Nearly three months since the launch of the state’s badly underperforming small business relief program, the Legislature’s Budget and Audit Committee today approved requests made late last week by Gov. Mike Dunleavy to expand eligibility for the program.
While some legislators refused to look back at months of money trickling out to in-need businesses, several House Democrats were fiery in their assessment the Dunleavy administration’s apparently lackadaisical approach to fixing the program. They sought answers to why the administration had only now offered changes to fix problems that were apparent just weeks after the program launched.
The changes approved today would completely lift limits on how much federal aid small businesses could have received in order to be eligible for the state program. The program launched in June with a blanket ban on businesses that had received any federal aid and that was later raised to $5,000. During that time, the state told businesses that had received federal money and wanted to take advantage of the state program—which makes businesses eligible for between $5,000 and $100,000 in grants—to return the federal money.
Anchorage Democratic Reps. Andy Josephson, Ivy Spohnholz and Chris Tuck (who chairs the committee), were particularly pointed in criticizing the administration’s handling of the program, especially when they, small businesses and economic development leaders had laid out a roadmap to revise the program months ago.
“What’s not being talked about and what’s just astonishing to me is that my chamber, the House, had some 30 committee hearings starting between May 21 and today, the 27th of August. This news about the problem with the small business program is like telling me there’s forest fires in California going on. Of course, everyone knows that! I don’t, for the life of me, understand why the administration didn’t know what everyone in this room knew,” he said. “It’s been reported in the media countless times, there have been hearings—there were hearings held by Rep. Spohnholz just to hear public testimony with the very concerns the administration is bringing forward. That’s the historical record. … I have no idea why they didn’t do this June 15 because we knew then. I don’t get it.”
Rep. Tuck argued that the administration didn’t even need the Legislature’s approval to amend the program following a lawsuit that already allowed the administration to make a prior set of changes without legislative approval due to the pandemic.
“The superior court judge has determined the administration could have done this all along,” Tuck said, later adding, “We’re in a box right now … this has been a tortured process of getting money out to businesses that need it. It should not have taken this long; it really shouldn’t have.”
With a lack of answers about the timing of the revisions, Rep. Spohnholz said “It’s a scapegoat for bad execution.”
Republicans were generally more effusive about the administration’s handling of the program, thanking the governor for the much-needed fixes. They bemoaned the criticism as needless finger pointing when action should be focused on saving the state’s economy.
While those Democrats brought up legal concerns with the measure, they ultimately lifted their objections to the process and allowed all the proposed changes to go through.
According to a statement from the governor’s office, the changes will go into effect on Monday, Aug. 31.
Why’d you do this, Ben? It has your odor all over it.