House Labor and Commerce Committee hears testimony on the need to fix COVID-19 grant program
ANCHORAGE – Small business owners and economic development experts detailed a host of problems with the AK CARES Grant Program today during a hearing of the House Labor and Commerce Committee.
The program was established with funding provided to the State of Alaska for pandemic relief through the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. Eligible businesses can receive between $5,000 and $100,000 in grants through the program.
As of June 29, however, only 167 of 1,947 applications, 8.5 percent, have been approved. $6.3 million – just 2 percent of the available funding – is in the hands of Alaska businesses.
Four major problems were highlighted by testifiers:
1. Commercial fishermen are not eligible for relief because their permits do not qualify as business licenses.
2. Trade organizations and chambers of commerce are ineligible for relief as they are registered as 501(c)6 entities.
3. Due to the way grant guidelines were written by the administration, the Department of Community, Commerce, and Economic Development is unable to make even minor regulatory changes to get funding out in a timely fashion.
4. Businesses that previously received other pandemic relief funding from the federal government are still struggling to access AK CARES Act grants.
“I want to thank the dozens of Alaskans who testified about the need to remove bureaucratic barriers to AK CARES grant eligibility,” said Rep. Ivy Spohnholz (D-Anchorage), chair of the Labor and Commerce Committee. “They made a clear case for the Legislature and governor to quickly make the AK CARES Grant Program work better for Alaskan businesses, non-profits, trade associations, and commercial fishing operators hurt by the pandemic. We must act now.”
“Commercial fishermen are the backbone of our state’s most important industry and represent Alaska’s original small business,” added Rep. Louise Stutes (R-Kodiak), vice chair of the committee. “I am deeply distressed that CFEC permit holders are currently excluded from eligibility under the AK CARES small businesses grant program. These are small businesses by any measure, and we must address this issue swiftly to support this vital sector of our economy.”
Below are several comments made by Alaskans during the hearing. People who were unable to testify are welcome to email testimony to firstname.lastname@example.org.
“The rules don’t match up with the needs. Unless we plan on returning over $200 million to the federal government, we need to make changes now.”
– Tim Dillon, Kenai Peninsula Economic Development District
“While it’s a relief to have a cash cushion, what small businesses like ours need is not loans but grants.”
– Mandy Hawes, Owner, Get Lost Travel Vans
“What we’re facing is destruction of our economy, where nothing will be left standing if we do not take extraordinary steps to get the hundreds of millions of dollars sitting there inches away from helping.”
– Bill Popp, Executive Director, Anchorage Economic Development Corporation
“There are 609 fishing permits issued to Cordovans, which means over half of Cordova’s businesses are ineligible from AK CARES grants. Please include commercial fishermen for the AK CARES Grant program.”
– Chelsea Haisman, Executive Director, Cordova District Fishermen
“We live in a rural area, and we rely 100 percent on the cruise ships. We received some PPP funds, but it has run out. We urge the legislature to open up the AK CARES Grant program.”
– Stephanie Brenner, Owner, Brenner Fine Clothing and Gifts in Hoonah
“Many businesses will not survive. We’re not going to be made whole, and we’re not even asking to be. But we need to open up the restrictions on the AK CARES Grant program.”
– Debbie Speakman, Executive Director, Kenai Peninsula Tourism and Marketing Council
Alaska House Majority