Legislature close to finalizing relief spending, small business grant applications to open next week

The House vote to ratify Gov. Mike Dunleavy's requests to spend federal coronavirus relief money on May 19, 2020. (Screenshot from Gavel Alaska)

With the Legislature nearly complete with approving nearly $1 billion in coronavirus relief spending, state officials say they’re ready to start putting that money out as soon as possible.

The House voted today to approve the spending, which includes $568 million in direct payments to communities and $290 million for small businesses, and adjourned sine die from session. The Senate is expected to take up the House legislation on Wednesday to finalize the spending and bring the legislative session to a close.

Wednesday is the 121st day of the Legislative session, the longest legislators can be in session without additional votes.

Several legislators shared misgivings about the spending and as well as the process, which amounted to several weeks of infighting over returning to Juneau only to be forced into doing so by a lawsuit. Some wanted more definition to the programs while others sought increased direct help to Alaskans, including a supplemental PFD. That lawsuit is scheduled for a hearing on Wednesday but its backers say that a vote by the Legislature would likely satisfy their concerns.

Ultimately, the Legislature kept a lid on things and the body has been almost unilaterally focused on swiftly approving Gov. Mike Dunleavy’s proposals without amendments, citing the incredible need of local communities and small businesses. Altering the programs would require a new appropriations bill that could be a target for all kinds of political battles, including the dividend and veto replacements.

The approvals cover the following items:

  • $257 million to be paid to local governments through the existing community assistance program formula
  • $290 million in cash grants to qualifying small businesses
  • $311 million to be paid to local governments through a less-than-clear formula based on “economic activity metrics” collected by the state (this has been the source of the greatest controversy with the spending as it favors communities with sales taxes)
  • $100 million in federal authority for fisheries relief (though Alaska is only set to receive $50 million)

As for when the money will actually go out, Office of Management and Budget Director Neil Steininger told the Senate Finance Committee on Monday that payments to local communities could go out by Friday as long as the communities signed agreements that they’ll follow the federal guidelines for the spending by Wednesday.

The state’s prepared to move very quickly with the money after a month of having the money sitting in state coffers, according to a follow-up letter to the committee.

A grant program for small businesses, which will be run through Alaska-based Credit Union 1, is expected to begin taking applications from small businesses and nonprofits on Tuesday, May 26.

To be eligible for the cash grants, a business will have to have 50 or fewer employees and have not already received federal relief funding. The grants will range between $5,000 and $100,000 and the state estimates that the average need of the 5,000 to 7,000 businesses eligible businesses will be between about $30,000 and $50,000.

A minimum of 20% of the funding will go to businesses in communities with fewer than 5,000 residents

There’s a significant effort planned to get the information of the program out broadly to Alaska given fears of a repeat of the infamous federal Payroll Protection Program roll out where many small businesses were left in the cold after large, well-connected businesses quickly sucked up the initial round of funding.

“Connectivity, distance, or access to technical support should not disadvantage rural businesses in accessing this program,” explains the letter. “Recognizing the disparities in access to federal relief programs experienced in Alaska, this program has additional safeguards to make sure that funds are available to all Alaskans – especially rural and micro businesses.”

The plan meets concerns raised by Sen. Lyman Hoffman, D-Bethel, on Monday about disparity in access to the funds.

“It’s good and well to say it’s on a website but how do you get the advertisement out to all of the people of Alaska through different media, through radio, through television, through newspapers,” he said. “Many of these communities, many of these businesses are so tied up trying to make ends meet that the awareness of the funds may not be readily available to them because of the amount of time they’re just trying to keep above water.”

On the votes

Rep. David Eastman, R-Wasilla, was the lone vote against the measure in the House, arguing that the measure should have gone through a traditional bill process. Such a measure would have allowed the legislators to propose amendments, including for a supplemental dividend or veto restorations. Though the Senate still needs to pass the House version of the bill, the Senate had passed its version earlier in the day. Eagle River Republican Sen. Lora Reinbold, who refused to wear a mask or undergo health screenings before entering the capitol, voted against the Senate version.

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