Governor Dunleavy addresses the press on Monday, April 20. (Photo Courtesy of Governor’s Office under Creative Commons Attribution-NonCommercial-NoDerivs)
This week Governor Mike Dunleavy announced plans to distribute over $500 million to municipalities across Alaska using federal funds for pandemic relief. The boost in funding could be a significant benefit for the Haines and Skagway boroughs. Whether those dollars will make it to local governments and how they can be spent is still uncertain.
In March, Governor Dunleavy gave a broad outline of his plan to stabilize Alaska’s economy during the COVID-19 pandemic.
He stated that the plan included assistance to local governments across the state.
“Our municipalities are also under great stress as a result of increased healthcare demands and the economic uncertainty. This has resulted in a loss of revenue such as sales tax. Resources will be set aside to help them cope with the expected loss of revenue and the ramifications of the economic shutdown,” Dunleavy said.
The Haines Borough has been trying to figure out what that could mean for the community.
Earlier this month, the governor eliminated state funding to help pay off municipalities’ school bond debt. Without that support from the state, paying off the bond to build the Haines school would become one of the borough’s largest expenses.
At a committee of the whole meeting on Tuesday, Haines Borough Finance Officer Jila Stuart said it was unclear whether federal COVID-19 pandemic relief could be used to make up for that budget cut.
“Alaska Municipal League has said that they hope the state will distribute 400 million of that federal CARES money to the municipality, but right now that is kind of a question mark,” Stuart said.
The borough got a clearer picture later that evening, when the governor released a document that showed how much federal relief he intended to distribute to each community.
According to his plan, the Haines Borough would receive a total of $4 million in assistance from state and federal funds over the next 5 months. The Municipality of Skagway would receive nearly $7.5 million.
Skagway Borough Manager Brad Ryan said he hopes those funds can be used for the community’s needs.
“It is a big number,” Ryan said. “It’s a huge bonus. I mean if we were sitting on $7.5 million… It’s a game changer for us.”
However, Ryan said the municipality is moving forward with their budget as if that funding isn’t there. He said it’s uncertain whether the money will come through and how it could be spent.
“We have not been looking at this funding that’s coming through and amending the budget or the budget process based on it. None of it is solid yet. I think it would premature to even go back to the drawing board and change the budget at this point. We used fund balance and that’s what we’re doing.”
Ryan said Skagway is in the process of changing their municipal budget to match the regular calendar rather than the fiscal year. Their next budget will only be in place for six months, from July through December, before they make the switch.
Legislators have questioned whether the governor has the authority to spend the money without the Legislature passing a specific appropriation. There are also uncertainties about whether the money can be used to fund things like school bond debt reimbursement.
Senate Finance Co-chair Bert Stedman says the state Legislature will be reconvening in coming weeks to appropriate funding from the federal CARES act.
