Legislature(2007 - 2008)Anch LIO Conf Rm
06/26/2007 11:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 4 | ||
HOUSE FINANCE COMMITTEE
June 26, 2007
11:05 a.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 11:05:16 AM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
MEMBERS ABSENT
Representative Richard Foster
ALSO PRESENT
Suzanne Cunningham, Staff, Co-Chair Meyer; Janet Clarke,
Assistant Commissioner, Division of Finance and Management
Services, Department of Health and Social Services; Allie
Fitzjarrald, Acting Director, Division of Public Assistance,
Department of Health and Social Services; John Bitney,
Director, Legislative Office, Office of the Governor.
PRESENT VIA TELECONFERENCE
None
SUMMARY
CSSB4(FIN) am
"An Act extending the cash assistance benefit
program for seniors under the senior care program
and increasing the benefit amount; amending
medical income eligibility provisions for persons
under 19 years of age and for pregnant women; and
providing for an effective date."
HCS CSSB 4 was REPORTED out of Committee with an
"amend" recommendation and with a new fiscal note
by the Department of Health and Social Services.
CS FOR SENATE BILL NO. 4(FIN) am
"An Act extending the cash assistance benefit program
for seniors under the senior care program and
increasing the benefit amount; amending medical income
eligibility provisions for persons under 19 years of
age and for pregnant women; and providing for an
effective date."
Co-Chair Meyer announced that the legislation required a
title change since it referenced persons under 19 years of
age [and these provisions were removed].
Vice-Chair Stoltze MOVED to ADOPT proposed Committee
Substitute, 25-LS0056\N. There being NO OBJECTION, it was so
ordered.
SUZANNE CUNNINGHAM, STAFF, CO-CHAIR MEYER reviewed the
changes contained in the Committee Substitute. She noted
that provisions pertaining to Denali KidCare were removed,
as legislation pertaining to Denali KidCare was passed and
enacted by the Governor.
Ms. Cunningham noted that a new section was added. Section
1, Legislative Intent clarifies that the Senior Benefit
Payment Program would be funded under the FY 08 Adult Public
Assistance (APA) appropriation as a General Relief
th
allocation until the second session of the 25 Legislature
convenes and passes an appropriation bill that creates a new
allocation titled: "Senior Benefit Payments". The second
part of this section clarifies that the pro-rata provisions
contained in the legislation do not apply to appropriations
made August 1 through June 30, 2008. She noted that in FY 08
the program is held harmless against reduction or
elimination of benefits if the appropriation is
insufficient.
There was no change to Section 2; Section 3, which
establishes the Alaska Senior Benefits Payment Program; or
Section 4.
Ms. Cunningham explained that the last change was made in
Section 5: Applicability Section. This section pertains to
the establishment and enactment of emergency regulations by
the Department of Health and Social Services on June 18,
2007. The section clarifies that dual payments cannot be
made.
Provides that an individual who receives cash
assistance or a prescription drug benefit under the
emergency regulations adopted by DHSS cannot receive a
benefit under the senior benefits cash assistance
program, enacted under Section 3, simultaneously.
Representative Thomas questioned if a separate appropriation
bill would be forthcoming.
Co-Chair Chenault noted that the plan would be to add
funding to a supplemental bill [at the beginning of the next
regular session]. Representative Nelson expressed concern
with the timing of a "fast track" supplemental bill. Co-
Chair Meyer noted that the Administration would be consulted
to make sure that the funding is in place before the program
could expire.
Representative Gara explained that funding could run out as
early as February or January. He suggested that the "safe"
thing to do would be to fund the program now.
11:12:50 AM
[The Juneau LIO connection was lost.]
11:15:15 AM
[Connection with Juneau was restored].
JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE
AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES explained that the current version of HB 148 would
have cost [the state] $11 million. She concluded that both
programs [Adult Public Assistance and Alaska Senior Benefits
Payment Program] could be run through April [at the level
contained in the Committee Substitute].
Representative Gara questioned when funding would run out if
the level contained in HB 198 were enacted.
Ms. Clark explained that they could operate both programs
until February 2008, if HB 198 funding levels were adopted.
Representative Gara asked how comfortable the Department was
in their estimates and observed that funding could run out
sooner if estimates are off. Ms. Clark noted that the
current program serves 6,700 individuals and they have
projected a growth of 3,000 more. Additional caseload growth
has been factored in to each assumption.
Representative Gara noted that historically supplemental
legislation has not passed until February or later. He
observed that the Department might have to divert funding if
a supplemental appropriation is not passed and questioned
what programs would suffer.
Ms. Clark advised that the temporary transfer would come
from the Adult Public Assistance program, which is a cash
assistance program that supports very poor individuals who
are over 65 years of age or disabled. The Department chose
not to tap into other general funds within the appropriation
since they are matched with federal funds for maintenance of
effort. These transfers would be more complicated. She
indicated that the Department could borrow from "less easily
done" sources to continue to make the payment if the
supplemental legislation was making its way through the
process and they were convinced that it only needed another
month or so [to be enacted]. She expressed concern with that
option, but emphasized that they would not want payments to
be jeopardized. The Department is not legally able to expend
funds for the program without an appropriation.
Representative Gara asked the Administration's position
regarding an appropriation during the special session to
prevent further worries.
11:20:33 AM
Ms. Clark noted that the Department would work out the
funding to the best of their ability, but that the decision
lies with the Legislature.
Representative Gara noted that clients of Adult Public
Assistance could be in jeopardy for the competing funds and
asked the criteria for those that qualify for APA. Ms. Clark
noted that in order to qualify for APA, individuals must be
at no more than 92.5 percent of the poverty level and must
be disabled or over 65 years of age.
Co-Chair Meyer noted the various options before the
Committee. He questioned how other states operate.
11:22:56 AM
ALLIE FITZJARRALD, ACTING DIRECTOR, DIVISION OF PUBLIC
ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES
explained that most states do not offer cash supplemental
programs to needy seniors. There are no programs such as the
Longevity Bonus Program.
Co-Chair Meyer noted that programs offered by other states
are also offered in Alaska, such as property tax exemption
and senior housing.
Representative Gara suggested that other states with similar
APA programs may have a higher monthly rate and more people
that qualify for assistance. Ms. Fitzgarrald explained that
each state structures their program differently. Some states
pay significantly less and some pay a comparable amount. She
did not think that other states paid at a higher rate. She
noted that most seniors access prescription drugs through
the new Medicare Part B program through Social Security.
Their contributions to the premiums vary.
11:25:29 AM
JOHN BITNEY, DIRECTOR, LEGISLATIVE OFFICE, OFFICE OF THE
GOVERNOR observed that the Governor submitted legislation to
extend the prior benefit level of the Senior Care Program
(at the current $125 a month level). There were some changes
in relation to the drug benefits in the Governor's proposal.
The Governor would like to see the issue brought to some
closure. He noted the need to pass legislation, which would
resolve the issue, without an appropriation. The CS would
place a benefit level that could be managed until
appropriation legislation could be passed during the next
regular session. It may be necessary to adopt funding
authorization prior to the next regular session if the
benefit level is increased. The Governor does not object to
an increase in the payment level, but is concerned with
management of the program.
Co-Chair Meyer summarized that the Governor would be
comfortable with a program in the $11 - $16 million range.
Mr. Bitney affirmed.
11:29:37 AM
In response to a question by Representative Crawford, Mr.
Bitney reiterated that the Governor is only concerned that
they have the ability to manage the benefit and is not
concerned with an increased benefit level.
Representative Crawford noted that supplemental
appropriations are not commonly passed timely and questioned
how the appropriations would be managed.
Mr. Bitney noted that the funding would come from different
allocations, but that careful consideration must occur
regarding required matches.
Representative Thomas asked if a stand alone appropriation
bill would be preferable to inclusion in a supplemental
appropriation bill. He concluded that it would be quicker.
11:32:16 AM
Mr. Bitney reiterated the desire to resolve the issue in an
efficient manner and felt that the proposal would achieve
those goals.
Representative Gara noted the risk that funding would run
out before an appropriation were adopted and questioned if
the Administration would approve funding authorization in
the current special session.
Mr. Bitney concluded that an appropriation bill would need a
minimum of three legislative days [to be passed].
Representative Joule questioned if it is the intent of the
Finance Committee Chairmen to be expeditious and to find the
necessary funds. Co-Chair Meyer deferred comments until the
funding level could be determined, but noted that there are
mechanisms to make the program work until funding is
available in March or April.
11:36:14 AM
Representative Gara noted that there are two inflation
issues. The qualifying level is adjusted for inflation in
the legislation. However, there is no inflation proofing to
the benefit payment amount. He questioned if the
Administration would support the ability to provide, at
their discretionary, an increase adjusted for inflation.
Mr. Bitney replied that they would not object and emphasized
the need for reviews, which the four year sunset would
allow, in light of the long-term fiscal health of the state.
Representative Gara observed that the Administration has the
authority to raise the APA rate for inflation. He spoke
against a hard cap [for the Senior Benefit Program]. Mr.
Bitney noted the need to have further discussions with the
Department regarding the issue.
11:39:37 AM
Co-Chair Chenault expressed concern with inclusion of an
inflation provision on the benefit and emphasized that it is
the legislature's job to determine appropriations.
Representative Gara observed that the legislature would
retain the appropriation power even if the governor was
given the discretion to increase the benefit for inflation
proofing. He noted that, as it stands, the benefit cannot be
increased.
11:42:18 AM
Co-Chair Chenault provided members with a handout (copy on
file). The handout identified the various programs that
benefit seniors: Adult Public Assistance, Senior Care, Food
Stamps, Property Tax Exemptions, Energy Assistance, Assisted
Living Medicaid Wavers, Assisted Living Medicaid Waiver,
Personal Care Attendants, Federal Income Tax Break, Sales
Tax Exemption and Sales tax exemptions in some areas that
have sales tax. He acknowledged that the funding levels
aren't high in many of the programs and that it would be
difficult for some to live on the annual benefits provided.
He emphasized that the entirety of programs need to be
considered in order to determine if the state is providing
intended services and to identify who is affected by the
exemptions.
11:44:51 AM
Representative Kelly MOVED to ADOPT conceptual amendment #1:
extend current program to June 30, 2011; eliminate
prescription drug benefit; change the name to Senior Benefit
Program; and allow Alaska Legal Services to make conforming
changes. Vice-Chair Stoltze OBJECTED.
Representative Kelly acknowledged that some want to change
the terms of the program, but emphasized that the primary
intent of the Special Session is to prevent termination of
the Senior Care Program. He maintained that Alaska has one
of the most comprehensive senior benefit programs in the
nation. He expressed concern that an increase benefit cannot
be sustained in the future due to projected deficits, which
could occur in the next year or the year after. He expressed
concern with attempts to revive the Longevity Bonus Program
and observed that it has not been funded for the past five
years. He noted that 7,000 of those that received the
Longevity Bonus are currently covered under the Adult Public
Assistance and Senior Care programs. He mentioned that there
is dual eligibility in the current programs (APA and Senior
Care). He stressed the need to stop a growth into a
"grander" program. He did not feel that the state should
attempt to attract seniors from other states. He maintained
that not every senior is sick or broke and that, except for
the "poorest of the poor, you are on your own". He
maintained that individuals and their families are supposed
to provide for the benefits of the later years. He stressed
that the "bar should not be lowered so low that we don't
have the cash to do a real first class job of taking care of
those people who absolutely cannot take of themselves."
11:52:30 AM
Co-Chair Meyer summarized that the current program would be
kept in place by Conceptual Amendment 1, which mirrors the
Governor's originally proposal.
Vice-Chair Stoltze questioned if the intent is to continue
the program for the neediest seniors and provide
sustainability. Representative Kelly agreed, but added that
it is also a matter of determining an appropriate level for
public assistance to "kick in, given all of the things that
we are applying right now to the equation." He did not think
[the state] had anything to be embarrassed about in terms of
its senior programs and suggested that the state may be
"going overboard here".
Representative Gara acknowledged the issue of
sustainability, but stressed that the time to adjust for
sustainability is when funding has decreased. He emphasized
that the first place he would cut would not be senior
assistance. He pointed out that there was a $5 million
capital budget, which he felt should be looked at first for
reductions. He asserted that private enterprises in the
capital budget should be eliminated before senior
assistance. Representative Kelly interjected that he is not
proposing a "cut". Representative Gara acknowledged, but
stressed that consideration of a decent senior benefit
program should be based on "what we are going to do in the
future" and maintained that there should be better
prioritization. He noted that he did not want to get into
the "longevity bonus fight", but pointed out that a person
would have to have been in the state for 14 years to be
eligible for a longevity bonus if it were funded. He felt
the debate would not be over the longevity bonus, but on the
senior care benefit. He maintained that in order to qualify
for benefits under Conceptual Amendment 1, a person would
have to be pretty close to pauper statute; a person would
qualify if they earned $16,000 a year. He noted that rent in
Anchorage for a modest one or two bedroom place would be
$1,200 a month, before food, clothing, or fuel was added. He
stressed that none of the proposals would fund those that
are wealthy, but that Conceptual Amendment 1 would cut many
off that do not have enough money for food, rent, cloths and
other basic necessities.
11:57:33 AM
A roll call vote was taken on the motion to adopt Conceptual
Amendment 1.
IN FAVOR: Kelly, Stoltze, Chenault, Meyer
OPPOSED: Thomas, Nelson, Gara, Crawford, Hawker, Joule
Representative Foster was absent from the vote.
The MOTION FAILED (4-6).
11:59:01 AM
Co-Chair Meyer MOVED to ADOPT Amendment 1. Representative
Hawker OBJECTED. Ms. Cunningham noted that Amendment 1 would
make technical changes suggested by the Department of Health
and Social Services and Department of Law. She noted that
"relief" would be added on page 1, line 9 to be consistent
with the allocation, which is "general relief assistance."
The title would be changed from the "Senior Benefit
Assistance" to "Senior Benefit Payment Program". The final
part of the amendment would add a new transition section
that restates the legislative intent section as requested by
the Department of Health and Social Services. A new
transition section restates the legislative intent section
that clarifies in un-codified law that the payments from
August 1, 2007 - June 30, 2008 would not be held harmless
against a pro ration.
Representative Hawker WITHDREW his OBJECTION.
Representative Gara OBJECTED for purpose of discussion and
asked if the amendment clarifies that benefits would not be
reduced through pro-ration if an appropriation is expected
during the next legislative session. Ms. Cunningham agreed
and noted that the fiscal year FY08 would be covered as long
as there is an appropriation during the Twenty-Fifth Alaska
State Legislature.
Representative Gara WITHDREW his OBJECTION. There being NO
OBJECTION, Amendment 1 was adopted.
12:01:12 PM
Representative Hawker MOVED to ADOPT Amendment 2. Co-Chair
Meyer OBJECTED. Representative Hawker noted that the
amendment would raise the benefit level to the same level as
considered under HB 198: $250 per month at the upper level.
The lower bracket would be raised to households not
exceeding 175 percent of the poverty level. He acknowledged
sustainability issues, but maintained that these levels
could be achieved and emphasized that "where there is a
will; there is a way."
12:04:03 PM
Representative Crawford spoke in support of the amendment.
Representative Kelly spoke against the amendment. He noted
that, under the original proposal [HB 198], the Longevity
Bonus Program would have been eliminated forever. He felt
that the purchase price was too high, even with the deletion
of the Longevity Bonus Program.
Co-Chair Meyer summarized that the Administration would be
comfortable with the funding levels of the current program
or those contained in SB 4 and questioned if they would
still be comfortable with a $20 million program as contained
in HB 198.
12:07:20 PM
KARLEEN JACKSON, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES responded that she would not use the word
"comfortable" for a program that went beyond $120 a month,
since funds would run out at an earlier date if the funding
were increased. She indicated that a special session would
be an option if funding ran out before the next regular
session.
Ms. Clark provided a proposed fiscal note, which would
pertain to HCS CSHB 198 (FIN). The note estimates $18.5
million would be spent for FY 08 under Amendment 2. She
observed that 3,000 more seniors would qualify under the
benefit level contained in Amendment 2 than under the
Governor's proposal. The Department projects that funding
for APA and the new Senior Benefit program would run out in
February 2008. Caseload assumptions project that a
significant number of individuals in the mid level, below
100 percent of poverty, would take advantage of the benefit.
Under the amendment, they would receive $175 a month or $50
more than under SB 4. The Department estimates that fewer
individuals would take advantage [of the Senior Benefit]. At
the lower level of 175 - 100 percent, 5,700 individuals at
$125 a month for a total of 10,700 individuals are estimated
to take advantage of the program. The Department has not
managed a peer benefit level before and is trying to use
available data for the best estimates. She summarized that
the first year would cost $18,500,000 and that funds would
run out in February 2008.
12:11:00 PM
Representative Hawker acknowledge comments by Representative
Kelly and pointed out that the amendment only pertains to
payout provisions and is only half of the compromised
reached by HB 198.
12:11:55 PM
Representative Kelly noted that the state's population is
aging and questioned what the program would look like in
2020. Commissioner Jackson concurred that there is a growing
senior population and acknowledged concerns of
sustainability.
Representative Kelly questioned if there is intent to grow
the senior population in the state. Commissioner Jackson was
not aware of such intent.
Representative Joule spoke in support of the amendment with
the understanding that choices would need to be made in the
coming years. He stressed the difference in value of the
dollar to the out reaches of the state.
12:15:10 PM
Representative Gara asked what was spent on the Longevity
Bonus when it ended in 2003. Ms. Clark stated that it would
cost $33.7 million to restart the program. The program was
in the $40 million dollar range when it ended. The Longevity
Bonus Program was over $50 million in 1993. Representative
Gara stressed that the state had sufficient funds while the
price of oil was $18 a barrel (not $60) and concluded that
it was unfair to say this is a new $20 million burden. He
suggested that it is a cost savings for a program that the
state supported at a higher level with less revenue
available.
12:17:06 PM
Representative Thomas noted that other programs benefiting
seniors have been added. Ms. Jackson suggested that "in many
ways we are comparing apples to oranges." Different services
have been added and the costs of services have gone up in
general. Representative Thomas expressed concern that the
amendment would require an additional special session for an
appropriation. He observed the number of special sessions
over the past years. He spoke in opposition to the
amendment.
12:19:47 PM
Representative Crawford recalled that the Personal Care
Attendance Program was initiated to save the state funding
by reducing the cost of nursing homes.
Representative Kelly expressed concern that the legislature
would find it difficult to sunset the [Senior Benefit]
program.
Commission Jackson noted that the Department of Health and
Social Services' budget has been approximately a third of
the state's overall [general fund] budget, but that it is
slightly less at the current time.
Representative Kelly noted that the Department of Health and
Social Service's budget has grown at a very rapid and
unsustainable rate. He maintained that the state is "doing
more for folks than we were." In reference to the raising
cost of the Personal Care Program, he maintained that "we
were paying family members to do what family members out to
do." He acknowledged the work of the personal care
attendants, but felt that the bar was too low and "it got
away from us." He spoke in support of the high multiplier
and against the amendment, since he is "hesitant to put
something in place and then take it away." He spoke in
support of continuing the current program without increase.
12:23:37 PM
Representative Gara pointed out that at the highest level
Senior Care would not be given to people that have a lot of
money. Individuals would not be eligible under the amendment
"if they made anything close to $2,000 a month and I don't
think there is anyone here that can live on $2,000 a month."
He did not "buy the argument that we should punish people
who make less than $2,000 a month because other people are
so sick that they need personal care attendants to take care
of them at home."
12:25:32 PM
Representative Hawker acknowledged the challenges of an
unsustainable human services budget. The Lewin study, which
analyzed the demographics of the populations being served by
the Department, showed that by 2025 the preponderance of
services would go to adults instead of children due to the
growth in the low income senior population of the state.
Currently, $380 million in general funds are spent on
Medicaid; this number would be $2.2 billion by 2025 for
Medicaid alone, which is more than the entire current human
services budget. He acknowledged the catastrophe the state
faces in meeting this level of need. He maintained the
state's priority is to target the needs of the most
vulnerable citizens. He could not support the non-needs
based Longevity Bonus program. The rate structure [in
Amendment 2] would target the preponderance of poverty in
the state. He acknowledged the level of poverty in rural
areas, which he felt was equal to some of the most
horrendous third-world poverty conditions. The amendment
would offer $250 [a month] to someone whose household income
does not exceed 75 percent of the federal poverty guideline.
"The ideal was to get to those most impoverished individuals
with the most money", in particular, in regards rural Alaska
"because that $250 is going to go probably as far as $120 in
an urban area". He explained that by taking the program to
175 percent of poverty with a $125 dollar payment, the
intent is "to get to the margins, to make sure there's no
one on the existing programs that is left out". He observed
that original version of HB 198 included an extension of the
Denali KidCare program at 175 percent. He felt that it was
reasonable parity to provide benefits to seniors at the same
level as those contained in Denali KidCare legislation (175
percent of poverty). He acknowledged the merit of concerns
regarding sustainability, but spoke in support of the
amendment.
12:31:14 PM
A roll call vote was taken on the motion.
IN FAVOR: Nelson, Gara, Crawford, Hawker, Joule
OPPOSED: Kelly, Stoltze, Thomas, Chenault, Meyer
Representative Foster was absent from the vote.
The MOTION FAILED (5-5).
12:32:39 PM
Representative Gara MOVED to ADOPT Amendment 3. Co-Chair
Meyer OBJECTED. Representative Gara explained that the
amendment would allow the commissioner of the Department of
Health and Social Services to make adjustments to the
monthly benefit for inflation if funds are available.
Actions by the governor would be subject to legislative
appropriation. The legislation does not allow the governor
or the legislature to adjust the benefit upwards if funds
are available without passage of authorizing legislation and
an accompanying appropriation. The monthly benefit would be
frozen without the passage of new legislation.
Co-Chair Chenault questioned where additional funds would be
found. Representative Gara stressed that the program would
work like any other appropriation. He spoke in support of
allowing the legislature the authority to increase the
benefit, without mandating an increase or leaving all the
power with the governor.
Representative Gara WITHDREW Amendment 3.
12:35:21 PM
Ms. Clark clarified that there are no cash payment programs
that have automatic inflation proofing, including APA.
Co-Chair Meyer reviewed the fiscal note.
Representative Hawker MOVED to report HCS CSSB 4 (FIN) out
of Committee with the accompanying fiscal note. There being
NO OBJECTION, it was so ordered.
HCS CSSB 4 was REPORTED out of Committee with an "amend"
recommendation and with a new fiscal note by the Department
of Health and Social Services.
ADJOURNMENT
The meeting was adjourned at 12:37 PM
| Document Name | Date/Time | Subjects |
|---|