By Gretchen Wehmhoff
The federal government allocated funds to states through the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act) in April. Different states received varying amounts. Alaska and other lower population states received the minimum amount of $1.25 billion to use towards the COVID-19 impact.
In determining the distribution of the funds, the state, through the governor’s office, and with appropriation approval of the legislature, allocated CARES Act funding to four major areas and amounts: Direct Municipal Relief ($562.5 million), Small Business Relief ($300 million), Health – Non-Profit Support ($50 million), Health – Health-Related COVID-19 Costs ($337.5 million).
Communities received different amounts based on perceived economic impact. (See the entire list of funds distributed to Alaska communities HERE.) Skagway received $7.4 million in direct municipal relief.
As Skagway struggles with the best way to distribute the municipal relief funds, the designated Small Business Relief is available to local businesses.
In the process, $10 million of the Small Business Relief was reallocated by the state to address COVID-19 impacts to homelessness around the state, leaving $290 million for loans of $5,000 to $100,000 for businesses with fewer than 50 employees.
Rep. Sara Hannan, (D) Juneau, said the fact that Skagway’s main economic driver, the cruise ship industry, is gone makes Skagway a “poster child” for the funding programs.
Sen. Jessie Kiehl (D) Juneau, said that 20 percent of the small business program is reserved for populations under 5,000.
Rep. Garen Tarr (D) Anchorage, clarified that if a person has applied for PPP or EIDL and not yet received any funds, they should try for the CARES Act funding.
Tarr said even though the legislature returned to session to vote for the appropriation, it doesn’t mean there weren’t conversations. She said there were 13 committee meetings in the process to work through the list.
She has concerns that smaller businesses without full time accounting staff may be at a disadvantage when it comes to speed. However, the initial application being processed by Credit Union 1 should only take a few minutes.
Businesses who have already applied and received funds through the original Payroll Protection Program (PPP) or the Economic Injury Disaster Loans (EIDL) are currently not eligible for the new CARES Act funding.
Hannan acknowledged that businesses that followed the rules for the original PPP and EIDL funds were caught by surprise with rule changes or reallocation due to dried up funds. She urges businesses to apply even if they already applied for PPP and/or EID. Hannon reasons that if rules or conditions change, they will be prepared. In the worst case, a business might be denied.
Kiehl cautioned “the needs exceed the cash,” noting that the tourism industry brings in $4 billion to the state, far more than the total $1.25 billion in the CARES Act.
“There are going to be gaps,” Keihl said.
The Department of Commerce, Community and Economic Development (DCCED) and the Alaska Industrial Development Export Authority (AIDEA) Is working with Credit Union 1 to process the applications and funds. (Apply for an Alaska CARES Grant HERE.)