Legislature(2003 - 2004)
05/17/2003 10:38 AM House FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 117(FIN) "An Act relating to the longevity bonus program; and providing for an effective date." JOHN VOWELL, DIRECTOR, LONGEVITY BONUS PROGRAMS, DEPARTMENT OF ADMINISTRATION provided information on the bill. Beginning in 2004, the bill would reduce the longevity bonus by 20 percent each year until 2007, until it is eliminated (2008). MARIE DARLIN, AMERICAN ASSOCIATION OF RETIRED PERSONS (AARP), JUNEAU TESTIFIED provided information regarding the legislation. She stated that she is a third generation Juneau resident and pointed out the Alaskan seniors provide support to the state's economy. She noted that the Pioneer's of Alaska worked on the current version of the bill. She stated that their preference was to have the program continue, but noted that Section 6 was a proposal arrived at to give people an opportunity to plan for the consequences of an elimination of the longevity bonus program. She noted that the bill provides for adult public assistance as proposed. She stated that if the bill were the best that could be provided for the seniors of Alaska, they would support it. She stressed the need for "safety nets" to help seniors meet their needs. She emphasized that most seniors did not foresee a way to meet their needs, particularly in the medical area. She stated the $250 per month for seniors 85 years old or older made a major impact. She concluded that this was a proposal at the request of the Governor's office, and that they awaited a response. CHIP WAGONER, PIONEERS OF ALASKA, testified about the proposed compromise devised by Pioneers and AARP in response to the Governor's original elimination of the longevity bonus program. He noted that the program was being eliminated 24 years earlier than projected. He commended these organizations for taking all state programs into account in crafting a proposal to provide a "soft landing" for seniors. He stated that to immediately eliminate the program would be cruel to seniors. He stated that the average age of a recipient was 78 years old. He stated that the basing the program on assets was not adequate, since seniors faced a variety of medical expenses not related to their income. They do not support a needs based program. Co-Chair Harris spoke to the history and origination of the program, and its natural phasing out. He asked what services are not provided in Alaska that are provided to seniors in other states. Ms. Darlin referred to public assistance programs, property tax assistance provided to seniors in other states. Co-Chair Williams referred to potential changes and stated that that the Administration was not supportive of a five- year phase out. He observed that the Governor might agree to a two-year phase out. He stated that the Committee would likely pass [a five year phase out], with the knowledge that the Governor may ultimately zero the program out of the budget. Co-Chair Williams clarified that a two-year phase out would reduce payments by 50 percent ($22 million), and then cease payments in the following year. He stated that the payments would continue at some level for FY 04 and FY 05. He reiterated that the Governor would support a two-year phase out. LENORE JONESS, KENAI, testified via teleconference in opposition to the legislation. She noted that the program could be funded from the tax break that the Governor has proposed for the oil industry. She also opposed changing to a needs based program. She questioned the legislature's concern for seniors in this regard and also in terms of the sales tax. She maintained that the State was taking advantage of seniors since they did not generate income. She noted that senior retirement income and medical payments had an impact on the state's economy. She referred to a study [not cited], which concluded that Alaska seniors are one of the largest single sources of money flowing into the state. Senior retirement income and medical payments have a significant beneficial effect on the state's economy. At the same time more than half of Alaskan seniors live vicariously on the edge of solvency. For some, financial considerations may determine whether they continue to reside in the state. For many others, a combination of financial benefits available from state and municipal government is critical to their wellbeing. Seniors also provide the equivalent of 2,400 full time jobs as volunteers, worth approximately $60 million a year. Seniors over 60 provide unpaid care giving services that are the equivalent of 6,300 full time jobs. Seniors over 60 make up 8 percent of the state's population. Seniors are estimated to make up 20 percent of the state's population by 2025. CSSB 117 (FIN) HELD in Committee for further consideration.