Legislature(2001 - 2002)
04/17/2002 09:23 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE JOINT RESOLUTION NO. 43(STA) Requesting the United States Congress to grant a two-year moratorium on requirements for certain state payments under federal programs. This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Kelly complimented Co-Chair Donley for his effort and the forethought on this "the maintenance of efforts resolution." AT EASE 9:28 AM / 9:29 AM Co-Chair Donley moved to adopt CS SJR #43, 22-LS1632\F as a working draft, and explained that this proposed committee substitute inserts the language "maintenance of effort" into the title of the bill for clarification purposes. Without objection, the committee substitute was ADOPTED as a working draft. Co-Chair Donley explained to the Committee this resolution "asks the federal government to consider a one or two year moratorium on maintenance efforts requirements so that states can adjust their spending consistent with current needs and budgetary restraints." Co-Chair Kelly noted that Co-Chair Donley recently presented this intent language to an Alaska United States Congressman and received favorable response. He furthered that this intent language has never been formally presented at the federal level and would probably begin debate, as this language would allow "states to establish a new level of maintenance of efforts" so that they "are not constantly held" to historical levels of efforts. He continued this would, in effect, request a moratorium on the maintenance of effort requirement provisions. Senator Olson inquired how Senator Donley determined the two-year time frame presented in this legislation. Co-Chair Donley replied that 43 states currently have budget shortfalls. He voiced understanding of the federal government's use of maintenance of efforts requirements; however the problem is once the maintenance of efforts requirements are established, they are permanent. He reasoned that this language would provide the states "a window of opportunity to readjust their budgets" while keeping the federal maintenance of efforts program intact. He noted, "the key to the feds is that you're not taking federal funds and replacing them with State funds, as they want you to keep moving toward whatever program they want and that is reasonable." He contended it would also "be reasonable to allow the states the freedom to adjust once in a while" based on a multitude of factors. JIM NORDLUND, Director, Division of Public Assistance, Department of Health and Social Services, commented that Co-Chair Donley was "probably motivated" to present this bill because of the Temporary Assistance for Needy Families (TANF) program that has the largest maintenance of efforts program, in addition to other block grants such as the Maternal/Child Health Block grant. He stated the maintenance effort in effect for the TANF program under the original program was fifty percent State funded and fifty percent federally funded; however, when the program transitioned to a block grant, discussions ensued as to what the states' proper role in financing the Temporary Assistance to Needy Families (TANF) program should be. He noted there was concern that states "would de-fund the program and create what is known as "a Race to the Bottom, to be the state to have the lowest welfare benefits, and therefore save state funding in that fashion." In response to this concern, Mr. Nordlund continued, Congress established the maintenance of effort regulations mandating states to be responsible for 80 percent of the block grant funding levels that were in effect in 1994; therefore, he clarified, 1994 is the year that maintenance efforts levels are based. Mr. Nordlund stated "there is some flexibility under the TANF program that allows the Legislature to realize general funds savings by using federal TANF dollars to supplant primarily child care dollars, general funded childcare dollars," in addition to welfare reform savings. He maintained the Division supports Congress keeping the maintenance of efforts in place, and no one at the federal level is considering "getting rid of the maintenance of efforts." Co-Chair Kelly asserted, "no one is talking about revising the maintenance of efforts," and as mentioned, the reaction by Alaska's Congressman was encouraging. Co-Chair Kelly stated Co-Chair Donley developed the idea of re- adjusting it, which was, when first presented, met with opposition. Co-Chair Kelly stated the idea has grown, and has prompted this resolution. Co-Chair Kelly stated the discussion on the maintenance of efforts would continue to grow in the next few years. Co-Chair Donley asserted, "if ever there was a gap in the philosophy between the Knowles' Administration and fiscal discipline, boy, it just emerged." He continued that the Administration would rather "rely on the federal government to dictate spending levels" than allow state governments the option to make their own decisions on their individual budgets, especially in light of the current state of Alaska's economy. Co-Chair Donley moved to report "Senate Joint Resolution 43, the committee substitute, from Committee with individual recommendations." There being no objections, CS SJR 43(FIN) was REPORTED from Committee with a previous zero fiscal note for all departments, dated 4/03/02, from the Senate State Affairs Committee. AT EASE 9:40 AM / 9:43 AM
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