State lawmakers want more legal guidance on Dunleavy’s CARES Act plan

Rep. Chris Tuck, D-Anchorage, discusses Senate Bill 89 during free conference committee in the Capitol in Juneau on April 22, 2019. The bill would change the law regarding conflicts of interest involving legislators, family members, employers and potential employers.
Rep. Chris Tuck, D-Anchorage, during a committee meeting in the Capitol in Juneau last year. Tuck said Wednesday there are outstanding questions about whether the Legislature will need to reconvene to appropriate federal CARES Act funds. (Photo by Skip Gray/KTOO)

Gov. Mike Dunleavy says nearly half of the $1.25 billion in federal CARES Act money received by the state will go straight to local governments.

On a Wednesday call with reporters, Gov. Mike Dunleavy said $562.5 million would go to cities and boroughs.

“We’re hoping that the (Alaska) Legislature takes a look at this and acts quickly,” he said. “We want to get this money out as soon as we possibly can and get it into the hands of Alaskans as soon as we possibly can.”

More than a quarter of the funding — about $156 million — would go to the Anchorage municipality. Juneau would receive about $53.2 million.

In most cases, the money would come in stages paid in May, July and October.

The Alaska Municipal League applauded the governor’s move.

“AML estimates that local government revenues will be impacted just in the short term — March through June — by as much as $150 million, and longer-term impacts by another $100 million,” the organization representing local governments wrote in a memo.

But AML Executive Director Nils Andreassen said not all communities are celebrating. In some cases, the federal funding won’t make up for revenue erased by the governor’s vetoes — specifically his blocking of school bond debt reimbursement. And some communities are receiving fewer payments than others.

“There’s questions about why some communities received an additional contribution or distribution and some didn’t,” Andreassen told CoastAlaska. “But generally the feedback we’re receiving from communities is that they’re really hopeful that this meets their needs in the short-term and the long-term.”

Ben Stevens, the governor’s chief of staff, told reporters local governments would receive the funds with few strings attached.

Gov. Mike Dunleavy’s Chief of Staff Ben Stevens, left, talks to Senate Majority Leader Lyman Hoffman, D-Bethel, after Dunleavy’s State of the State address on Jan. 27 in Juneau. (Photo by Rashah McChesney/KTOO)

“We can provide resources through the CARES Act to the municipality,” he said. “How the municipality chooses to use those, is the municipality’s side of it.”

But some lawmakers say they’re skeptical it’s that simple. They’ve told the governor they’re waiting for the Legislature’s nonpartisan lawyers to weigh in.

“The last thing we want to happen is to owe the federal government this money back,” Anchorage Democratic Rep. Chris Tuck, who chairs the Legislative Budget and Audit Committee. He told CoastAlaska there are outstanding questions about whether the Legislature will need to reconvene to appropriate these federal funds.

The CARES Act disbursements are being overseen by the U.S. Department of the Treasury’s inspector general, Tuck said. That will require due diligence by the state to ensure the money is spent appropriately, which is why lawmakers want a legal opinion.

“But we’re going to do this very, very quickly,” Tuck said. “Because we know that Alaskans are hurting.”

In a follow-up statement released to reporters, Dunleavy walked back his assertion that some of his vetoes could be replaced with federal stimulus money.

“When I publicly stated CARES funding could be used to replace state funding, I was working with the best available information at the time which led many to believe CARES act funding could in fact be used to offset revenue loss,” the governor wrote. “Today, there continues to be a lack of clarity as to whether the use of CARES act funds can be used to backfill lost revenue as a result of the pandemic.”

He added that his administration will operate under the federal guidelines for stimulus funds to “mitigate the impact of the pandemic on state/municipal expenses and to support businesses and the state’s nonprofits.”

 

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