Friday in the Sun (July 3): The List edition

Friday in the Sun is here

Welcome to yet another edition of Friday in the Sun, our weekly column where we try to make sense of the week that was in Alaska political news, occasional rumor and infrequent gossip.

As always, discussing Alaska politics is best enjoyed as a recreational activity.

Have questions about whatever, comments about something, grammatical advice or tips? You can get ahold of your ever so humble editor at [email protected], find him on Twitter or shout it off the nearest mountain top.

Please, wear a mask, pet a dog, be kind and have a nice weekend.

So it’s come to this

If you need a clear picture of where Alaska is at with COVID-19, look no further than the list of exposure locations that discloses 19 different bars, restaurants and, yes, strip clubs that have confirmed extended visits from people who were infectious with COVID-19.

The most important takeaway from the list—besides that going out to eat, drink and get a lap dance in indoors spaces is still not a great idea—is that the latest surge in cases has so thoroughly overwhelmed the state’s city’s contact tracing ability that officials have ditched the business-friendly route of not publicly naming spots where infected people passed through. As for the state’s capacity, a news release from the state today said the state-run system is “strained” and is hurrying to expand its capacity.

Much to the frustration of anyone trying to understand how the disease was spreading in Alaska, public health officials had declined to name anything about where cases had spread (recall the brouhaha the state had over the first infection). They were contacting everyone who needed to know, officials said in response to questions about infection spots, and therefore could spare businesses of the potential damage of being named publicly.

That we’re at this spot with about 40 new cases per day (60 today)—with each case having potentially having orders of magnitude potential contacts than during lockdown—ought to be very alarming as those cases and their contacts continue to surge.

And though we’ve been seeing a surge, the truth of the matter is that Alaska was still on pretty good footing with the pandemic up until this point thanks to its ability to contact trace and its testing capacity. Only a small fraction of all tests are coming back positive, putting Alaska on a list of just four states that according to Harvard Global Health were doing enough testing to suppress the virus.

Now that contact tracing is so clearly hitting its limit, who really knows what’s next but it will likely mean that more people will not be notified they came into contact with someone infected with COVID-19, could be infected themselves and could be spreading COVID-19 to others.

Hey, it’s almost like masks usage and other measures to limit the spread of COVID-19 is an integral piece of reopening. Who could have possibly guessed that hundreds of public health workers and a team of economists keen on keeping the shaky recovery going knew what they were talking about?

Anchorage has implemented a mask mandate as of Monday and at least anecdotally it seems like people and businesses are taking it more seriously than in the past. And, yes, the mandate really lacks the teeth to go after each and every person who flaunts the mandate but it goes a very long way to normalizing mask usage.

Unfortunately, it’s going to be an uphill battle to overcome the politicization of masks but hopefully things will come under control before more extreme measures like another shutdown are required.

Note to myself

It’s “contact tracing” not “contract tracing.”

Shifting attitude

Because of course, Anchorage’s mask mandate kicked off yet another showdown with Republican Gov. Mike Dunleavy’s administration over the virus. Do the city’s public health orders extend to state-owned buildings? Can the state exempt them? Depends on who you ask, but we’re not putting a lot of money behind any legal opinions that come from Attorney General Kevin Clarkson’s Department of Law.

Anyways, the state has still not taken any firmer steps when it comes to public health orders like a mask mandate or potential closures for bars, but Republican Gov. Mike Dunleavy seems to be edging closer to public health mandates. Well, at the very least, he hasn’t staked firm opposition to them and said the state will give it a gander over the next few weeks.

Oh, and there’s this picture now:

Remember that Anchorage led the way on issuing a hunker-down order, and we wouldn’t be surprised to see an order coming from the state in the coming days or weeks, especially when faced with the limitations of contact tracing. The portion of tests that return positive spikes, ICU bed availability and ventilator capacity will likely be some of those key indicators, but given the lag between infection and displaying enough symptoms to warrant testing means things could already be well out of control.

We’ve heard that there are internal projections floating around the administration that estimate daily cases could exceed 100 or 200 by September, which honestly seems on the more optimistic side of things given where we’re at now (60 new cases reported today).

Several local governments have canceled Fourth of July celebrations as they teeter on the edge while right-wing groups continue to decry it as a liberal overreaction and celebrate people who’re pushing ahead with their own celebrations. Great. At least they’ll hopefully be outside, but you never know.

The shaky road to recovery is filled with potholes

I’ve had an interview with economist Mouhcine Guettabi floating around in my notebook for… way longer than I’d like to admit (surprise, writing a blog without an editor reminding me to hit deadlines or talk through a story is tricky!). But there’s some significant things to consider form a public policy perspective that I want to highlight:

  • Alaska was only just beginning emerging from its recession in 2019 and things were already shaky before the pandemic hit, wiping out the tourism season, taking a bite out of the Alaska Permanent Fund’s investments and driving oil prices down. The scope of the job losses seen in the shutdown has already exceeded what was lost during the recession and the question, now, is how many of those jobs will come back and stay back.
  • On a spending level, Alaskans may have lost their jobs but thanks to things like the enhanced unemployment benefits most people have maintained—or even increased—their spending capacity. Employment may have gone up, but generally speaking spending ability has not been majorly affected. That could all come crashing down with those benefits set to expire at the end of July unless extended by Congress where, surprise, Republicans have opposed it, claiming that it serves as a disincentive for people to work.
  • The expiration of the unemployment benefits will mean household spending will fall off a cliff if they’re not called back to work at a time when workplaces could be increasingly risky with COVID-19. And that’s assuming those businesses will be there.
  • This loss of spending could quickly pile up with the expiration of eviction protection at the end of June (It was supposed to be a “momentary glitch!”) and if business closures continue to mount (more on that below).
  • There’s also long-term structural things to consider as some people shift to an entirely at-home work life, which could have trickle-down impacts to the convenience economy: Think work lunches, clothing, transportation and real estate.
  • We didn’t really get into what the outlook may be for local governments, but that’s also likely to be significant. The state and local governments have the CARES Act funding to take some of the bite off of new costs, but it’s not going to (at least without changes on the federal end of things) make up for lost revenue and that’ll reverberate through budgets for years to come, leading to additional job losses and spending in the community.

There’s a wave of financial and economic problems starting to swell over Alaska and the size and scope of this wave is really yet to be seen. But the most pressing thing over the next month will be the question of continued federal financial assistance to those out of work.

“We’ve had this—call it an artificial boost to income, call it a really good support system for people that have been affected—that’s been a combination of state unemployment insurance, federal unemployment insurance and then, obviously, the economic impact payment that has cushioned the blow for a lot of the households that have lost jobs,” Guettabi said. “That’s expiring. My worry–in addition to the health component–is that we may be living in this artificially good period of time between now and July where the consumer is spending money, where people are going out because there’s pent-up demand and people have cash to spend because there’s been this support. If a lot of those households and people do not get called back to work between now and the end of July and we do not have another round of stimulus, then really incomes are going to fall off a cliff.”

Meanwhile, the White House’s latest plan to handle it is to suggest “We need to live with it.”

‘Go to Juneau now’

So, with all this economic pain, you’d assume the state would be hustling to get nearly $300 million in small business relief out to small businesses as soon as humanly possible, right? I mean, that was the messaging when Dunleavy and legislators rushed the program through the normal legislative process over warnings from Democrats that perhaps they should at least kick the tires on the program first.

The state had planned to disburse some $150 million to small businesses in the first 30 days of the Alaska CARES Act program. As of Wednesday’s House Labor and Commerce hearing, the state had distributed just $6,394,154.25 through its partnership with Credit Union 1. As always, the state has continued to promise that a quick fix to the program—whether it be loosening requirements (in a legally dubious way) or hiring additional grant processors—is just right around the corner but things are still not looking great.

The state and some legislative leadership have continued to refuse to admit that a more serious fix—the kind that would require a return to Juneau—is needed to salvage the program and help businesses in need. Exactly why that’s the case—whether it’s efforts to restore the vetoes or pay out a supplementary dividend—isn’t entirely clear but it’s likely a combination of all of the above but none of that really matters for the hundreds of businesses on the edge of closing for good, Tim Dillon, executive director of the Kenai Peninsula Economic Development District, told the committee.

Dillon outlined four changes that he says are needed to help get the bungled program back on track:

  • Allow commercial fishermen to apply for the grants. Currently, they’re barred from accessing them because the program, as written, requires a business license when they only have a permit and therefore locks all of them out of any state help.
  • Allow 501c(6)s (think chambers of commerce and local economic development organizations) to apply for the funding.
  • Allow businesses to apply for the grants regardless of what kind of federal funding they’ve already received. The way the program is currently written businesses are ineligible if they’ve received any federal aid. The state has tried to loosen this to $5,000 cap (which is facing a lawsuit) or allow businesses to return their federal aid and give it a go with the state program.
  • Give the Department of Commerce the authority to make minor changes to how the program is operated.

Dillion argued without those changes it’ll leave hundreds of millions of dollars in federal funding unspent and said the Legislature should have a role in updating the program.

“I get the fact that some of the legislators don’t want to go to Juneau because of other issues but if you care at all about this great state of Alaska you will go to Juneau now and pass this proposal because businesses and nonprofits cannot wait another 30, 60 or 90 days,” he said. “Fly in in the morning, get this taken care of and fly home that night. We will help you get it done.”

Flag fracas

A tipster hanging out at Lowe’s this week overheard this:

“Laddie and I spotted a new flag up on Flat Top Mountain right next to Laddie’s old glory. We were pretty sure some of those protestors had put up their flag up there next to Laddie’s. Laddie said he would throw their flag off the mountain but when we got up there it was jut an Alaska state flag blowin’ the wind. So that was OK and we went back down the mountain.”

Have a nice weekend and don’t mess with Rep. Laddie Shaw and his flag of potentially dubious legality.

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