In 1970, while debating creation of the Longevity Bonus, opponents charged the new program was financially dangerous because no one knew its future costs. Supporters pointed to the windfalls headed Alaska's way due to the discovery of Prudhoe Bay and stated that limiting the bonus recipients to true pioneers who lived in Alaska prior to statehood would control the expense. Besides, Democratic House leadership said, "if in 15 or 25 years it becomes too expensive, like any other law it can be repealed." Critics lamented what a cruel hoax that would be on Alaska's pioneers.
Unfortunately, the U.S. Supreme Court ruled the original program unconstitutional in 1984 and, with the state awash in oil dollars at that time, the Legislature threw participation open to anyone over the age of 65. Once again the Legislature and governor chose to ignore the long-term cost of the program and the yearly expense shot over $73 million by 1995 with projections topping $100 million before the end of the decade. Although steps were taken in 1994 to close the program to new entrants, the estimated cost of the program remained high at roughly $400 million.
Last year, the new administration reviewed all programs and determined that the bonus no longer accomplished its original intent of honoring true Alaska pioneers. While many participants were residents prior to 1959, thousands of others were relatively new to the state when they became eligible. In addition, monthly checks were being mailed to some Alaskans with comfortable retirement income while other low-income seniors received nothing. In effect, the program had changed to unfairly create two classes of seniors in Alaska.
For these reasons, the governor proposed discontinuing the Longevity Bonus in March 2003. While some legislators reluctantly understood the governor's reasoning, they had practical concerns about seniors who had become financially dependent on the program. The governor was open to ideas and willing to allow its continuation if the Legislature created a new revenue source, eliminated funding in other areas of the budget or identified an affordable alternative.
Within these constraints, the Senate Majority forwarded a proposal to preserve the bonus for low-income seniors. Seniors that met certain income and asset criteria would continue to receive the monthly payments. The governor was supportive, but senior organizations around the state were not.
As an alternative, the Senate leadership worked with representatives from the Pioneers of Alaska and the Alaska chapter of the American Association of Retired Persons (AARP) to draft a four-year phase-out approach. However, when the measure reached the floor, not one Democrat voted for it. It is now clear why - despite their hand wringing, Democrats welcomed the governor's veto. They saw an opportunity to win political points with misinformation rather than working toward a solution that would benefit low-income seniors.
As the end of the legislative session approached, Democrat votes were not available for the revenue measures or budget cuts that would provide funding to pay for the existing bonus program or any compromise plan.
Now, despite their efforts to block meaningful discussion on how to modify the bonus program or cover the cost of the status quo, Democrats have been beating the drum to tell everyone how concerned they are for the seniors. All the while they are winking and nodding at each other in delight at their success in creating a political issue to grandstand on.
The Senate Majority has continued to work with the administration to explore affordable options to assist low-income seniors and would welcome meaningful Democrat participation. Unfortunately, their recent press releases announcing the introduction of legislation to restart the previous bonus program indicate they are not willing to do that. When confronted with the $400 million cost for their legislation, perhaps they will once again say if "it becomes too expensive, like any other law it can be repealed."
Gene Therriault is president of the Alaska State Senate.
Juneau Empire ©2014. All Rights Reserved.