It’s a simple concept: The Alaska Constitution allows no special carve-out funds besides the General Fund, the Permanent Fund, and the Constitutional Budget Reserve, a special fund created by voters in 1990, where the state deposits certain income from disputes over mineral-related income.
But Recall Dunleavy attorney Jahna Lindemuth tried to convince a judge Friday that the Power Cost Equalization Fund is also protected by the Constitution.
It’s not. It’s an unprotected fund created by the Legislature in the 1980s to help lower power prices in rural areas that don’t benefit from state-funded power projects in urban areas.
The lawsuit brought by Lindemuth on behalf of Alaska Federation of Natives was heard in court on Friday. Lindemuth came into the courtroom with two other briefcase-toting lawyers to try to make the case that the PCE fund is protected and the governor should have not “swept” those funds at the end of the fiscal year. Normally, all unspent funds get swept, and then the Legislature reverse-sweeps the funds back into their designated homes.
Lindemuth’s argument was made more difficult by the fact that the Legislature had the option to reverse sweep the funds, but politically it chose not to. It just let those funds go back into the Constitutional Budget Reserve. So Lindemuth, who has sued the governor repeatedly for various items, found a plaintiff to help make the case that the PCE fund is special.
Lindemuth made her argument all about the governor, not the appropriators in the Legislature. Time and again, she referred to “the governor,” even after the Department of Law attorney pointed out that Lindemuth was making it personal and that it was not the governor, but the State of Alaska that was the defendant.
Lindemuth, who stuttered and stumbled through her argument that the $1.15 billion PCE fund was protected, was the former attorney general, until her boss, former Gov. Bill Walker, was shown the door by voters. Now she makes a living suing Gov. Mike Dunleavy.
The state attorney Katherine Demarest argued that the Legislature could fund the rural power subsidy with an annual appropriation if it wanted to. It just didn’t have the political will to do so.
She likened the special funds categories like PCE in the general fund as basically sticky notes, which could be moved around to create legislative intent for how to spend various buckets of money.
Superior Court Judge Josie Garton appeared noncommittal and her lines of questioning revealed little. She said she would try to provide a decision on the matter in a timely way, which likely means this coming week.
Gov. Dunleavy is attempting to persuade the Legislature to allow voters to decide whether to put the PCE fund under constitutional protection, along with a formula for how the Permanent Fund dividend will be calculated going forward. He has had little to no cooperation from the House and Senate majorities, but his question to them is the core of the Aug. 16 special session in Juneau.