Alaska Municipal League predicts up to $250M hit to local government revenues

A group walks in front of Juneau City Hall on Tuesday May 10, 2016 in Juneau, Alaska. (Photo by Rashah McChesney/KTOO)

The Alaska Municipal League is predicting the COVID-19 pandemic will incur between $200 million and $250 million in expenditures by local governments.

The nonprofit, nonpartisan organization calculated another $200 million to $250 million impact to municipal revenues, with the loss of tourism and other impacted industries.

Federal money from the $2 trillion CARES Act, passed in March, is expected to offset some of that hit to Alaska’s local communities.

Nils Andreassen, executive director of the league, said while the federal aid is expected to be used for emergency response expenses, local governments are able to define what falls under emergency response.

Get the latest coverage of the coronavirus in Alaska

“All your medical emergency management costs, public health costs, payroll costs for anyone working on response or management of the crisis, then anything in response to state health mandates or CDC guidance,” said Andreassen. “And then it also allows for secondary impacts to be covered. Basically any economic support to those suffering from employment or business interruptions that the local government wants to offer.”

Andreassen said community leaders from across the state have been working together to understand how to respond economically to the crisis, and what aid money can and can’t pay for.

“It’s brought people together more closely than I’ve ever seen before,” he said. “Mostly because we have this common challenge that everybody’s trying to overcome. And everyone’s trying to find solutions in the public’s interest.”

Right now, Andreassen said it’s still unclear how communities can use aid money to cover things like school bond debt reimbursement. He said they’re waiting on guidance at the state and federal level.

“I think once we have better guidance from (the Alaska Office of Management and Budget) and from the state as to what are eligible expenditures, then we’ll be able to look at the difference between, you know, what can we make up through CARES Act funding and what’s left for the school bond debt reimbursement.”

Right now, the Alaska Municipal League is working as a go-between for federal officials and local governments, said Andreassen. Last week, U.S. Sen. Lisa Murkowski said that CARES Act funding was intended to benefit businesses, municipalities and organizations that COVID-19 has touched directly.

School bond debt reimbursement is a gray area, said Shirley Marquard, executive director of the Southwest Alaska Municipal Conference.

“I’m sure there’s going to be a lot of discussion about how that money can actually be used,” she said. “And hopefully by the time the Legislature is meeting with the governor, they have really clear direction from a federal administration on that.”

Previous articleBuying a slice of The Greatland: How to buy state-owned land in Alaska
Next articleIce jam below Napaimute breaks free; Kuskowkim communities prepare for flooding