Alaska News

Alaska will get a massive injection of money from the COVID-19 aid bill. Here’s where it’ll go.

Over the next several months, Alaska will start seeing the impact of the newest COVID-19 relief package — the American Rescue Plan — which President Joe Biden signed into law this past week.

The $1.9 trillion package is one of the largest stimulus acts in American history, and the $1,400 individual checks started showing up in Americans’ bank accounts over the weekend.

But beyond individual payments, the act also includes several provisions and sets aside funding that will have far-reaching impacts on Alaska’s economy. From a child tax credit that has the potential to lift thousands of children out of poverty, to assistance for local and state governments, the package “touches every facet of Alaska,” said Mouhcine Guettabi, an associate professor of economics at the University of Alaska Anchorage.

Here are a few of the particularly significant parts of the package for Alaska businesses, families and government:

What can individuals and families in Alaska expect from the package?

The rescue plan specifically targets people who were impacted most by the pandemic, according to Kevin Berry, an associate professor of economics at UAA.

The expansion of unemployment insurance, direct stimulus payments and child tax credits in the package put a lot of money into the pockets of Alaskans who were disproportionately impacted by the pandemic, he said.

Among the provisions is a direct $1,400 check to individuals and a $5,600 check to families. An estimated 85% of Americans qualify for the payments, the Associated Press reported.


The payments will help some Alaskans pay their bills and further inject money into Alaska’s economy as others spend it locally.

“Everybody who doesn’t need the money to pay their rent, hopefully they go spend it at local restaurants and bars,” Berry said.

In addition to individual checks, around 12,000 kids could get bumped above the poverty line in Alaska, and 91% of children in the state are set to benefit from a child tax credit provision in the package, according to research from the Center on Budget and Policy Priorities, a left-leaning think tank.

On top of that, there’s also an extension of food stamp benefits, an expansion on unemployment insurance as well as housing support money, some of which is specifically set aside for Alaska Native organizations, Berry said.

What do state and local governments get out of the package?

State and local governments in Alaska are getting more than $1.3 billion total, including $140 million going directly to local governments and a bit more than $1 billion going to the state government, Guettabi said.

The roughly $1 billion going to the state is really flexible, which Guettabi said is important because it gives the government a lot of freedom to use the money how they see fit. They can choose to help out individuals or communities, or help with the state’s drop in revenues.

“One of the big question marks to me is how the state chooses to potentially allocate the money that’s coming directly to it,” he said.

Local governments derive their money from sources like taxes, which means there were big variations in how different communities fared throughout the pandemic. Some local governments that rely on property taxes didn’t see a major revenue shift while tourism-dependent communities missed out on a lot of revenue last summer, he said.

On top of that, in some rural communities, local governments are major employers. Without any extra assistance, revenue declines in those places could eventually lead to job cuts. Having fewer people employed can lead to secondary effects, with people potentially spending less money in the community or leaving altogether, Guettabi said.

“So stabilizing economic activity and stabilizing local government revenues so that they’re prepared for, hopefully, when things normalize is incredibly important from a broad economic perspective,” Guettabi said.

Alaska is already leading U.S. states in vaccinations per capita. How does the extra money toward vaccine efforts help the state?

The rescue package also includes funds to help with COVID-19 vaccine efforts nationwide. While Alaska is further along than many other states in vaccinating large swaths of the population, Berry said that national vaccine progress could mean more tourists heading to Alaska this summer.

The more people in the Lower 48 who “are vaccinated and feel safe getting on a cruise ship or flying up here, the more potential tourists we have,” he said.

Plus, the more Alaska residents who are vaccinated, the more attractive the state might become as a destination.

“Think about a potential traveler,” Guettabi said. “The quicker we can have pamphlets or ads saying ‘everybody in Alaska is vaccinated,’ the more likely somebody that’s thinking about coming to Utah or Alaska will choose Alaska.”

How does this package help Alaska businesses?

Not only does the rescue package help individuals, there is also additional assistance for businesses. The package adds funds to existing programs, like the Paycheck Protection Program as well as the Economic Injury Disaster Loan program, according to Jon Bittner, executive director of the Alaska Small Business Development Center. That’s good news, Bittner said, because it will allow those well-used programs to continue.

Bittner also pointed to a new program that has $29 billion set aside for restaurant revitalization in the package. Each grant recipient can get up to $10 million, Bittner said. The funds can be used for expenses like payroll, but they can also be used for food and beverages, unlike existing programs.

“This will help these particularly hard-hit businesses really get back on their feet, restock and pay off a lot of their operating costs as they start to recover,” Bittner said.


Bittner stressed that business owners who may not see something applicable to their situation right away shouldn’t lose hope. There might be other programs out there as well as potential future funds from local and state governments, he said.

Bittner recommended that people reach out to their lawmakers and local government to advocate for what they need.

“Policymakers don’t know what they don’t know. This is extremely complicated and almost all brand new,” he said. “So the more engaged the business and nonprofit and individual communities are, the better the response from the government will be.”

Morgan Krakow

Morgan Krakow covers education and general assignments for the Anchorage Daily News. Before joining the ADN, she interned for The Washington Post. Contact her at