Rep. Adam Wool's Update: End of Session and Legislature Approves CARES Act Federal Relief Funding
Friends, Neighbors, and Fellow Fairbanksans,
Well, we did it. We finally ended this session of the 31st Alaska State Legislature with an adjournment of the House on Tuesday, May 19th and the full legislature on Wednesday, May 20th. At first, it seemed as if the legislature would not need to convene in Juneau to disperse the $1.25B in federal funds that came to us from the CARES act passed by Congress. We used a mechanism called the RPL process (Revised Program Legislative) which would have allowed us to disperse funds without an appropriation bill. The Legislative Budget & Audit Committee may oversee this process to act as the full legislative body when the full legislature is not in session. However, we were technically in session and a lawsuit was filed that compelled us to show up in Juneau for a few days prior to the 120-day constitutional limit in order to get relief funds out to communities quickly.
We gathered in Juneau and swiftly passed a bill that authorized the executive branch to disperse the relief funds using the RPL process leaving no ambiguity as to the validity of the process. We were not able to adjust any disbursement amounts, but because we had several hearings in committee, we were able to work with the Governor’s office to make some important changes to several of the amounts and conditions. For example, the funds to help small businesses changed from a loan program to a grant program. Some of the amounts to communities were slightly altered, which helped our community of Fairbanks a bit, even though we may not be getting as much per capita as other similar communities, such as the Mat-Su borough. The Governor’s office and the Office of Management and Budget gave various explanations for this imbalance but in the end it was unclear. It appears that communities with sales taxes did receive a bit more per capita than communities without sales taxes in these calculations. There are other additional factors as well that I won’t get into right now.
At the end of the day, Fairbanks which includes the Borough, the city of Fairbanks, and the city of North Pole, will get around $40M in coronavirus related aid. This money will need to be spent on direct coronavirus related expenses. Fairbanks will receive the money in 3 payments, and we will have to spend 80% of one payment to receive the next payment. All expenses will have to be incurred before December 31 of 2020 and if we spend money on non-approved expenditures, we will have to pay back the Federal Government. Right now, we don’t have a large amount of direct Covid-19 related expenses but we are hopeful that the Federal guidelines will be expanded so that we can spend these funds on secondary impacts such as declining revenue, healthcare lost revenue (primarily FMH), business loses, etc.
These are very difficult and trying times and there are a lot of unknowns. Many businesses are having a very difficult time, and sadly many will close. We are fortunate in Fairbanks that many individuals in our community work for government entities and as of now, their employment is fairly secure. I am referring of course to many of our military members, city, borough, state, and federal government employees, school district, and University employees. Eielson is ramping up due to the incoming F-35’s, construction season is upon us and there are various DOT projects starting up, so in some ways we’re doing OK. Our hospital has taken a financial hit because elective surgeries were put on hold and many people were avoiding healthcare due to possible Covid-19 exposure. Our University which has seen significant budget cuts over the past few years, is suffering due to the forced closure related to the pandemic. It is estimated that the University will suffer an additional $40M in lost revenue due to declining enrollment and other expenses. I’m hoping that they will be able to open next year to classroom instruction and on-campus living. Luckily, the military bases will continue to go strong as will our regional mines.
The main takeaway for Fairbanks and for Alaska is that so far, we have avoided a large coronavirus outbreak and subsequent health impacts, the effects we are dealing with are primarily economic. This will be a significant and prolonged, but at least our healthcare system did not get overrun and many of our citizens did not get sick. As the summer season progresses and different groups start to come to Alaska, that may change so we must stay vigilant. The tourist season has been severely reduced which is catastrophic for many businesses but at the same time it is fortunate in some ways not to have an influx of people from infected areas that could potentially change the safety level we’re currently experiencing. It is a tough balance and some of these decisions are being made outside of our control. For example, the cruise ships are cancelling most of their cruises to Alaska this year and many hotels are not going to open. Hopefully, we can get through this season be ready for the winter tourist season.
Let us all try to keep a positive attitude and let’s also try to comply with the guidelines that we’ve be following so well. Businesses are now open at greater capacity, so restaurants, bars and theaters are open, and people are going out more often. Let’s make sure to keep our distance and wear masks when in public places to protect others and to be respectful. If we can prevent an uptick in cases, we can keep businesses open and the economy will start to recover. Fairbanks is a great place to be in the summer and it’s a great place to be outdoors. We are so fortunate to have a lot of open space to recreate and to enjoy the splendor of Alaska. This may be the summer to explore Alaska in new ways and help those businesses that are suffering due to the lack of tourism. Let’s take advantage of the cheap gas and drive around a bit and see our wonderful State!
Self-Employed and Gig Economy Workers Receive Federal Assistance
Last Friday, assistance for self-employed workers, including individuals employed in the gig economy (for example Uber and Lyft drivers) began to go out to workers. This represents another important step towards getting financial assistance to Alaskans during the COVID-19 pandemic, and will help these workers to somewhat compensate for the loss of tourism and regular business revenue they rely on. Claims can be filed at myalaska.gov under the Unemployment Insurance Benefits tab and can take up to two weeks to be processed, so apply as soon as possible if your income has been affected by the shutdowns.
Also note that that you are able to earn $50 weekly without this income detracting from your benefits check. Each dollar you earn above $50 leads to a reduction by $0.75 from the benefits check. This means that workers can still earn money while receiving benefits, so long as you report the wages (including tips, commissions, stipends, or other sources of income) to the unemployment office.
How to check on your Pandemic Unemployment Assistance benefits:
Fairbanks (907) 451-2871
Anchorage (907) 269-4700
Juneau (907) 465-5552
Other Areas (888) 252-2557
Small Business Loans Coming to Fairbanks- How You Can Apply
In response to the pandemic and the disaster declaration, The AK CARES Funding Program was created to provide emergency relief grants between $5,000 and $100,000 to small businesses (fewer than 50 Full-Time employees) that were unable to receive support from federal funding made available by the CARES Act such as SBA loans, PPP loans, EIDL, or other federal CARES Act funding.
This program is also setting aside 20% of funds to help support Alaska businesses in rural and remote communities with fewer than 5,000 residents. Applications can be found at Credit Union One’s website starting on June 1st, 2020. A full list of eligibility requirements, qualifying expenses, and frequently asked questions can be found here at the Department of Commerce’s website.
These funds can be used for expenses such as payroll costs, short term debt, rent or mortgage payments, utility payments, purchase of personal protective equipment, business related equipment, and other expenses related to inventory and re-opening.
Prior to the program launch date, businesses interested in applying for an AK CARES grant should review the checklist and begin gathering the necessary information to support the business' eligible expenses.
Thank you to everyone in our community for your continued patience and resilience as we work to re-open Alaska's economy while best protecting public health. Please continue to wear a mask in public places and maintain the 6 feet of social distance that best protects yourself and others from the virus as we work towards getting small businesses back up and running. Enjoy these bright summer days we have ahead, and please feel free to reach out if my office can be of assistance to you.