The Kenai Peninsula wasn’t immune to some of the chaos that came with the federal government’s Tuesday announcement of a temporary freeze on federal grant funds. A judge delayed implementation of the freeze later that day, and the White House rescinded its initial announcement on Wednesday — but the fate of the freeze remains unclear. Some people on the peninsula whose organizations get federal funding say they’re relieved for now, but they’re staying vigilant about what could be coming next.
Soldotna City Manager Janette Bower learned about the temporary federal funding freeze from the city’s lobbyists in Washington. They’re four hours ahead.
“When I first got up that morning – I always check my email right away – and I checked my email and saw that, and then the communication back and forth started between them and us,” she said.
It all started with a memo from the federal Office of Management and Budget announcing a temporary freeze on federal grant money. The administration said the freeze was meant to buy time to ensure that federal spending aligns with President Donald Trump’s recent slew of executive orders.
In Alaska, where more than half of state revenue in 2022 came from federal sources, the announcement unleashed a wave of confusion.
When Bower heard the news, one city project sprang to mind – the Soldotna Field House.
Construction on the multi-purpose sports facility is well underway. The city broke ground on the project over a year ago, thanks in no small part to a $1 million grant from the U.S. Department of Agriculture. Bower says that department’s already given the city permission to spend some of the money on flooring.
“I did reach out to USDA, and they still felt that the funding would have been okay,” she said. “It would have arrived in the Alaska account, just the time frame was uncertain.”
In the wake of the freeze announcement, Bower says city officials met to figure out what other projects could be affected. They identified roughly $3.5 million in federal grants across seven city projects, including the field house.
There’s roughly $400,000 from the Federal Aviation Administration to rehab an airport runway, almost $2 million from the Environmental Protection Agency for the city’s wastewater treatment plan and about $700 in reimbursements for bullet-proof vests for the police department.
Bower said the last 24 hours have been “a whirlwind,” but for now the city is taking things as they come.
“Just like when the pandemic happened, we never thought we'd have a pandemic,” she said. “So you know, just now that this has happened, okay, then what will we do going forward?”
Dr. Wei Ying Wong also heard about the freeze from lobbyists. She’s the CEO of the Alaska SeaLife Center in Seward. She said she wasn’t totally surprised when she got the news.
“There’s been a lot of conversations among leaders as to what is going to happen under this new administration, given our focus on science and climate change issues – what that was going to look like,” she said. “We knew something was going to happen … (were) hoping that it wouldn’t be so quickly and so harshly.”
Wong estimates 10% of the SeaLife Center’s annual operating budget comes from federal sources. The National Oceanic and Atmospheric Administration’s Prescott Grant, for example, funds their Wildlife Response Program – the only one of its kind in the state. NOAA also funds the center’s Chiswell program, long-term sea lion monitoring program and other miscellaneous research projects.
Wong says the center was already working to mix up where it gets money. She says it’s generally smart for a nonprofit not to put all of its financial eggs in one basket.
“My staff was accusing me of banker talk,” she said. “But basically this means we want funding sources that are varied, right? So that you are not particularly vulnerable or at risk if one should dry up for whatever reason.”
Like Bower in Soldotna, Wong likened the federal freeze to the impacts of the COVID-19 pandemic. The SeaLife Center benefits from Seward’s cruise ship tourism. When that dried up, it hurt their bottom line.
“The lesson that we had taken from that, and also since then, is really to think about – how do we actually create stable funding sources so that if one should be taken away, or that is something in jeopardy, we are not immediately vulnerable?” she said.
Since the memo was rescinded, Wong says SeaLife Center staff are relieved to no longer be “operating in crisis mode.” But she says they’re still worried about the devaluation of federally subsidized research in general.
“Public funding allows us to do fundamental, critical science that informs so many aspects of our daily life, as opposed to industry-funded research that may be biased, that may have particular agendas.”
And Wong says that research has implications beyond the SeaLife Center.
“Healthy marine ecosystems (are) good for everyone. It is not just good for a particular subset of people,” she said. “For example, just understanding of marine ecosystems helps us understand the world that we live in, and that is knowledge that is key to all of us.”
On Tuesday, Kenaitze Indian Tribe Communications Manager M. Scott Moon said the tribe is still determining how the freeze will impact their services.
“The tribe’s leadership team is working to assess how the Office of Management and Budget’s memorandum will be implemented as employees continue to provide services to our un’ina – those who come to us.”
In Kenai, Acting City Manager David Ross says they’re closely monitoring the potential impacts of a freeze on city programs.
“I anticipate this may require some patience on our part, in order for us to evaluate how some of those decisions trickle down to policy or other changes that might impact us directly,” he said via email.
Kenai Peninsula Borough School District Superintendent Clayton Holland said the freeze wouldn’t impact the district’s two biggest pools of funding: grants from the Individuals with Disabilities Education Act and Title I money for low-income students. But he says there’s anxiety about the future of some of the district’s other federally-funded programs.
“We’re thinking of plans now,” he said.
As of Wednesday evening, a judicial order halting the freeze until at least next week was still in effect. The White House rescinded its initial memo halting payments, but said Wednesday it still plans to review federal spending
