                    
                                                                                                                                
AT EASE 10:51 AM / 10:52 AM                                                                                                     
                                                                                                                                
Co-Chair  Donley   stated  the  committee  substitute   for  SB  182                                                            
clarifies how  the pro ration would  function: the Executive  Branch                                                            
would have  the discretion to reduce  payments, if necessary,  based                                                            
on  the  budget,  or  to  plan  for  subsequent  appropriations   as                                                            
specified  in Section 1,  subsection (1) of  the bill. He  continued                                                            
that  Section  1,  subsection   (2),  mandates  pro  ration  if  the                                                            
Legislature "specifically  instructs the Executive Branch to do so."                                                            
                                                                                                                                
Co-Chair Donley made a  motion to adopt SB 182 (FIN), 22-LS0675\J as                                                            
a working draft.                                                                                                                
                                                                                                                                
There were no objections,  and the committee substitute was ADOPTED.                                                            
                                                                                                                                
Co-Chair  Donley  clarified  that,  contrary   to  public  testimony                                                            
comments,  SB 182  does  not reduce  payments:  "it  provides for  a                                                            
budgeting   mechanism  whereby  payments   could  be  reduced"   and                                                            
"payments  would only be  reduced if they  were short-funded  in the                                                            
actual budgeting document."                                                                                                     
                                                                                                                                
Co-Chair  Kelly stated  it  also does  not preclude  a supplemental                                                             
request.                                                                                                                        
                                                                                                                                
The bill was HELD in Committee.                                                                                                 

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