As of September, 18,000 Alaska senior citizens no longer will be able to count on monthly longevity bonus payments from the state. The move will save the state an estimated $45 million and accounts for one-third of the governor's budget cuts.
"This program does not achieve, in my opinion, its original purpose of rewarding our pre-statehood pioneers," Gov. Frank Murkowski said Thursday in Anchorage.
Murkowski slashed $138 million from the budget, including $22 million in municipal revenue sharing and Safe Communities, a program that provides money for emergency departments, and $15 million in community matching grants for public-works projects.
In addition, agency heads helped cut $54 million from their departments by trimming budgets for individual programs, and eliminated $2 million in general fund appropriations to help certain departments pay off debt.
The longevity bonus cut doesn't come as a surprise. Murkowski proposed doing away with it several months ago. The Legislature created the longevity bonus in 1972 with the purpose of rewarding people who lived in Alaska during its territorial days and helped build the state. Since then, court action forced the state to include people who lived here for a shorter amount of time. The program began being phased out several years ago. Fewer than half of Alaska's 38,000 seniors receive the bonus of $100 to $250 per month.
The state will mail out three more rounds of checks - for June, July and August - before closing the program.
Murkowski said the state will try to alleviate the income loss for needy seniors by instituting a one-year program of $120 monthly payments for qualifying residents. Senior citizens will have to meet income qualifications for public assistance in order to receive the payments, which are being funded by a one-time $10 million federal grant to the Department of Health and Social Services.
"We're certainly sensitive to the needs of our seniors," the governor said.
But Marie Darlin, a Juneau representative for senior citizen advocacy group AARP, said it was unclear how many seniors who receive the bonus will qualify for public assistance.
"We're disappointed. We just hope the governor's safety nets are going to be there for those who need (them)," she said.
Kevin Ritchie, executive director of the Alaska Municipal League, said Murkowski's cuts in revenue sharing and other programs for local governments put municipalities in a tight spot.
"For one-third of our cities, (revenue sharing) constitutes 20 to 70 percent of their operating budget," he said.
Ritchie also said many communities depend on matching grants to obtain federal grant dollars.
"A number of communities are afraid they're going to lose significant amounts of federal funding because they're not going to be able to provide a match," he said.
The administration has said municipalities need to do their part to tighten the belt while the state tries to save money.
House Minority Leader Ethan Berkowitz, an Anchorage Democrat, said the governor lost credibility with citizens by cutting the longevity bonus program.
"It seems like his target on the budget was to hit a dollar amount, and when you put together a budget you try to do something to build a better state. I don't know how his cuts make Alaska a better place to live," Berkowitz said.
In the budget discussion, the administration has emphasized its desire to draw no more than $400 million from the Constitutional Budget Reserve, a savings account created by voters in 1990 that consists of one-time settlements from disputed oil and gas royalties and taxes. About $2.2 billion remains in the reserve. The governor has said he wants it to last five years, when he says the state will have developed natural resources to the extent that they start making money.
Murkowski's cuts result in a $380 million CBR draw.
"This is the first major step in disciplining Alaska to live within our means," Murkowski said.
Masha Herbst can be reached at firstname.lastname@example.org.