Sen. Mike Shower, R-Wasilla, speaks about ratifying Gov. Mike Dunleavy’s appropriations of federal funds Tuesday, May 19, 2020, while Sen. Jesse Kiehl, D-Juneau, listens. (Peter Segall | Juneau Empire)

Sen. Mike Shower, R-Wasilla, speaks about ratifying Gov. Mike Dunleavy’s appropriations of federal funds Tuesday, May 19, 2020, while Sen. Jesse Kiehl, D-Juneau, listens. (Peter Segall | Juneau Empire)

Small business funding may draw Legislature back to Juneau

Federal funding is not getting where it needs to go, lawmakers say

Senate Democrats and the House Majority caucus are calling for the Alaska State Legislature to convene a special session to address what they say is a mistake in the allocation of federal CARES Act relief money.

On Thursday, all six Democratic members of the Senate signed a letter accusing Gov. Mike Dunleavy of acting too hastily in using the revised program legislative requests, or RPL, process to allocate more than $1 billion in federal aid money. But because of the restrictions placed on the funds through the process, Alaskan businesses that received federal relief money were ineligible for state funds, according to the letter.

“Governor Dunleavy’s original plan to give much-needed grants to Alaska businesses cut out any business that got help directly from the federal government,” senators wrote in the letter. “A Payroll Protection loan to keep your employees working or an Economic Injury Disaster loan to keep the lease paid meant no shot at $290 million in grants through the state.”

Reconvening and passing detailed legislation would help Alaska businesses suffering during the pandemic, senators argued, and that needs to happen soon.

“I think the sooner the better, ” said Sen. Jesse Kiehl, D-Juneau Monday in an interview. “We need to help every Alaskan business that got left out. We should open it up to other businesses that are just struggling to keep their doors open.”

[Juneau man sues state over coronavirus relief distribution]

After Senate Democrats released their letter, House SpeakersBryce Edgmon, I-Dillingham, endorsed the idea on his Facebook page.

“I am gravely concerned about the state of small businesses in Alaska, including those in my district on the brink of collapsing,” Edgmon wrote. “After weeks of asking, we still do not have a clear answer from the Administration about their plan to fix to their program. This is unacceptable.”

But while there’s no debate Alaskan businesses are hurting, House Minority caucus members are wary of being drawn into a larger political fight, according to Minority Leader Rep. Lance Pruitt, R-Anchorage.

“If all we’re going to do is to ratify and get out really quick, then yes,” Pruitt said. “If people are going to try and broaden (the scope of the session), we could be down there for weeks.”

Once the Legislature convened, Pruitt said, anything was on the table, particularly discussion of an additional Permanent Fund Dividend in October.

“Anyone thinks that’s not going to be on the table, it will absolutely,” he said.

But that wasn’t necessarily the issue, Pruitt said. His concern is that Alaskans’ businesses wouldn’t see the problem fixed because its solution would be caught up in a political battle.

“If we were to go back as soon as possible, it would have to be specifically the small business issue,” Pruitt said. “Period. It’s simple, it’s easy, it’s done.”

Pruitt said he was willing to address other issues in a special session, but would want a guarantee the small-business issue would be resolved first and quickly.

That this is taking place during an election year was an additional consideration mentioned by both Kiehl and Pruitt, because lawmakers running for re-election must suspend their campaigns during session.

The Legislature needs a two-thirds vote to call itself into session, or the governor can call a special session.

Dunleavy spokesperson Jeff Turner said in an email the Department of Law and Department of Commerce, Community and Economic Development are working on a solution to the small business loan program.

Turner did not say whether the governor will call a special session.

• Contact reporter Peter Segall at psegall@juneauempire.com. Follow him on Twitter at @SegallJnoEmpire.

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