Legislature(2001 - 2002)

02/25/2002 01:36 PM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
CHAIRWOMAN  LYDA  GREEN  called the  Senate  Health,  Education  &                                                            
Social Services Committee  meeting to order at  1:36 p.m. Senators                                                              
Wilken,  Ward, Davis  and Green  were present.   Chairwoman  Green                                                              
announced the committee  would hear SB 293, which  is a revisit of                                                              
the welfare  reform issue that  the legislature began  about seven                                                              
years ago.  She  noted that it is time to update  that legislation                                                              
and,  as  in  1995,  the  legislature  is  ahead  of  the  federal                                                              
government  as   it  reauthorizes  the  federal   program  so  the                                                              
legislature has to  be mindful of doing everything  in the correct                                                              
order.  She asked Mr. Burnett to present the legislation.                                                                       
           SB 293-ALASKA TEMPORARY ASSISTANCE PROGRAM                                                                       
MR. JERRY BURNETT,  staff to Senator Green, explained  that SB 293                                                              
is the result of a joint effort between  the House and Senate HESS                                                              
Committees.  Both  committees  contracted  last session  with  the                                                              
American  Institute for  Full Employment  to look  at the  welfare                                                              
reform  program  in  Alaska.    SB   293  institutes  all  of  the                                                              
legislative  recommendations  in  the  Institute's  report,  which                                                              
   · Increasing diversion payments from 2 to 3 months to allow                                                                  
     people sufficient funds to avoid being on the program;                                                                     
   · Changing the definition of "assistance" to "cash assistance"                                                               
     and "self-sufficiency services";                                                                                           
   · Allowing the value of food stamps to be used for wage                                                                      
     subsidy programs;                                                                                                          
   · Instituting a new progressive sanction policy for people who                                                               
     fail to follow the rules;                                                                                                  
   · Repealing the 20 percent cap on exemptions to the 60-month                                                                 
     limit for cash benefits.                                                                                                   
MR.  BURNETT  informed  members   that  representatives  from  the                                                              
Department of Health  and Social Services (DHSS)  and Sandy Hoback                                                              
from the American Institute for Full  Employment were available to                                                              
provide details and answer questions.                                                                                           
MS.  ANGELA  SALERNO,  legislative  liaison for  the  Division  of                                                              
Public  Assistance  (DPA),  DHSS,  stated  the bulk  of  the  bill                                                              
clarifies  the  distinction  between  cash  assistance  and  self-                                                              
sufficiency  services in  an effort  to provide  work support  for                                                              
clients who  are about  to go off  of the  program.  That  support                                                              
will consist of  things like transportation or  clothing to ensure                                                              
that clients can  easily make the transition  to self-sufficiency.                                                              
DPA believes that  with extra support clients will  be more likely                                                              
to  retain the  progress they  have made  and no  longer need  the                                                              
program.   DPA wants to be  able to convert food  stamp allotments                                                              
to wage subsidies.  Right now, DHSS  is allowed to turn a family's                                                              
cash benefit  into a wage  subsidy and  provide the subsidy  to an                                                              
employer who is willing to hire the  individual. The change in the                                                              
bill  will provide  a bigger  incentive  to employers  to hire  or                                                              
create new jobs for welfare recipients.                                                                                         
MS.  SALERNO  explained that  DPA  wants  to increase  the  amount                                                              
available for diversion payments.  Right now, DPA can pay a family                                                              
a lump sum benefit  (two months of payments) rather  than have the                                                              
family  register for  welfare payments.  DPA has  found that  many                                                              
clients  have a very  discrete need,  but because  there has  only                                                              
been  one way  to get  assistance, they  sign up  for the  welfare                                                              
program and  get all of  the benefits.   SB 293 will  increase the                                                              
lump sum  diversion payment to  three months of  benefit payments.                                                              
She  noted  that field  workers  have  found  that two  months  of                                                              
payments are  not enough to meet  people's needs.  DPA  hopes that                                                              
with a  three-month payment,  more people will  never come  on the                                                              
program but be diverted up front.                                                                                               
MS. SALERNO informed members that  the federal law requires states                                                              
to  penalize clients  who do  not  comply with  program rules.  In                                                              
Alaska's  statute, a  family  can lose  up  to 40  percent of  its                                                              
benefit  for a  first non-compliance  offense but  the penalty  is                                                              
removed immediately with compliance.  However, that penalty is not                                                              
removed for  six months for  a second offense  or 12 months  for a                                                              
third offense.  That system provides  no incentive to comply.  She                                                              
explained that  SB 293  changes the  progressive sanction  plan so                                                              
that a person who is out of compliance  a second time will lose 75                                                              
percent  of his  or her  cash grant  and 100  percent after  eight                                                              
months  of  non-compliance.  She maintained  that  safeguards  are                                                              
built into the  progressive sanction plan because  the clients who                                                              
are penalized  are often those  with the most difficult  barriers.                                                              
For example, some  clients have literacy problems  and cannot read                                                              
notices,  or some  clients  have mental  health  problems. SB  293                                                              
requires  DPA  to do  some  good  casework  and  check up  on  the                                                              
families before benefits are reduced by 75 or 100 percent.                                                                      
MS. SALERNO said  the final change in SB 293 is  the repeal of the                                                              
20 percent cap on exemptions to the 60-month limit.                                                                             
SENATOR  DAVIS asked,  regarding the  progressive sanctions,  what                                                              
other safeguards are contained in SB 293 for children.                                                                          
MS. SALERNO  said that DPA must attempt  to do a home  visit and a                                                              
full  review  of the  case  before  benefits  are  cut 75  or  100                                                              
percent. If the caseworker finds  no extenuating circumstances for                                                              
non-compliance,  DPA has  the option to  manage that  individual's                                                              
benefits. DHSS can make vendor payments  for rent and utilities so                                                              
that there will  never be a time when a child will  have to be put                                                              
in foster  care because the health  and safety of the  children is                                                              
CHAIRWOMAN GREEN asked for an example of non-compliance.                                                                        
MS.  SALERNO  said  a client  who  does  not  show  up for  a  job                                                              
interview  without good  cause would  be considered  to be  out of                                                              
CHAIRWOMAN  GREEN  asked  if  that   might  apply  to  refusal  to                                                              
participate   in  treatment,   rehabilitation   or  other   health                                                              
MS.  ELLIE FITZJARRALD,  Director  of Policy,  Division of  Public                                                              
Assistance, said a number of activities  fall under the purview of                                                              
the   family    self-sufficiency   activities    or   work-related                                                              
activities.  Some relate  to  working  at a  job  for a  specified                                                              
number of  hours per week,  or a client  might have  been screened                                                              
for  a  substance   abuse  problem  and  is  required   to  attend                                                              
treatment.   She  said those  activities relate  to anything  that                                                              
will  contribute   to   a  client's  skill   building  or   actual                                                              
participation  in  work activities  that  are connected  to  self-                                                              
sufficiency.   She pointed out  that the protections  contained in                                                              
SB 293 are aimed at ensuring that DHSS has done its job.                                                                        
MS. SALERNO repeated the final provision  in SB 293 repeals the 20                                                              
percent cap  on exemptions. A number  of clients will not  be able                                                              
to get off of  the program for a variety of reasons.   The current                                                              
law contains a 20  percent cap on the number of  people who can be                                                              
granted an  extension.  SB 293 would  lift the 20 percent  cap and                                                              
replace it with  strict criteria that a family  or individual will                                                              
have to meet  to be eligible for  the exemption.  DPA  believes it                                                              
is dangerous  and unfair to deny  people the assistance  they need                                                              
if they  fit the criteria.  This provision  is the most  important                                                              
part of the bill to DHSS.                                                                                                       
SENATOR  WILKEN  asked  why  the  word  "arbitrary"  was  used  to                                                              
describe the 20 percent cap.                                                                                                    
MS. SALERNO  said she believes it  was taken from the  federal law                                                              
when it  was being  developed. She  believes it  was a  compromise                                                              
number  that  came about  during  the  political process  and  was                                                              
included  because it  was understood  that some  people could  not                                                              
become self-sufficient within the 5-year time limit.                                                                            
SENATOR WILKEN asked if a bureaucracy  will need to be in place to                                                              
determine who is eligible if the cap is lifted.                                                                                 
MS. SALERNO said that is correct.                                                                                               
SENATOR WILKEN questioned whether  that is reflected in the bill's                                                              
fiscal note.                                                                                                                    
MS.  SALERNO said  it is  not; the  bill  has a  zero fiscal  note                                                              
because  the  program is  funded  with  a  block grant  and  state                                                              
maintenance of effort (MOE) funds.   The cost of administering the                                                              
program will remain  constant regardless of the  number of clients                                                              
served. She explained  that the criteria DPA will  use has already                                                              
been developed (page 2 of Ms. Salerno's handout).                                                                               
CHAIRWOMAN  GREEN asked  if the criteria  are  referred to  in the                                                              
MS. SALERNO said they are.                                                                                                      
CHAIRWOMAN  GREEN  said, to  her  recollection,  the criteria  was                                                              
iterated  from the  exemption provision  of  the original  welfare                                                              
reform legislation.                                                                                                             
MS. SALERNO agreed it is in current law.                                                                                        
SENATOR WILKEN  asked if one out  of five of the  current caseload                                                              
can be excluded from the five year limit under current law.                                                                     
MS. SALERNO said that is correct.                                                                                               
SENATOR WILKEN  asked Ms. Salerno  if she is suggesting  repealing                                                              
the 20 percent  cap with no  replacement so that every  client who                                                              
is approaching his or her fifth year  of benefits would go through                                                              
the review  process to determine  eligibility.  He then  asked who                                                              
will  pay for  the  review since  requiring  reviews  for so  many                                                              
clients will require more bureaucracy.                                                                                          
MS. SALERNO  clarified that DHSS is  already doing a lot  of those                                                              
reviews now because some families  have reached the 60-month limit                                                              
or are coming close to it.  DPA is  using existing staff as review                                                              
panels  so that  work has  been integrated  into the  rest of  the                                                              
caseload and no additional cost will be incurred.                                                                               
SENATOR WILKEN  expressed confusion and said, "What  you're saying                                                              
is that this  1100 here is what  you're dealing with in  current -                                                              
currently these  are the 1100 and  if we lifted the cap,  we would                                                              
be suddenly dealing with 6,000-5,598."  He asked for clarification                                                              
and said that by removing the incentive  to get off of the welfare                                                              
MS. SALERNO  said that characterizing  the change as  "lifting the                                                              
cap" is incorrect.  Nothing will change regarding  caseload as all                                                              
families get reviewed, regardless.  She noted that the information                                                              
on the  handout is a  projection for FY  03. Right now,  DHSS does                                                              
not have 20  percent of welfare clients earmarked  for extensions.                                                              
However, DHSS does  know that some clients have  disabled children                                                              
in the home.   She emphasized  that no one will  automatically get                                                              
an extension. If a client applies  for an extension, DPA will make                                                              
a decision  as to whether  or not that  client meets  the criteria                                                              
for an extension.                                                                                                               
SENATOR WILKEN stated:                                                                                                          
     Understand.   But  if   -  as  I   understand  it,   I'm                                                                   
     approaching  my -  I'm in  my fourth  year -  I'm in  my                                                                   
     fifth year and  approaching the end.  I know  at the end                                                                   
     of the year  I'm going to be off of welfare.   But, if I                                                                   
     have  extenuating circumstances,  I may  be one of  five                                                                   
     that could be released by the  state through this review                                                                   
     to continue  on in some  manner and if  we lift -  if we                                                                   
     repeal the 20  percent cap, then my horizon  is extended                                                                   
     to the  point where,  well, I  may be  able to get  this                                                                   
     because they're going to review  my case and I think I'm                                                                   
     okay but  I'm going to  get them to  say one way  or the                                                                   
     other.  It lifts the finality  and so then I say, of the                                                                   
     5500 in '98,  most of those are probably going  to say I                                                                   
     deserve to be excluded, which increases the workload.                                                                      
MS. SALERNO said they will only receive  an extension if they meet                                                              
the criteria  but none of  it is automatic.   Everyone will  get a                                                              
SENATOR WILKEN  said the  fact that all  5,598 clients will  get a                                                              
review is his point because, as of  today, DPA has reviewed 1,100.                                                              
MS. SALERNO said that is incorrect  because DHSS will review every                                                              
case whether the  cap is repealed or not. That  is division policy                                                              
because  it wants  to make  sure it knows  what is  going on  with                                                              
families before benefits are stopped.                                                                                           
SENATOR WILKEN  again asked  if 80  percent of  the 5,500  will no                                                              
longer receive benefits.                                                                                                        
MS. SALERNO  said DPA  will have  to make  some decisions  as some                                                              
families may have  very similar circumstances when  the 20 percent                                                              
cap is almost reached.                                                                                                          
SENATOR  WILKEN said  he will  pursue  this issue  further in  the                                                              
Senate  Finance  Committee  because  he does  not  understand  why                                                              
repealing  the cap  will  not increase  DPA's  workload if  people                                                              
continue to stay on the program and it becomes cumulative.                                                                      
MS. FITZJARRALD said  that, as part of the federal  welfare reform                                                              
legislation,  states were allowed  to accept  20 percent  of their                                                              
caseload once  that 20 percent  hit the  5-year time limit.   When                                                              
Alaska's welfare  reform law passed, it  was set at 10  percent or                                                              
whatever  amount was  in the federal  law. In  1994, when  welfare                                                              
reform began, over  12,000 families received public  assistance in                                                              
Alaska.  At that time, DPA thought  it had lots of room with which                                                              
to work with  families who, after 5 years, may  need an exception.                                                              
Now  that Alaska's  caseload has  been  reduced to  7,000, the  20                                                              
percent  is  based  on  that  amount.  DPA  knows  that  a  larger                                                              
proportion  of  the families  left  on  assistance now  have  many                                                              
issues  in their lives.  She noted  that the  projected number  of                                                              
families  with allowable  exemptions in  FY 03  will be 1120.  DPA                                                              
calculated that figure  from the number of families  on the Alaska                                                              
Temporary Assistance  Program in  July of  1997 (the beginning  of                                                              
the 5 year limit)  who continue to receive benefits.  DPA is going                                                              
through  the  process  of  determining  whether  they  should  get                                                              
exemptions.   Ms.  Fitzjarrald  said that  DPA  believes the  time                                                              
limit has been a strong motivator  to families on welfare and that                                                              
some families go  off a bit early to reserve  their remaining time                                                              
for the future, if needed.                                                                                                      
MS. FITZJARRALD said that once DPA  gets through the first year of                                                              
clients who have  reached the 5-year limit, it  will find families                                                              
who need to rely on the program over  time. DPA is projecting that                                                              
it will  have a  problem in  FY 04  because it  will not have  the                                                              
authority  to extend  benefits to  those families  who still  need                                                              
help. DPA  will then be  faced with trying  to decide who,  of the                                                              
people that  meet the criteria, should  get the exemption.  SB 293                                                              
attempts to  fix that dilemma  while maintaining the  5-year limit                                                              
as a motivator.  She pointed out  that 20 percent was an arbitrary                                                              
amount set by Congress and was a  huge number when the legislation                                                              
went  into effect,  but it  has diminished  and  DPA is  concerned                                                              
about that.                                                                                                                     
CHAIRWOMAN  GREEN  asked Ms.  Salerno  to  speak to  the  24-month                                                              
provision in  the original legislation  that was designed  to have                                                              
clients working within  two years. She maintained  that the 5-year                                                              
limit was intended to be the lifetime  limit.  She asked about the                                                              
number of  clients who went off  of public assistance at  the two-                                                              
year mark.                                                                                                                      
MS. SALERNO stated that clients were  supposed to be involved in a                                                              
work activity at two years.                                                                                                     
CHAIRWOMAN GREEN said:                                                                                                          
     The  preponderance of  the people that  are included  in                                                                   
     this number  right here didn't even approach  the 5-year                                                                   
     time limit.  That's what  I'm trying to  say and  so the                                                                   
     standard  that required  them  to be  off  is not  being                                                                   
     changed, is  it?  For someone  new coming on  they still                                                                   
     have the  2-year restriction  on their  - the length  of                                                                   
     time in  which they're  supposed to  be off. The  5-year                                                                   
     was  the   worst-case  scenario  for  a  person   for  a                                                                   
     lifetime.  The exemptions  were those  cases that -  for                                                                   
     some -  an extenuating circumstance  for a short  period                                                                   
     of  time for  some probably  a chronic  case, but  after                                                                   
     that person reaches  the 5-year time limit  and they are                                                                   
     extended  - the  exemption,  for instance,  when is  the                                                                   
     next review of their case?                                                                                                 
MS. SALERNO said  that varies.  DPA has granted  extensions for as                                                              
short as 2 months.                                                                                                              
SENATOR WILKEN asked  if an appeal process exists  for clients who                                                              
are denied an extension from the 5-year limit.                                                                                  
MS. SALERNO said yes.                                                                                                           
SENATOR WARD asked if all other states have a 20 percent cap.                                                                   
MS. FITZJARRALD said that not all  states have a 20 percent cap in                                                              
their state  laws.  All states are  held to the 20 percent  cap by                                                              
federal law,  but the states  that do  not have that  provision in                                                              
state law  have been  very creative in  setting up separate  state                                                              
programs. They use  all state money (no federal  funds) to provide                                                              
assistance  to families  who  have  hit the  5-year  limit.   Many                                                              
states do not count months worked  as time limit months. Some have                                                              
a buy-back provision.                                                                                                           
SENATOR WARD  asked if  any of those  states put  clients on  to a                                                              
separate  program after  five years.   He  expressed concern  that                                                              
some clients will  need assistance for their entire  lives so they                                                              
will use up part of the 20 percent cap.                                                                                         
MS. FITZJARRALD  said that is true  and noted that some  states do                                                              
not wait  5 years before  transferring certain clients  into state                                                              
programs.  She said she did not know the number of states.                                                                      
SENATOR WARD suggested changing the  front-end criteria to free up                                                              
funds to  take care  of clients  who will  truly continue  to need                                                              
assistance after the 5-year limit.                                                                                              
MS.  SALERNO asked  if Senator  Ward was  suggesting changing  the                                                              
eligibility requirements.                                                                                                       
SENATOR WARD said  that is correct and is why he  is curious about                                                              
what other states have done.                                                                                                    
CHAIRWOMAN GREEN asked Ms. Hoback to comment.                                                                                   
MS. SANDY HOBACK, American Institute  for Full Employment, pointed                                                              
out that most states are just now  getting to the 5-year limit and                                                              
have  not had  a problem  staying  within the  20 percent  federal                                                              
requirement.  She  said  that  how states  are  dealing  with  the                                                              
problem  runs the public  policy  gamut. The states  who are  more                                                              
liberal  in  their  interpretation  of  who  gets  extended  place                                                              
clients in state-only programs earlier.  Those state-only programs                                                              
are funded  with either state MOE  funds or with  additional state                                                              
dollars.  Ohio,  which is on the  other end of the  spectrum, does                                                              
not  foresee any  problem staying  within the  20 percent  federal                                                              
requirement because  its criteria to  grant an extension  are much                                                              
more conservative.   She said that all states use  criteria so the                                                              
process  for an  extension  is not  arbitrary.  She indicated  the                                                              
issue in Alaska is whether it wants  to use the cap in addition to                                                              
criteria, which is already being used.                                                                                          
MS. HOBACK advised  members to view this legislation  as a package                                                              
deal. By  strengthening  the sanction process  and the  work-first                                                              
approach, the expectations on clients  will be heightened from the                                                              
start. She  believes DPA  will see far  fewer people  hitting that                                                              
timeline because the expectations  have been adjusted so that they                                                              
must be  doing something  everyday,  not only  during the last  12                                                              
months. She indicated that she has  brought the committee the best                                                              
research from  around the country  to justify the  recommendations                                                              
in the study.  She suggested requiring  DPA to report back  to the                                                              
legislature after  a year of processing extension  applications to                                                              
inform legislators  of  the circumstances  under which people  are                                                              
granted extensions.                                                                                                             
SENATOR LEMAN referred  to Sec. 4 of SB 293 and  noted that 11 new                                                              
sections  must have been  added to  the Food  Stamp Act  since the                                                              
legislature passed  Alaska's welfare reform legislation.   He then                                                              
asked why the word "certificate"  is being changed to "allotment."                                                              
MS. SALERNO  said Senator  Leman is correct  about the  Food Stamp                                                              
Act.  She  stated,  regarding  allotments,  that  clients  do  not                                                              
actually receive stamps or certificates  anymore; almost all funds                                                              
are transferred electronically.                                                                                                 
SENATOR LEMAN confirmed  that it is a different  way of delivering                                                              
the same thing.                                                                                                                 
SENATOR LEMAN  asked what the public  purpose is of  expanding the                                                              
cash  payment  to  divert individuals  from  registering  for  the                                                              
welfare program.                                                                                                                
MS. SALERNO  said that  field workers believe  that two  months of                                                              
benefits are  not enough to cover  the costs that bring  people to                                                              
the program  and the purpose  is to divert  them from  coming onto                                                              
the program.  The cash  payment will allow  families to  cover the                                                              
expenses that are keeping them from  being self-sufficient.  Those                                                              
families may not need all of the  benefits provided by the welfare                                                              
program and they  are job-ready. She pointed out  that individuals                                                              
must  be  job-ready  to  qualify  for  a  diversion  payment.  DPA                                                              
believes that if the payment is expanded,  more people will choose                                                              
the diversion option.                                                                                                           
SENATOR LEMAN  asked if the state  has explored what can  be done,                                                              
in terms  of diversion,  to help  make decisions  for people.   He                                                              
commented that  often people do not  make the right  decisions and                                                              
he guesses that many people are in  this circumstance because they                                                              
made a bad choice at some time. He  asked how much flexibility DPA                                                              
has to make choices  for them so that the diversion  benefits them                                                              
and the program.                                                                                                                
MS. SALERNO  explained when families  come to DPA  for assistance,                                                              
they have  to tell the  caseworker what  is going on.  Caseworkers                                                              
could  give advice  but it  is probably  after the  fact, as  poor                                                              
decisions may have already been made.                                                                                           
MS. HOBACK  said that the  provisions in  SB 293 are  coupled with                                                              
her work  with DPA to  strengthen its  upfront approach.  From the                                                              
first contact, the  individual is engaged in what  it will take to                                                              
get  employed. The  presumption  with this  approach  is that  the                                                              
individual is there  to start working on employment.  Putting that                                                              
expectation  upfront creates  a strong  motivation  for people  to                                                              
make better  decisions or to  acknowledge the poor  decisions they                                                              
have made  in the past.  In addition,  the diversion  program will                                                              
allow  clients  to move  forward  rapidly  and avoid  the  welfare                                                              
system altogether.                                                                                                              
2:21 p.m.                                                                                                                       
SENATOR  LEMAN  said  that  although  he  is  reticent  to  accept                                                              
anecdotal evidence  as the norm,  he has heard from  field workers                                                              
about  people  moving  to  Alaska  because  Alaska  provides  more                                                              
benefits, especially  with the permanent fund dividend.   He asked                                                              
what  can be  done to  keep families  together  in their  original                                                              
support groups.                                                                                                                 
MS. SALERNO informed  Senator Leman that DPA counts  the months of                                                              
assistance  that  people  have  received   in  other  states.  She                                                              
questioned what  the agency could do  at that point if  the person                                                              
is eligible.                                                                                                                    
MS. HOBACK said  that some states have capped the  grant amount to                                                              
what  the  client  was  receiving   in  the  previous  state.  She                                                              
suggested  that   restricting  those  payments  would   require  a                                                              
statutory change.                                                                                                               
SENATOR LEMAN said that both of those  proposals have been debated                                                              
and have substantial support but neither has gone forward.                                                                      
MS.  FITZJARRALD  said  it  is  her  understanding  that  limiting                                                              
benefits  to the  amount  granted  in a  previous  state has  been                                                              
struck down by the courts.                                                                                                      
CHAIRWOMAN GREEN noted that provision  was in the original welfare                                                              
reform bill but was removed for that reason.                                                                                    
MS.  FITZJARRALD  reiterated that  the  time  limit is  a  driving                                                              
factor if the client has moved from  another state where they were                                                              
collecting benefits.                                                                                                            
MS. HOBACK  said that as the  welfare administrator for  the State                                                              
of Oregon,  she  saw a lot  of people  move in  from Oregon,  even                                                              
though  Oregon's grant  levels were  lower. Once  Oregon began  to                                                              
transform  its  system  by  putting   the  right  expectations  on                                                              
clients, the  in-migration slowed  down because people  understood                                                              
they would  have to do something.  Some of the people  who migrate                                                              
do so to avoid requirements so strong ones are a deterrent.                                                                     
CHAIRWOMAN GREEN asked what kind  of oversight will determine when                                                              
it is  time to  say "enough is  enough" if there  is no  method of                                                              
MS. SALERNO  said DPA is  discussing having  a time limit  but has                                                              
not set a policy  yet.  DPA is trying to achieve  wage progression                                                              
and advancement so that families  can support themselves with what                                                              
they earn. Many families go to work for the minimum wage.                                                                       
CHAIRWOMAN GREEN  asked if that applies  to the 24-month  model as                                                              
MS. SALERNO said  it would and that most clients  are working long                                                              
before 24 months.                                                                                                               
CHAIRWOMAN GREEN asked if it is safe  to assume that cash benefits                                                              
would be ratcheted  down for clients once they get  jobs but self-                                                              
sufficiency services will continue.                                                                                             
MS.  SALERNO  said that  is  correct and  is  what  DPA wants  the                                                              
authority to do.                                                                                                                
SENATOR WARD asked if DPA is already doing that.                                                                                
MS. SALERNO said DPA is doing it in certain cases.                                                                              
SENATOR WARD asked what the state  match is for the federal grant.                                                              
MS. SALERNO said  that under the AFDC program, it  was 50/50.  Now                                                              
the state receives a block grant.                                                                                               
MS. FITZJARRALD  explained that the  state must spend  80 percent,                                                              
as a  maintenance of  effort, of  the amount  it spent to  provide                                                              
assistance in 1994.                                                                                                             
SENATOR LEMAN  asked if the state  is providing 80 percent  of the                                                              
1994 amount, which would meet the minimum requirement.                                                                          
CHAIRWOMAN GREEN said Alaska is right at the minimum.                                                                           
SENATOR LEMAN asked  if the federal grant amount  has remained the                                                              
same as the amount it contributed in 1994.                                                                                      
MS. FITZJARRALD  said it  is about the  same with a  variable this                                                              
year due to a supplemental payment.                                                                                             
CHAIRWOMAN GREEN asked who pays when  the value of the food stamps                                                              
is applied to a wage subsidy.                                                                                                   
MS. SALERNO said that is federal money.                                                                                         
CHAIRWOMAN GREEN  asked if the federal  agency will let  the state                                                              
use the cash instead of food stamps.                                                                                            
MS. SALERNO said it will but the  federal agency has very rigorous                                                              
requirements that DPA must follow.                                                                                              
CHAIRWOMAN GREEN commented  that a person who  participates in the                                                              
diversion  program  must  wait  12   months  before  applying  for                                                              
assistance but  the bill also contains  language that says  if the                                                              
person does apply  for benefits, the cash only has  to be prorated                                                              
and   handled   as   direct  income   and   is   counted   against                                                              
qualification.  She asked what the  difference is between the cash                                                              
assistance and everything a client  would have received under ATAP                                                              
MS. FITZJARRALD  said that currently under the  diversion program,                                                              
DPA  makes a  cash payment  for two  months and  does not  provide                                                              
self-sufficiency  services.  SB  293 would  allow DPA to  increase                                                              
the cash payment to three months.                                                                                               
CHAIRWOMAN GREEN  stated, "I just want  to be sure that  we're not                                                              
opening  that  up  and  not  just  doing  a  two  to  three  month                                                              
difference versus maybe a greater value per unit."                                                                              
MS. HOBACK said this does not change that.                                                                                      
CHAIRWOMAN  GREEN informed  members that  she plans  to bring  the                                                              
bill up again on Wednesday and that  she will work on an amendment                                                              
to require a report from DPA.                                                                                                   
SENATOR WARD  asked if any projections  have been done  on whether                                                              
the number  of people who will have  to stay on the  program after                                                              
five years  is increasing  at a certain  amount each year  so that                                                              
those  people  will eventually  comprise  more  than half  of  the                                                              
CHAIRWOMAN  GREEN  suggested that  if  the program  is  incredibly                                                              
successful and everyone except those  who have incredible barriers                                                              
go to work, it is conceivable.                                                                                                  
MS. HOBACK  said it is  too early to  know where that  number will                                                              
level but the  legislature should get  a report to keep  an eye on                                                              
it.  She  noted this is a  national issue and all states  are just                                                              
hitting the five-year time limit.                                                                                               
SENATOR DAVIS  asked Ms.  Hoback if she  is suggesting  the report                                                              
requirement be  in the legislation  or whether  it be done  with a                                                              
letter of intent.                                                                                                               
MS.  HOBACK  said she  does  not  know how  the  legislature  does                                                              
business and that it is up to legislators.                                                                                      
CHAIRWOMAN GREEN confirmed that a  letter of intent would suffice.                                                              
She  then  asked if  there  have  been annual  reports  since  the                                                              
MS. SALERNO said DPA does a status report every year.                                                                           
SENATOR LEMAN said  he is reticent to totally lift  the 20 percent                                                              
cap  because  he  believes  setting  goals  changes  behavior,  of                                                              
clients  as well  as DPA employees.    He said that  he views  the                                                              
program  as successful  - to reduce  the caseload  from 12,000  to                                                              
5,600. He would  like to see that  number go down to  3,000 in the                                                              
next several years.                                                                                                             
CHAIRWOMAN  GREEN asked if  DPA has  forecasted the percentage  of                                                              
clients who will need an extension over the next few years.                                                                     
MS. FITZJARRALD  said the  chart shows that  in FY05, 980  of 4900                                                              
clients  would  be allowed  the  exemption  (20 percent)  but  the                                                              
projected number of qualified individuals is 1000.                                                                              
SENATOR WARD said  if the legislature was to develop  a state-only                                                              
funded program  for the  families over the  20 percent  that would                                                              
count toward  Alaska's  match amount. He  asked whether  different                                                              
criteria could  be applied because  their needs will  be different                                                              
from a client who is on the program for three months.                                                                           
MS. FITZJARRALD  explained that  any money  used for a  state-only                                                              
program to  serve families  who are  cut off  because of  the time                                                              
limit could  be counted  toward the  state maintenance  of effort.                                                              
Regarding separate  criteria, the legislature could do  that.  DPA                                                              
is working  with criteria in existing  law for ATAP,  which allows                                                              
an exemption to be granted to four groups.                                                                                      
SENATOR  WARD asked  if it  would  be beneficial  to have  certain                                                              
criteria for people who are not self-sufficient  after five years.                                                              
MS. FITZJARRALD  said DPA believes it  has done a fairly  good job                                                              
of describing who those people are  in the handout.  DPA's goal is                                                              
always to  get clients back into  the workforce or working  to the                                                              
extent they are able.                                                                                                           
MS. SALERNO added that even though  these people may be granted an                                                              
exemption, they will  not remain on the program  forever. DPA will                                                              
continue  to  work  with  them to  become  as  self-sufficient  as                                                              
possible. DPA  has shied  away from putting  them into  a separate                                                              
category.  Clients who  are severely  disabled and  will never  be                                                              
job-ready are  referred to SSI. If  the cap is repealed,  DPA will                                                              
be able to use state money to serve  the extended clients and work                                                              
with them toward self-sufficiency.                                                                                              
SENATOR  WILKEN said,  regarding  an earlier  question by  Senator                                                              
Ward,  it appears  from the  chart that  over time  the number  of                                                              
people  on  extensions  could  comprise  over 50  percent  of  the                                                              
program. He calculated that in 20  years, families with extensions                                                              
could comprise 20 percent of the program.                                                                                       
MS. FITZJARRALD acknowledged  that is possible.   DPA expects that                                                              
over time  the percentage of families  who will need  an extension                                                              
will grow cumulatively.  She cautioned,  however, that the numbers                                                              
on the  chart are estimates  and that  no historical  data exists.                                                              
She pointed  out that some  families may  drop off of  the program                                                              
much faster than DPA has projected.                                                                                             
MS. HOBACK added  that there is no national experience  with which                                                              
to  validate the  projections.  She said  the  important thing  to                                                              
remember is  that there  will always be  new clients coming  in so                                                              
the program  would never be  to a place  where 100 percent  of the                                                              
caseload is on extension.  Also,  just because a client is granted                                                              
an extension  does not mean  that client is  not held to  the same                                                              
requirements  as  other clients.    They  will need  to  cooperate                                                              
CHAIRWOMAN  GREEN asked  for a  sense of  the committee  regarding                                                              
whether to  put the report requirement  in statute and  whether to                                                              
apply  a floating  percentage formula  rather  than repealing  the                                                              
SENATOR WARD asked for an explanation of a floating percent.                                                                    
CHAIRWOMAN  GREEN  said  a  calculation  could be  made  from  the                                                              
projected figures to determine a floating percentage rate.                                                                      
SENATOR WARD  asked if  the cap could  be kept  at 20 percent  but                                                              
criteria  could  be established  for  those  over 20  percent.  He                                                              
suggested  granting an  extension  on a  month-by-month basis.  He                                                              
felt that  the current  criteria should be  applied to  anyone who                                                              
fits into the  20 percent category  but anyone who is over  the 20                                                              
percent, should be required to meet harder criteria.                                                                            
3:05 p.m.                                                                                                                       
CHAIRWOMAN GREEN explained that the  figures in 1995 and 1996 were                                                              
around 12,000 so  the 20 percent was seen as  reasonable and based                                                              
on the  thought that  one out  of five  might need  consideration,                                                              
knowing  that  the  20  percent  had  needs  that  exceeded  other                                                              
clients' needs  and were  not going to  change substantially.   As                                                              
the  program   moved  forward   successfully,  the   total  number                                                              
decreased.  Some argue that the 20  percent number should still be                                                              
based in  12,000, not the  current number  of clients.   She asked                                                              
for input  on this bill from  other committee members as  she does                                                              
not want to recraft it herself.                                                                                                 
SENATOR  DAVIS said  she supports  the  bill as  is.   She has  no                                                              
problem  requiring  a  report  statutorily  or with  a  letter  of                                                              
intent. She suggested that after  a report is submitted next year,                                                              
the committee  will have  a better  idea of  where the program  is                                                              
SENATOR LEMAN said  he believes that a number of  clients who meet                                                              
the criteria  for an extension  could participate in  options like                                                              
cottage industries at  least part time.  He said  he would like to                                                              
see people  have to participate  in optional activities  that will                                                              
compensate  society  in  exchange   for  benefits.  He  felt  that                                                              
participation would benefit the client as well.                                                                                 
CHAIRWOMAN  GREEN asked  if some  clients who  pass the  five-year                                                              
time limit will receive partial benefits.                                                                                       
MS. SALERNO said  Chairwoman Green is referring to  people who fit                                                              
the criteria.                                                                                                                   
CHAIRWOMAN  GREEN asked,  if  the five-year  limit  was in  effect                                                              
today, some clients would be receiving partial assistance.                                                                      
MS. SALERNO said there would be because  some people are currently                                                              
working up  to their capacity but  they earn minimum wage  and fit                                                              
the criteria.                                                                                                                   
SENATOR LEMAN referred  to the criterion that exempts  a victim of                                                              
domestic violence  from the  time limit and  asked if  that person                                                              
must be  physically battered and  unable to function or  scared to                                                              
go  out  to the  workplace  because  of  possible contact  with  a                                                              
perpetrator.  He said  he imagines  that client  could do  several                                                              
different work activities  to compensate for services  to create a                                                              
win-win situation.  He repeated his  philosophy that things can be                                                              
done  to change  behavior, taking  into consideration  extenuating                                                              
MS.  SALERNO pointed  out that  a discussion  is going  on at  the                                                              
federal  level  about expanding  the  definition  of what  can  be                                                              
considered a work  activity so that people who may  not be able to                                                              
participate  in the workforce  can participate  in skill  building                                                              
activities or work preparation.                                                                                                 
TAPE 02-12, SIDE A                                                                                                              
MS.  FITZJARRALD said  that the  criteria  is not  the only  thing                                                              
considered  when  an  extension is  granted;  DPA  still  requires                                                              
clients  to be  actively  involved in  developing  a family  self-                                                              
sufficiency plan and  to carry through with those  activities.  If                                                              
they do not, they are subject to  non-compliance.  She noted that,                                                              
regarding a domestic  violence victim who is living  in a shelter,                                                              
DPA looks  at any type  of skill building  or positive  steps that                                                              
will take  that client forward to  self-sufficiency.  If  a client                                                              
does not  follow the plan,  he or she  will not get  an extension.                                                              
She added that extensions are also  based on compliance with child                                                              
support orders.                                                                                                                 
CHAIRWOMAN  GREEN asked committee  members if  they would  be more                                                              
comfortable  listing  the  requirements for  extensions,  such  as                                                              
compliance, in statute.                                                                                                         
MS.  FITZJARRALD said  that right  now,  any client  who does  not                                                              
comply gets sanctioned.  That policy does not  change just because                                                              
a client is granted an extension.                                                                                               
CHAIRWOMAN  GREEN asked  if that  is  clearly spelled  out in  the                                                              
MS. FITZJARRALD  said she  believes it is  clearly spelled  out in                                                              
the new sanction policy in SB 293.                                                                                              
CHAIRWOMAN  GREEN said  the committee  will take  this measure  up                                                              
again  and that  on Wednesday,  the  counsel to  the Secretary  of                                                              
Education,  Susan Sclafani, will  give a  presentation.   She then                                                              
adjourned the meeting at 3:16 p.m.                                                                                              

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