Businesses to Legislature: Go back to Juneau, fix AK CARES

Jul 1, 2020

The Alaska CARES program has been live for about a month now. The program is supposed to distribute grants to businesses to help with the impact of the coronavirus pandemic, with funding that came to the state from the federal government. Gov. Mike Dunleavy said he wanted about $150 million to go out within the first 30 days to help keep businesses from going under.

That’s not how it’s worked out so far. Of the nearly two thousand applications submitted by Monday this week, less than 10 percent had been approved. There a handful of problems with the program, but the biggest one is that any small business that got aid through the federal Paycheck Protection Program or Economic Impact Disaster Loan programs is ineligible for it.

The Legislature could fix the program by passing a set of amendments, but that involves going back to Juneau for a special session. During a House Labor and Commerce hearing held on Wednesday, that’s exactly what dozens of business owners, economic development organizations, and members of the public asked them to do.

Tim Dillon, executive director of the Kenai Peninsula Economic Development District, outlined four specific fixes: One, to allow commercial fishermen to apply using their permits; two, to allow 501(c)6 nonprofits like chambers of commerce and trade organizations to apply; three, to open it up to businesses that had received those PPP or EIDL funds; and four, to give more authority to the state department of commerce to make minor changes as it needs to.

He specifically noted the impact to businesses that had received those PPP or EIDL funds.

"I need to remind everybody that no one is getting rich with this money," Dillon said. "No one is being made whole with this money. These are business owners and nonprofits that listened to our elected officials, not just from the state but from the federal government, did what we recommended, and now because of how the RPL is written, they are being penalized."

The state has taken more than a month to get a little more than $6 million out through its CARES program. By comparison, the City of Kenai got its program on the ground and checks out to businesses within a month. He urged the Legislature to go back to Juneau.

"This fix is not difficult. Please help us retain our way of life and salvage our economy," he said. "I get the fact that some of the legislators don’t want to go to Juneau because of other issues. But if you care at all about the great state of Alaska, you will go to Juneau now and pass this proposal, because businesses and nonprofits cannot wait another 30, 60, or 90 days."

Jon Bittner, the director for the Alaska Small Business Development Center, told the committee he’s been hearing stories of stress from communities all over the state, including the peninsula.

"There are dozens more comments like this, saying they’re struggling, on the ropes, financially, emotionally, any which way you look at it," Bittner said. "Their employees are suffering, they’re suffering; businesses are going under."

In addition to the group of invited presenters, more than 30 people called in to ask the Legislature to fix the program. Many focused on the impact to commercial fishermen, who were entirely excluded from the program because most of them have fishing permits instead of business licenses.

Rep. Ivy Spohnholz (D-Anchorage), who chaired the hearing, noted that the state’s legal department said it would take legislative action to fix the program. The House Labor and Commerce Committee has another hearing scheduled for next Tuesday about the program.

Reach Elizabeth Earl at eearl@kdll.org.