Federal dollars could be ‘game changer’ for Alaska families

students sit in a gym
Students in gym class at Dena’ina Elementary School in Wasilla on September 21, 2020. (Jeff Chen/Alaska Public Media)

Massive. Huge. Historic. That’s how journalists, economists and politicians are describing the most recent federal COVID relief plan, a $1.9 trillion bill that Congress passed earlier this month.

RELATED: Federal COVID-19 relief dollars are coming to Alaska’s economy. Here’s where the money’s going. 

One significant part of the bill that’s gotten a lot of attention is an expanded child tax credit.

“There’s a lot to be excited about,” said University of Alaska economist Mouhcine Guettabi.

The relief bill removes many typical barriers to aid, Guettabi said, and people will be eligible for a lot of money.

“My broad takeaway is: Massive injection. We’ve never seen anything like this. [It’s] really well targeted towards lower income households, in terms of the impact. The fact that there are advanced payments, and it’s fully refundable is a game changer.”

With the child tax credit, families could get as much as $300 per month, per child starting in July. Even people who don’t normally get the tax credit because they had no income last year could potentially qualify for these funds. And it’s a direct payment, no strings attached — much like the stimulus payments people are seeing pop up in their bank accounts.

Guettabi said that’s a big deal, too. 

“That’s the part that potentially makes a dent in terms of people’s finances.”

While it’s a temporary stimulus, Guettabi said those extra funds will stretch, particularly for low-income people. There is clear research that even a one-time boost to a family’s income can totally change the trajectory of a person’s life, Guettabi said. Finally being able to buy a car, for example, could lead to a better job and more earnings over time.

It could also simply mean less trips to the food bank, said Trevor Storrs, CEO and President of Alaska’s Children’s Trust.

Related: Alaska educators breathe sigh of relief as hundreds of millions of federal dollars roll in

“When you have a family that struggles, not just day to day, but at times, hour by hour, $200 feels like winning the lottery,” said Trevor Storrs.

In addition to the child credit, Storrs said other components of the bill including more money for food stamps and child care will improve Alaska children’s well-being.

Stephanie Berglund is CEO of thread Alaska, which advocates on behalf of child care providers in the state. Berglund anticipates over $92 million in child care support and relief for Alaska from the most recent aid packages.

That’s enough money to boost the child care industry to function better than it did before the pandemic, Berglund said.

“There’s an opportunity so that child care can be more accessible and more affordable for families, early educators can be paid a livable wage, and we have a stronger, overall-transformed child care system,” Berglund said.

Other organizations are also thinking about the long-term impact of these short-term funds.

Clark Halvorson is CEO of the United Way of Anchorage. He said calls to the 2-1-1 help line are still 300% higher than normal, even a year into the pandemic. 

People need help with child care, food and rent relief. The pandemic just made existing problems worse, Halvorson said. He hopes these federal funds will start to address the root of problems that’ve left so many Alaskans struggling in the last year. 

“We often talk about, ‘When are we going to get back to normal?’ And we’re trying to kind of change that dialogue a little bit and say, we really want to create a new normal,” Halvorson said. “One where people have equal opportunity.”

Details about how funding will be distributed and individual eligibility requirements are still coming. 

But most are in agreement: The funds will make a significant difference for families in Alaska, especially those that continue to struggle the most.

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