Alaska editorial: Despite its popularity, longevity bonus should not be reinstated

Posted: Monday, February 05, 2007

The following editorial first appeared in The Voice of the Times:

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It would be a serious blunder to breathe life into the longevity bonus program that was killed in 2003 as the state faced a rising tide of red ink. It simply would be better to let sleeping dogs lie.

The popular program was established in 1973 to give $100 monthly to all Alaskans 65 or older who lived here on or before Jan. 3, 1959, and who had maintained a continuous "residence domicile" in the territory or state for 25 years. The idea was to keep Alaska's pioneers in the state.

Over the years, the bonus creeped up to $250 a month. In 1984, a Superior Court ruled the program's residency requirement unconstitutional. The Legislature cut it to one year. The program's cost that year, before the relaxed residency, was $29.1 million. The next year, it soared to $42 million. By 1992, it was $63 million a year, and new applicants were getting smaller and smaller payments. In 1993, the cost was $66.6 million; in 1996, the last year one could apply, it cost $73.2 million. When it was killed by a Gov. Frank Murkowski veto in 2003, it was costing $47.9 million.

Gov. Sarah Palin, who professes a desire to cut $150 million in state spending, has included money in her budget to reinstitute the program. The cost? About $32 million, and she wants to fully fund SeniorCare, the need-based program that replaced the bonus, at about $13 million.

How would the $45 million in programs be implemented? Who would be eligible? If only the original bonus recipients were eligible, those who applied before Dec. 31, 1996, could we not expect a raft of lawsuits from those left out? There are, after all, thousands of Alaskans who were denied the bonus.

Had the bonus program survived, it was estimated there would have been 14,000 monthly recipients nowadays, at a cost of $35.2 million, about what Palin plans on paying, and it pretty much would have played out by 2031. But Murkowski changed all that, and he was right. Let him be the bad guy and let's move on.

Despite its importance to some recipients, the program was lousy public policy. It was redistribution of wealth based on whim. It was free money. Reimplementing it now only compounds that, and makes for even worse public policy. What will happen if money gets tight again? And it will.

It is wonderful that some, like Palin, want to help the elderly, but government has no money. Somebody must pay for all that largesse, and too often lawmakers and bureaucrats, thinking with their hearts, are blind to the consequences of their actions. That's how a $2.5 million bonus program in 1973 burgeoned to a $73 million bottomless pit in 1996.

The lesson of all that has not been taken to heart. Nothing good can come from reinstituting the longevity bonus.

It was, and is, like the Permanent Fund dividend, a bad idea.



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