JUNEAU -- Some low income families that receive permanent fund dividend checks would temporarily lose public assistance under a bill passed in the Senate on Tuesday.
The bill removes a ''hold harmless'' provision that protects benefits paid to recipients of Alaska Temporary Assistance, Native Family Assistance and general relief assistance.
About 7,700 low income families would become ineligible for public assistance for at least a month under the bill, said officials with the state Department of Health and Social Services.
Senate Bill 340 passed the GOP-controlled Senate by a 12-7 vote despite the objection of Senate Democrats who argued that it was an attack on the state's poor.
''Many people we represent live on the edge of solvency and I believe (this bill) will push them over the edge,'' said Senate Minority Leader Johnny Ellis, D-Anchorage. ''Poor Alaskans will be poorer.''
Republicans backing the measure said it creates a disincentive for some to move to Alaska attracted by what they call the most generous welfare system in the nation.
''I think it's a commonsense thing that most people would not argue with,'' said Sen. Pete Kelly, R-Fairbanks. ''We're just saying the permanent fund dividend is not a sacred source of income.''
There are about 6,375 families enrolled under the Alaska Temporary Assistance Program receiving monthly cash assistance, said Jim Nordlund, director of the state's Division of Public Assistance.
Another 1,370 Alaska Native families are enrolled in Native Family Assistance Program, administered by three Native corporations through a state grant.
Under the program, a family of three with no other source of income would receive $923 per month, Nordlund said. The average monthly check for families is $675, he said.
Under the bill, the $1,850 each resident received in dividends would make families ineligible, Nordlund said.
The bill would also reduce the deduction in permanent fund checks that Alaskans receive from $27 to about $16, the state Department of Revenue said.
Sen. Randy Phillips, R-Eagle River, authored the bill. It is sponsored by the Senate Rules Committee, which Phillips chairs.
Phillips said the measure would free up about $4.6 million to be applied toward a $37 million increase in Medicaid. ''All I'm trying to do is lessen the blow on Medicaid,'' Phillips said.
Senate Democrats argued that this measure would exclude low income residents from sharing in the windfall of the state's oil riches that all residents receive.
Low income families have also used dividend checks to purchase reliable automobiles or pay debts that allow them to get off of public assistance, Democrats said. This measure jeopardizes their ability to get off of public assistance, Ellis said.
Ellis gave notice to reconsider his vote, which means the bill could come before the Senate again on Wednesday.
It then moves to the House for consideration.
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