JUNEAU - Lawmakers began hearings Wednesday to discuss restoring the state's longevity bonus, a system that made cash payments to Alaska senior citizens.
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Former Gov. Frank Murkowski killed the program four years ago, but Gov. Sarah Palin pledged to restore it. She hopes to fund the program with about $34 million.
"Many seniors have counted on longevity bonus when they made their retirement plans," Sen. Bill Wielechowski, D-Anchorage, said during a Health and Social Services committee hearing.
Wielechowski introduced the bill, which is designed to pay eligible seniors between $100 to $250 a month.
It may appear to be a nominal amount but it's enough that some fixed-income seniors won't have to choose between food or prescription drugs, supporters say.
"Many on fixed income relied on the government's promise and used the bonus for life's necessities,"' he said. "The longevity bonus money cycled through the economy at a high rate. It paid grocers, pharmacists, landlords."
The longevity bonus was instituted in 1972 to provide Alaskans 65 years old and older an incentive to continue living in the state.
The plan has since undergone several changes, most notably in 1993, when former Gov. Walter Hickel established a plan to phase out the program.
Hickel's plan ultimately created a tiered system that featured a payment range starting at $100 and reaching $250, depending on when seniors had enrolled.
But 10 years later, Murkowski cut the program by exercising his right to a line-item veto to the budget during a time of fiscal uncertainty.
It was a severe blow to many seniors, says Ann Secrest, spokeswoman for Alaska's AARP.
"This was not pocket change," Secrest said. "It represented a part of their budget: food, fuel, drugs.
"It was a real hit especially for those of lower income. To have that what you come to depend suddenly taken away was the shocker for many people."
If the program is restored, it could take effect for the 2008 fiscal year, which begins July 1.
Seniors must still meet certain criteria, including having been eligible at the time Murkowski eliminated the fund in June 2003. Additionally, they must apply before Jan. 1, 2008.
A similar bill in the House, sponsored by Rep. Bob Lynn, R-Anchorage, will be heard in the State Affairs committee today.