Governor lays out his plan to spend $1.25 billion in COVID-19 relief, but actions by the Legislature may be needed

Gov. Mike Dunleavy announced a plan to the Legislature Wednesday to use $1.25 billion in federal funds that has been received by the state as a part of the government’s COVID-19 financial aid package.

The plan includes $562 million for municipalities; $300 million for small business loans; $50 million for nonprofits and $337 million for public health.

At a Wednesday press conference Ben Stevens, Dunleavy’s chief of staff, said that 45 percent of the $1.25 billion appropriation to the state be paid out as financial aid to municipalities. In doing that the governor is respecting the intent of Congress in the CARES act, he said.

Stevens said the money would flow through several established programs such as Community Assistance, a state program administering direct grants to communities.

Separately, the Legislative Finance Division told the House Finance Committee in a hearing Wednesday that many of the governor’s proposals for the $1.2 billion will require appropriation actions by the Legislature. The Legislature is now in recess, but there are discussions about reconvening the 2020 session in early May to make the needed appropriations.

Research is being done on how lawmakers could conduct a session electronically, but current law seems to indicate that lawmakers physically meeting in the state capitol might be needed to make changes in rules, and perhaps in statute, to allow subsequent work on budget actions to be done electronically.

Dunleavy urged the Legislature consider using a Revised Program Language, or RSL, as a procedure to get money out quickly. The administration uses RSLs to make interim budget adjustments between sessions, working through the Legislative Budget and Audit Committee. LB&A is interim panel that handles budget matters for the Legislature between sessions. Through RSLd the committee would be asked augment the ability of agencies to receive additional federal funding from the CARES act.

“Congress and the President (Trump) want to get this money out quickly as possible and Congress sent the money directly to the state,” Dunleavy said. He said he believes the RSL process is more appropriate, to speed things up.

Attorneys for the Legislature disagree, saying the procedure won’t fit this purpose and that legally at least some of the $1.25 billion will need an appropriation action by the Legislature.

Outside of the $1.2 billion, in terms of direct funding under the CARES act, there will be $29 million being made available for public transit; $32 million for international airports, or those in Anchorage and Fairbanks, and $100 million in aid for fisheries.

The Legislative Finance Division also presented am overall breakdown of CARES act funding at the House Finance Committee meeting:

• Some funds will flow directly to recipients. This includes money to tribes, some airport funding, health care facilities, the $1,200 individual stimulus checks, and small business loans through the Small Business Administration under the Paycheck Protection Program or PPP. Initial funding for small business loans has been exhausted but Congress is now working on a second phase,

• Some of the CARES act money will also flow through the state based on existing appropriations to programs

• Earlier this spring the Legislature granted gave open-ended “receipt authority” (the Legislature must give state agencies permission to receive federal funds) to the state labor department to receive additional federal funds for unemployment compensation and to the Department of Health and Social Services to receive more money for Medicaid and Public Health.

• Additional funds received under the CARES act, such as for economic assistance or business loans, will need to be appropriated by the legislature, according to the Legislative Finance presentation