Legislature(1993 - 1994)
02/03/1993 09:06 AM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATOR LEMAN announced SB 6 (ANNUITY PROGRAM AMENDMENTS) to be up for consideration. Number 750 SENATOR KERTTULA, Sponsor, asked Ted Beilman to join him at the committee table. SENATOR KERTTULA explained that this particular piece of legislation or a very close cousin passed the Senate last term. This was a bill that almost 100,000 people voted for. He said he knows the budget process and the state can afford the annuity. This time it should be adopted. Number 650 In December the Wasilla Chamber of Commerce again endorsed the annuity bill. As far as he is concerned, the Department of Administration, the people in the Office of Management and Budget, the third floor influence peddlers with new master's degrees who have never been north of Yakutat have back doored and confused this issue. Their stair stepping program was uneven and puts the whole program at risk, because it may be unconstitutional. He asked that they pass the bill and speed it on its way. Number 550 NANCY BEAR USERA, Commissioner, Department of Administration, explained that the Governor has introduced an alternative to SB 6. She said the governor supported the annuity in 1986 when it was on the ballot, as she and a lot of Alaskans did. Had that bill passed at that time, we would be a long way down the road toward resolving some of these issues and narrowing the funnel of people coming into the program. The fact is for whatever reason, the bill did not pass, it did not pass in 86, 87, 88, 89, 90, 91, 92 and here we are in l993 and the governor continues to support an annuity concept. She said she didn't think we could discuss this bill without admitting it is a bill for the middle aged. According to the Governor's bill, anyone who is now 62 or older will be protected for life as the seniors are grandfathered in in Senator Kerttula's bill. Number 500 COMMISSIONER USERA said it was appropriate that people who were 40-55 years old enter into this discussion, and let them know what kinds of programs they want to be available for them when they look to the state for some supplemental support. COMMISSIONER USER thought the financial aspects of this annuity simply would not make it viable. The administrative costs are to come out of proceeds. I takes a tremendous amount of capitalization to be able to generate sufficient money to pay market return on those investments as well to absorb the rate. She also didn't think it was realistic to say that 50% of the people were going to participate in the program. And the people who do participate are probably the people least likely to need supplemental income when they are older. The fact is that most people take their dividend and spend it on current monthly needs, so assuming there is going to be a high participation level is not realistic. Thirdly, she said, the there are financial institutions that have savings programs. Certainly we would like to encourage savings for our future years. The Department of Revenue has developed a direct deposit program so people can have their dividend check deposited directly into their savings account. Fourth and finally, she didn't think it was the right time for the state to be setting up new government bureaucracies. SENATOR LEMAN thanked Commissioner Usera and said that he would like additional input from her in the future. Number 450 MARY LOU MEINERS, American Association of Retired Persons, supportED SB 6. SENATOR LEMAN thanked everyone for their participation and adjourned the meeting at 10:46 a.m.
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