JUNEAU — Alaska is getting more than $1.25 billion from the federal government to deal with the effects of the coronavirus pandemic, and last week, Gov. Mike Dunleavy said he plans to direct about 25% of that money to small businesses in the state.
But that aid is unlikely to arrive soon because of restrictions within the federal aid legislation and the need for the Alaska Legislature to approve the governor’s plan. With federal help slow to arrive, the state’s economic situation is worsening.
“The need’s acute. In Alaska in particular, the big three industries that drive private-sector employment -- tourism, oil and gas, and commercial fishing -- are all disproportionately challenged by the COVID-19 crisis,” said Thor Stacey, director of the Alaska chapter of the National Federation of Independent Businesses.
Speaking Tuesday, the governor said the Alaska Industrial Development and Export Authority, the Alaska Housing Finance Corporation and various loan programs operated by the Alaska Department of Commerce would share $300 million.
One day later, the U.S. Department of the Treasury issued legal guidance saying that aid money could not be used for loans.
On Friday, Neil Steininger, director of the Alaska Office of Management and Budget, said the state is now looking at offering grants to small businesses, but details haven’t been worked out.
Asked if the effort was still a work in progress, Steininger responded, “I would say so.”
Julie Anderson, commissioner of the Alaska Department of Commerce, said in a written statement that “Specifics of how allocated resources will be distributed are not yet determined.”
In addition, the Alaska Legislature has yet to approve Dunleavy’s plan to spend $300 million on small-business aid. The governor has asked a legislative committee to approve the plan by April 29, but lawmakers believe they need to authorize the money with a vote of the full Legislature.
In the past five weeks, more than 60,000 Alaskans — about 19% of the state’s workforce — have filed for unemployment benefits.
Two federal programs are intended to help small businesses, but the results have been mixed.
According to figures published Friday, only eight Alaska companies have received loans under the federally funded Nationwide Economic Injury Disaster Loan program. (Many more have been approved for payments when money becomes available.
In a nationwide survey, the National Federation of Independent Businesses found about 20% of businesses had received a loan under the separate federal Paycheck Protection Program. But according to Small Business Administration data, 4,842 Alaska businesses have received loans totaling $922 million under that program. It wasn’t clear how many businesses had applied in the state.
Tom Walsh is a managing partner of Petrotechnical Resources of Alaska, a company that supports oilfield work. The pandemic has sent oil prices plunging, and Walsh has seen his company’s existing contracts expire or be suspended.
“We’ve been kind of frustrated,” he said of the federal-aid process.
His company applied for aid through two banks but hasn’t yet been approved.
“The sooner that gets into the hands of small businesses, the better. Time is of the essence,” Stacey said.
Some help is coming, Anderson said. President Donald Trump signed legislation adding more funding to the federal programs, and the federal Small Business Administration is expected to begin processing applications again on Monday.
In addition, the Alaska Industrial Development and Export Authority is offering loan guarantees of up to $1 million for businesses with existing loans from Alaska banks. Businesses interested in the program can access that money through their lenders, Anderson said.
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