Senior citizens groups have agreed to a five-year phase-out of the Longevity Bonus Program. The Senate Finance Committee approved a bill Tuesday incorporating the change.
Marie Darlin of AARP in Juneau says the senior citizens group and the Pioneers of Alaska came up with the proposal as an alternative to losing the bonuses entirely this year or having the program become based on need.
The senior groups' plan calls for the bonuses to be reduced by 20 percent a year until the program ends in the 2007 fiscal year.
"It's one of those bills where you hold your nose and support it," said Pat Luby, associate director for advocacy for AARP in Alaska. "This at least gives people a chance to prepare."
Gov. Frank Murkowski had proposed eliminating the program altogether in the 2004 fiscal year, which starts in July. That would have saved $44 million, state officials estimate.
An alternative proposal by Senate President Gene Therriault's office would have allowed the monthly bonuses only for low-income seniors.
That would have cut off the monthly payments to single seniors making more than $16,824 a year, or couples making more than $22,716. A single adult could have had assets, such as a savings account, of up to $4,000, and a couple could have had assets of $6,000. Alaska Permanent Fund dividends and some other sources of income would not have been counted.
Currently there is no limit on the amount of money an older Alaskan can make and still receive monthly payments, which range up to $250 depending on when people turned 65. Several years ago, legislators decided to phase out the payments, but grandfathered in seniors living in Alaska who turned 65 by 1996.
Darlin said many seniors objected to the need-based proposal, in part because they did not like the idea of receiving what they perceived as welfare. Also, the income level was so low that some seniors who need the bonuses to pay for prescription drugs and other needs would not have qualified, she said.
Darlin said the governor's office told seniors they needed to come up with some options of their own if they did not like those proposals.
They were aware that even if they convinced legislators to save the program in its current form, Murkowski could veto the funding for it, she said.
"You have to be realistic," Darlin said.
It's not clear whether what they've come up with will satisfy Murkowski. The governor's spokesman, John Manly, said Tuesday he had not heard about the seniors' proposal.