Legislature(2001 - 2002)
02/13/2002 01:37 PM Senate HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MS. SANDY HOBACK, an independent consultant under contract with the American Institute for Full Employment, informed committee members that the Institute is a non-profit research and education institute whose mission is to promote full employment and universal access to jobs with career potential for all who can work, especially those receiving public assistance as a substitute for opportunities and rewards for paid work. The Institute offers to assess state welfare reform efforts. In that vain, she visited Alaska last spring and made that offer to Chairwoman Green and Chairman Dyson. They requested the Institute do an assessment, which was completed last October. MS. HOBACK said she would talk specifically about the legislative recommendations made in that report. She pointed out the Division of Public Assistance has contracted with her independently to operationalize many of the other recommendations. She listed the five recommendations as: Recommendation 1 · Amend the statute to allow Alaska to use full flexibility allowed under federal law to extend benefits to some long- term recipients. MS. HOBACK said the legislature discussed this issue last session but the committee felt further analysis was necessary before making that statutory change. She recommends that change be made and allowing the Division of Public Assistance to craft narrow criteria by which to determine whether a family can extend beyond the 5-year time limit. She noted a family might reach the 5-year time limit yet have several justifiable reasons for an extension. She maintained that using criteria instead of an artificial cap level is a better way to go. Recommendation 2 · Move toward a progressive sanction system for uncooperative clients. MS. HOBACK explained that Alaska currently imposes a cash grant reduction to the family of about 40 percent for the first time it does not cooperate with immediate restoration upon cooperation; a mandatory six month penalty for a second offense; and a 12 month penalty for a third offense. She noted that system is a great disincentive to cooperation because even if the adult decides to start cooperating, he or she might still have a 6 or 12-month penalty. Also, while disqualified, the family's time clock continues to tick. She suggested using a system that progresses through a number of stages but can ultimately close a cash grant if people continue to be uncooperative. Such a system is more family-friendly for two reasons: it can be cured immediately upon cooperation and the time clock stops when the grant is closed. She noted that adding appropriate safeguards for the well-being of the children will create a better check and balance system than using the artificial cap with the existing sanction policy. Recommendation 3 · Create an approach whereby full-time working clients, under a certain income level, continue to be eligible for some ATAP benefits even though they have reached the five-year limit. MS. HOBACK stated that is addressed in the legislation [SB 293] under a self-sufficiency services provision. It would allow the state to continue to serve working clients and provide them with appropriate support to stay on the job. Recommendation 4 · Strengthen Alaska's upfront diversion program. MS. HOBACK explained that an upfront diversion program is a mechanism whereby the client is found employment so that he or she does not have to come on the assistance program. The current statute allows two months of benefits to be paid to the individual upfront, instead of opening a cash grant. The Institute recommends that be increased to three months of benefits because two months is often not enough given the cost of living in Alaska. She pointed out that recommendation dovetails with other management recommendations she has made to the division to strengthen the entire upfront approach so that diversion becomes a much more viable option. Recommendation 5 · Allow for a more complete wage subsidy program. The State of Oregon developed a program that engages the private sector to provide training opportunities. In most states, the largest employer is the private sector so finding ways to include it is critically important. The legislation [SB 293] asks for authorization to take the value of the food stamp benefits. The state already has the ability to take the value of the cash benefit and turn it into a wage subsidy. This asks for state permission to approach the federal food stamp program to do the same thing with the food stamp benefit, couple those benefits together and use them to reimburse private sector employers for providing training opportunities for this clientele. The state of Oregon found that approach was not only a very good avenue to get clients with significant barriers to work, it also worked as an economic stimulus because many small employers would not have had the capital to expand. CHAIRWOMAN GREEN asked if these changes are synchronized with what the federal government may do. MS. HOBACK said that Congress is just beginning to discuss reauthorization so it is too early to tell. However, she believes the changes in SB 293 will conform very well to what she has heard discussed so far. CHAIRWOMAN GREEN asked if the wage subsidy is designed for use by the private sector only. MS. HOBACK said that is how it was designed in the state of Oregon but the bill only authorizes the division to use the value of the food stamps for a wage subsidy program. It does not speak to the private or public sector. CHAIRWOMAN GREEN announced that SB 293 would be before the committee next Wednesday. MR. JIM NORDLUND, Director of the Division of Public Assistance, said he will comment on the bill next week. He added that he has had a good working relationship with Ms. Hoback. The division had been considering some of the recommended changes for awhile. The division has reservations about some of the provisions in the bill but, overall it presents a good start. SENATOR DAVIS thanked Chairwoman Green for contracting with the Institute for the report. There being no further business to come before the committee, CHAIRWOMAN GREEN adjourned the meeting.