House continues push for answers on CARES program and workplace safety

(Photo by Matt Buxton/TMS)

Three House committees will continue their push for answers and action from the Gov. Mike Dunleavy administration’s over its handling of a badly underperforming small business relief program as well as COVID-19 safety in the state’s high-risk facilities.

While most of the rest of the Legislature has shut down business during the interim, the House Labor and Commerce, State Affairs and Health and Social Services committees have continued to regularly meet in an effort to provide oversight on the administration’s handling of COVID-19.

First up at 2 p.m. Tuesday is the House Labor and Commerce’s hearing on the Alaska CARES Act, where chair Rep. Ivy Spohnholz said they’ll be hearing from the Department of Commerce, the Alaska Industrial Development and Export Authority and Credit Union 1.

The program has failed to meet even the administration’s expectations of putting as much as $150 million out in the first month of the program. A month in, and the program had distributed less than $7 million. That number stood at $8.9 million as of last week.

“Implementation of the AK CARES small business and nonprofit relief program has been botched at every point,” Spohnholz said after last week’s hearing from businesses. “The program is too restrictive, meaning thousands of struggling businesses aren’t eligible despite incredible need. To make matters worse, after 40 days, only 11 percent of the 2,154 organizations to apply have been approved. At this rate, it will be next year before many applications are processed. Alaska’s small businesses and nonprofits are struggling and urgently need our help to keep their doors open.”

The administration announced last month it would be loosening restrictions on the programs, allowing businesses that had already received as much as $5,000 in federal aid to apply. That expansion was hit with a legal challenge but survived an effort to put it to an immediate halt. The challengers raised concerns that the “lawless” expansion would create a standards-free approach to distributing public funds.

Several businesses have testified to the House Labor and Commerce Committee about the challenges the program’s requirements as well as the program’s slow response time, with some businesses testifying they had gone more than a month without a response back on their application.

While the administration’s plan to lift the threshold to $5,000, business leaders have called for sweeping changes to salvage the program and get hundreds of millions of federal dollars to businesses in need. They’ve called for completely lifting the program’s limits on federal aid, allow economic develop groups to obtain grants, give the administration greater flexibility to make changes and allow commercial fishermen with fishing permits eligible for the program.

Those changes would likely require the Legislature to return to session to pass new laws, something that several other legislators with contentious primaries have shied away from out of fear that a divisive and politically bruising fight over the dividend could be stirred up.

While the House Labor and Commerce Committee will be hearing from the administration, that doesn’t appear like it will be the case for the joint hearing between the House Health and Social Services and State Affairs committees at 10 a.m. Wednesday.

State Affair Committee Chair Rep. Zack Fields, D-Anchorage, said today that at this point the administration does not intend to attend the hearing. When asked why, he pointed to week’s hearing where the state’s workplace safety regulators admitted they had not been involved in any way with the state’s reopening.

“When they tell the truth, it looks bad,” he said.

Fields and Health and Social Services Committee Chair Tiffany Zulkosky have been critical of the administration’s handling of workplace safety and have both called on the administration to take a more proactive role in limiting the spread of COVID-19, noting that it’s good for both public health and the economy.

The state has seen a massive surge in new cases since lifting public health orders that shut down businesses and closed restaurants. Like other states, much of the outbreaks have seemed to focus around bars and restaurants and with younger Alaskans. On Sunday, the state reported its highest single-day of new cases with 116 resident and non-resident cases.

Though Alaska’s Chief Medical Officer Anne Zink has raised concerns about the state “moving the wrong direction,” urging Alaskans to work from home, avoid entering buildings unnecessarily, always wear a mask, socially distance and avoid carpooling, the state has so far refused to implement any additional public health orders.

Fields said the evidence supports acting now and he said these hearings are an effort to get that message across to the administration and state regulators.

“It seems to me that we have to keep hammering, but that’s why you have these oversight hearings,” he said.

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