PFDs may curb welfare checks

Bill would cut benefits for 5,100 families

Posted: Wednesday, April 17, 2002

Low-income Alaskans temporarily could lose access to financial assistance from the state under a bill passed by the Senate on Tuesday.

Senate Bill 340 would direct state agencies to consider permanent fund dividends a source of income when determining eligibility for financial assistance.

The measure would make many applicants for welfare, food stamps and other programs ineligible when permanent fund dividend checks are distributed in October. Programs that aid mentally and physically disabled people would not be affected by the bill.

The Division of Public Assistance opposes the bill, noting that about 5,100 families across the state will lose Alaska Temporary Assistance Program benefits for October and any additional month in which the receipt of PFD checks puts them over asset limits.

Angela Salerno, legislative liaison for the agency, said the bill could affect 374 Tlingit or Haida Natives who receive assistance and 159 people living in Juneau and Douglas.

Minority Democrats argued on the Senate floor Tuesday that the bill deprives poor Alaskans of the benefits of the permanent fund.

Labor Committee Chairman Sen. Randy Phillips, author of the proposal, said the $5 million generated from the bill will be used to help fund a $37 million gap in the state's Medicaid program. Phillips, an Eagle River Republican, argued that many who will become ineligible for state assistance under the bill will get the money back through Medicaid benefits.

Phillips said he was urged by constituents who argued they were already paying money as part of their federal income taxes to assist the poor.

Senate Minority Leader Johnny Ellis called the bill "extremely unfair" and said low-income Alaskans should not be punished for receiving PFD checks.

"This bill today represents not just a negative impact on low-income Alaskans but a real attack on the philosophy and genuine fairness and equality of the Permanent Fund Dividend Program," he said, noting the program was created to benefit all Alaskans.

Ellis likened the proposed bill to laws that prevent criminals from receiving PFD checks.

Senate Finance Co-Chairman Pete Kelly said welfare reform has been successful but has not gone far enough.

Kelly, a Fairbanks Republican, said private discussions with public assistance agencies revealed that the promise of PFD checks draws low-income people to the state and increases enrollment in welfare programs.

But Salerno said the Division of Public Assistance disagrees.

She said a 1993 study by the state Department of Labor found that most people with low incomes move to the state to be closer to family.

Statements released by the agency say:

• 1,400 Native families will lose nearly $1 million in family assistance programs.

• About 40 percent of adults in ATAP families will have all or part of their PFD checks garnished to pay debts.

• 125 General Relief Assistance recipients will lose benefits that help cover emergency rental and utility payments and indigent funeral and burial expenses.

The bill passed the Senate 12-7 Tuesday and was scheduled to be reconsidered today. If approved, it will move on to the House.

Timothy Inklebarger can be reached at

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