State of Alaska receives $1.25B in federal COVID-19 relief

The State of Alaska has officially received

$1.25 billion in federal coronavirus relief

but questions are still being raised about how it can be spent.

On Tuesday, Gov. Mike Dunleavy made a formal request for the Legislative Budget and Audit Committee to begin spending the funds before the end of the month:

$562.5 million for local communities. Ranges from $75,000 to the smallest villages, up to $156 million for Anchorage
$300 million to bolster existing loan programs to help fund small businesses
$337.5 million for coronavirus-related health care costs
$50 million for nonprofits to help, among other things, food banks and emergency shelters

The legislature’s top attorney has suggested that lawmakers

may need to reconvene

to ensure all the appropriations are legal and above board.

Anchorage Democratic Rep. Chris Tuck, the co-chair of LB&A, says the Revised Program Legislative (RPL) process requested by the governor may not be sufficient. The concern is that specific appropriations may need to be approved by the Legislature or Alaska could be made to pay the federal government back.

“You can’t just fund whatever you want to fund,” Tuck said. “We have to be very careful that we’re following the guidelines as set out by the federal government.”

The governor had intended to use federal aid to replace a

“majority” of the vetoes

he made to the operating budget for the next fiscal year. Some of the cuts Dunleavy made appear set to stand.

The governor’s office released a statement Wednesday afternoon:

On April 7, the State’s budget was signed into law and line item vetoes were made to save dwindling state revenues. With rapidly shrinking state and municipal revenue, concurrent discussions were occurring between the federal government and states regarding funding assistance to offset expenses made by state and local government to deal with the pandemic, including revenue shortfalls. Early discussions indicated CARES funding would be available for this purpose. When I publicly stated CARES funding could be used to replace state funding, I was working with the best available information at the time which led many to believe CARES act funding could in fact be used to offset revenue loss. Today, there continues to be a lack of clarity as to whether the use of CARES act funds can be used to backfill lost revenue as a result of the pandemic. As a result, we will operate under the guidelines that CARES act funding can be used to mitigate the impact of the pandemic on state/municipal expenses and to support businesses and the State’s nonprofits.