Legislature(2001 - 2002)
04/02/2002 03:40 PM Senate STA
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HB 162-ABSENCES UNDER LONGEVITY BONUS PROGRAM
CHAIRMAN THERRIAULT announced it was his intent to discuss the
bill, but not to move the bill from committee that day.
REPRESENTATIVE GRETCHEN GUESS introduced HB 162 on behalf of
Representative Fred Dyson. She had been working on the
legislation with him.
The bill does two things to the Longevity Bonus Program.
1. It extends the paid leave absences from 30 to 60 days. The
reason for that change is there are people who receive the
bonus and cannot visit their families out of state because
economics require that they drive and there isn't enough
time to leave, visit and return in just 30 days.
2. It would change the unpaid leave time from 90 days to five
years. Individuals who leave the state would not receive the
bonus while they were gone, but they would be eligible to
receive it again if they returned within five years.
The Department of Administration suggested the five year time
period to help them clear their books. House members discussed
changing the unpaid five-year sabbatical but they didn't act.
They understand Senator Halford is interested in reducing the
five years and they are receptive to a change. A change should
not impact the fiscal note. The fiscal note is negative because
people are currently flying back to Alaska to remain eligible for
a month and then flying back out. Extending the unpaid leave
saves the state money and provides seniors additional
flexibility.
CHAIRMAN THERRIAULT asked her to explain the current bill
language on page 2, lines 18 through 23.
REPRESENTATIVE GUESS explained it defines an unqualified person
as someone who would be eligible for the longevity bonus but they
were not qualified because they were incarcerated.
CHAIRMAN THERRIAULT restated that those individuals would meet
all the criteria but, because they are incarcerated, they do not
get the bonus. He asked whether they would receive the bonus once
they are paroled.
REPRESENTATIVE GUESS deferred the question to the Department of
Administration.
ALYSON ELGEE, Deputy Commissioner with the Department of
Administration, stated they made several assumptions in the
preparation of the fiscal note. They have data that enabled them
to develop a cost estimate for extending the paid leave from 30
to 60 days. They looked at a year's records and figured the cost
to pay those people who had been absent for over 30 days an
additional one-month check.
When they looked at the provisions for allowing extended absences
they had to make some guesses about what people's behavior might
be. To estimate the cost savings, and they believe one will
occur, they assumed that an average of 10 percent of the
longevity bonus recipients would be absent one month longer than
they currently are today thereby forgoing one month's check. This
would result in an estimated savings to the state of $435,000 a
year and the estimate may well be conservative.
The program was closed in 1997 and all recipients are 70 years or
older. Loosening some of the provisions would allow those seniors
much appreciated flexibility so they can spend more time visiting
with family and friends outside the state. There are numerous
anecdotal stories about seniors who gave up their bonus when they
moved from the state only to find that they didn't like living
out of Alaska. However, by the time they returned to the state
they were no longer eligible for the longevity bonus even though
they may have spent a majority of their life in Alaska. This
would help such cases. As Representative Guess stated, they
selected the five-year limitation so they could purge their rolls
and have an idea of their potential clientele for the program.
SENATOR PHILLIPS asked how many individuals currently receive the
longevity bonus.
MS. ELGEE replied that, on average, they issue between 18,000 and
19,000 longevity bonus checks per month. There are always more
people who are eligible, but they are absent for some reason.
SENATOR PHILLIPS then asked about the breakdown for the different
payment amounts.
MS. ELGEE replied the information is available, but she would
have to provide it later.
SENATOR PHILLIPS asked her to provide the average state residency
for the bonus recipients.
MS. ELGEE said that information is not readily available.
SENATOR PHILLIPS said his reason for asking the questions is that
he remembers that 10 to 20 percent of the recipients had lived in
the state two years or less.
MS. ELGEE said she would check on information that relates to
length of residency.
CHAIRMAN THERRIAULT announced he was interested in that
information as well. It is frustrating to him that there are some
who got into the program with minimum residency while some who
lived here for 50 years, but weren't quite old enough to qualify
before the program was closed get nothing. If this legislation
passed, those that qualified with minimum residency would be able
to leave the state for up to five years then return and start
receiving the bonus again. In a lot of people's opinion, they
shouldn't have gotten the benefit in the first place.
MS. ELGEE pointed out that when seniors are out of state for more
than 30 days, for any reason, they are not paid.
CHAIRMAN THERRIAULT said Senator Halford has some concerns over
the necessity of section 2, which is the five-year cutoff. He
asked for an explanation of how that section helps clear the
roll.
MS. ELGEE replied they wanted some time frame within which they
could clean up the longevity bonus rolls. When people leave the
state they are suspended from the program, but they may stay
suspended forever. If they never hear from people again, they
have no way of knowing whether they are deceased or if they are
gone from the state forever. Currently they project that the last
bonus check will be paid in approximately 2030. At that time,
they don't want to have 10,000 people on the roll even if they
are only paying two of them. They were hoping to be able to purge
the rolls along the way, but five years was subjective.
CHAIRMAN THERRIAULT asked what the shortest workable period would
be.
MS. ELGEE said one to two years is reasonable. One of the current
problems is that medical absences are allowed, but there is no
provision for an accompanying spouse.
CHAIRMAN THERRIAULT asked if there wasn't a provision allowing a
one-year absence from the program after which the individual
could re-qualify.
MS. ELGEE replied that was an amendment that Senator Tim Kelly
sponsored several years ago. It provides for a one year unpaid
sabbatical once every five years.
CHAIRMAN THERRIAULT asked whether she had other examples of how
the 30 day limitation is unduly burdensome.
MS. ELGEE replied that the House HESS Committee developed that
provision.
ROSALEE WALKER, President of the local AARP and board member of
the Older Persons Action Group (OPAG), testified in support of HB
162. She asked that members pay attention to the negative fiscal
note. The bill requires a simple modification, but it would mean
a lot to the recipients. The program was started as a reward for
a specific group, but there was a lawsuit and that's when people
started moving to Alaska to receive the bonus. Because of this,
legislators decided to phase the program out over time.
Nonetheless, the bonus is a very important part of many seniors'
income.
CHAIRMAN THERRIAULT said the court case did explode the
participating pool for the bonus program so the Legislature had
to take action. At the time that they were considering change,
some of his constituency that were long time Alaskans expressed
an interest in doing away with the program altogether rather than
grandfathering in people who had been in Alaska for just two or
three years. The proposed changes would give those newcomers
increased flexibility for travel and that won't sit well with
some long term Alaskan seniors. That needs to be factored into
the decision to make changes.
SENATOR DAVIS asked Ms. Walker about her thoughts on the five-
year term.
MS. WALKER said she hadn't really considered that point because
if she leaves for two years she won't come back. Alaska has been
her home for 35 years, but if she were gone for two years it
would be for an extreme reason. Five years is certainly more than
fair and she could personally accept less.
CHAIRMAN THERRIAULT said it's important to keep in mind that
there is currently a one-year non-paid sabbatical allowed every
five years. The proposed section 2 would allow a continuous
absence above and beyond what is allowed by the sabbatical.
He asked Representative Guess to comment on when they decided to
extend paid absences from 30 to 60 days and whether it was part
of the original idea.
REPRESENTATIVE GUESS replied the 30 to 60 day change came first
and was the result of a constituent request. Her research
indicated that the 30 day limit was a subjective decision. The
difficulty is the free rider problem, the people that qualified
with just two or three years of residency. Everyone wants to
provide flexibility to the seniors that lived in Alaska in the
1940s, 1950s and 1960s, but along with those come the newcomers.
Because of the court decision, it's unclear what can be done
about that.
The bill began with the 30 to 60 day change and the department
asked for the change from the 90 day allowed absence to a five
year unpaid sabbatical. This would provide more flexibility to
seniors who were flying into and then back out of Alaska to
maintain their eligibility. This is the part of the bill that
provides the overall negative fiscal note. It's a way to save the
state money and provide seniors more flexibility at the same
time.
CHAIRMAN THERRIAULT asked whether the original bill had just the
30 to 60 day change so there was a cost of implementation.
REPRESENTATIVE GUESS replied that in working with the department
on the 30 to 60 day change they suggested the 90 day to five year
change. When they put those together, the result was a negative
fiscal note.
CHAIRMAN THERRIAULT closed testimony on HB 162 and held the bill
in committee.
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