Alaska state senators set menu for $1 billion in federal aid but hold off on final picks

JUNEAU — Alaska lawmakers don’t yet know how they will spend more than $1 billion in economic aid approved by Congress this spring, but members of the Alaska Senate have finalized a list of possible options.

The list of possibilities includes a potential boost the Permanent Fund dividend, improvements to roads and Internet access, help for local food production, and grants to businesses and tourism efforts.

Which options will make the final cut — and how much money each gets — will be decided in negotiations between House and Senate lawmakers, said Senate Finance Committee chair Bert Stedman, R-Sitka.

The list is included within the state operating budget, which is scheduled for a vote Wednesday in the Senate. Afterward, the Senate’s version of the budget will be combined with the House version. As long either version contains a listed item, it is eligible for inclusion in the compromise version of the budget.

Among the possibilities:

• A grant program of up to $280 million for businesses and tourism, similar to last year’s AK CARES program;

• Up to $80 million to cities and boroughs to forestall local cuts to services or local tax increases because of decreased tax revenue during the COVID-19 pandemic;

• Between $4 million and $6 million for organizations that assist domestic violence victims;

• Up to $20 million for seafood marketing programs;

• As much as $10 million to electric power companies;

• Up to $30 million for “food security” programs for local agriculture and the hungry;

The money would come from the $1.9 trillion American Rescue Plan. Part of that plan sends billions to states, which can use that money flexibly, based on local needs. Alaska is receiving $1 billion of flexible money under that plan.

The Alaska House of Representatives approved a plan to spend $700 million of that money and save the rest for next year, but late-published federal guidelines made that plan impossible. The guidelines say that Alaska will receive $500 million this year and $500 million next year.

State legislators must now figure out how to fit their spending ideas within that limit, and Stedman said he expects the process to take place as lawmakers “race toward the conclusion of this session over the next seven, eight, nine days.”