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Gov. Dunleavy must fix the Alaska CARES business grant program

  • Author: Colleen Hickey
    | Opinion
  • Updated: August 14, 2020
  • Published August 14, 2020

Furniture Classics owner Colleen Hickey at her store on 5th Avenue on Tuesday, June 16, 2020. (Bill Roth / ADN)

My name is Colleen Hickey and I am the owner of Furniture Classics in downtown Anchorage. Our store has been open for more than 30 years, in good times and bad. I have lived in Anchorage most of my life.

As a small business owner, the pandemic has been the most challenging issue we have ever faced. We were deemed non-essential and closed for more than five weeks earlier this spring; we have seen the impact of lower consumer spending all summer. We applied for both the Paycheck Protection Program Loan and Economic Injury Disaster Loan to stay afloat. We were lucky and received a Paycheck Protection Program loan in April, and much later received an Economic Injury Disaster loan. I emphasize loans because we are accountable to pay these back. While there may be some forgiveness to the PPP loan, the rules have constantly changed since its beginning, and I already know we will not qualify for the entire amount to be forgiven. Not even close. We didn’t lay off any employees. We kept paying the incredibly high health insurance premiums for our small group policy. We kept paying our vendors, both local and national. We paid our local municipal taxes, even though we were shut down and prevented from conducting business by Mayor Ethan Berkowitz.

I knew that this would be an incredible challenge, and so worked hard to do the right thing. It has not been easy.

But I will tell you it has been incredibly frustrating watching the glacial pace at which the state of Alaska is making changes to the Alaska CARES grant program. This program was allocated $290 million by the governor in his program, which was ratified by the Legislature. However, the provisions that went unexamined have created the disastrous effect of picking winners and losers.

The Department of Commerce has recently changed the eligibility guidelines for businesses, such as mine, that received Small Business Administration Loans to apply for the AK Cares Grants. Sort of. They have still kept some original rules and created an incredibly onerous process. Any amount of SBA funding over $5,000 must be returned, or you are disqualified from the grant program. They are even building a process with the SBA and creditors for businesses to return this money. I have spoken with colleagues and business owners in my field the Lower 48. To my knowledge, Alaska is the only state creating rules to return CARES dollars to the US Treasury, at the expense of small businesses, during this pandemic.

In what world does this make sense? In April, when we received the small PPP loan, the rules required us to spend it within eight weeks. Those rules have since been changed multiple times, but the point is we did what we were supposed to do, and those funds have been spent. There is no money to pay back the SBA in order to apply for a state grant which we may or may not receive and for which we do not know the amount we may be approved.

There is nothing in the CARES Act that required this. In fact, millions of small businesses, including thousands in Alaska, were encouraged to apply for both SBA programs, not knowing that our governor would then penalize them for it later. I have spoken with Sen. Dan Sullivan, who assured me this rule was unnecessary. He said that there is nothing in the federal CARES Act that required this exclusionary language that hurts small businesses. My understanding is that Gov. Mike Dunleavy and his team are aware of this. The fact that the changes have not been made is inexcusable.

It is now August. I am lucky. I have saved. I have borrowed. Our store is still hanging on. But many other small businesses have spent whatever funding they got from the SBA to stay afloat. Many got pennies for what their needs were. How are they supposed to return these funds? It’s literally a Catch-22.

These rules are unjust, and unfair. And they must change now. I am a nonpartisan voter. But I am a super voter. In the past, I tended to vote Republican, but the deafening silence from legislators and the governor, who proclaim their support for small business in Alaska and yet clearly have done nothing to help, is hard to ignore. I am not alone in this feeling. I urge Gov. Dunleavy to work with his commissioner and get these program fixes made now. Alaska small businesses that received any amount of SBA loans should be entitled to apply for AK CARES grants. Period.

Colleen Hickey is a longtime Anchorage resident and business owner.

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