Legislature(2001 - 2002)

02/13/2002 01:37 PM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                                                                
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                                                                  
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.                                                                                         

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