Closing out the CARES Act

The CARES Act’s Coronavirus Relief Fund – the $1.25 billion that went to the state – is required by Congress to be expended by Dec. 30. While the governor and Legislature agreed to distributing these funds in a variety of ways, from small business support to housing relief, as well as to meet its public health response to COVID-19, roughly 45% was distributed to local governments.

Local governments have spent about half their allocation on business support, and the rest on public safety, public health and emergency response needs. There are some communities that have chosen not to accept their allocation, which will revert to the state to apply to their allowable expenditures. Anything left over from the rest will do the same.

For those following the concern expressed by some that these funds will disappear at the end of the year, it is important to know that reporting lags spending, and government accounting can look back and apply CARES Act funds to allowable expenditures. Local governments could receive their CARES Act funding in the last week prior to December 30, and have already recorded allowable expenditures since March, and report accordingly. We won’t have a full accounting until March.

Alaska’s local governments:

• Have fine-tuned responses and grant programs to meet the unique circumstances of each community.

• Were not made whole by the CARES Act, and many have been drawing from emergency reserves to meet revenue shortfalls.

• Have had to reduce some of their services, and reduce employee hours and numbers, with upcoming budget processes most likely demanding additional cuts.

• Have generally avoided increasing taxes and waived or extended many deadlines, even as 91% report reduced revenues during this period.

Local governments have shored up communities and businesses after federal and state relief ran out. And in less than a month, allowable expenditures under the CARES Act will expire. We have no doubt that through local and state budget processes, CARES Act funds will have contributed meaningfully to responses to the public health emergency and economic crisis. With relief from the federal government of more than $5 billion, Alaska has weathered this storm.

Except this extreme event is not over. Come Dec. 31, and through at least the first half of 2021, there will still be a pandemic. Mitigation efforts will still be necessary, and maybe more important than ever. Hospitals, schools, public facilities, businesses, nonprofits, residents – all will need continued support throughout these crises. Vaccine distribution will require additional lines of effort. But the resources that local governments and the state have relied on will be absent. Emergency reserves will have been depleted. Grant programs will no longer be in place. Housing and food relief efforts will have ended.

While it is true not all local governments have been impacted the same by these circumstances, local governments will be fundamental to economic recovery – this isn’t a bailout, but a critical investment at a crucial juncture.

We are extremely concerned these next six months might be our most challenging yet. Decisive congressional action early in the pandemic mitigated more negative impacts during these last nine months — it has made things manageable. Without similar action, we know that many of our residents who remain unemployed will need individual assistance, food, and mortgage and rent relief that we have been able to provide during this time; business owners that would normally have benefited from an active summer season (and who have seen reduced capacity and closures) will be left without the resources to maintain until next summer, and the reports from the business community remain bleak.

Many components of a congressional package seem to be agreed to — individual assistance, education and hospitals, unemployment benefits, business relief, vaccine distribution support. The message that Alaskans can share with our Congressional delegation is that Alaska’s local governments and the state need additional relief as part of that disaster response and relief package.

Nils Andreassen is the executive director of the Alaska Municipal League, which works to strengthen Alaska’s 165 cities and boroughs. AML has supported members in CARES Act coordination efforts, reporting activities, and updated federal and state guidance. AML’s board of directors passed a resolution in August calling on Congress to pass additional measures in support of state and local relief, including flexibility for that aid to be applied to lost revenues and other needs of local governments; and encouraging the federal and state governments to direct COVID relief funds to local governments for effective and quick distribution to businesses and nonprofits within their communities.

The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.