If the special Alaska budget sub-fund called the Power Cost Equalization Fund cannot be “swept” into the Constitutional Budget Reserve, then maybe the Higher Education Investment Fund can’t either.
Some University of Alaska students are testing that theory. They want the HEIF treated like the PCE fund and are asking the courts to decide the question.
It may not actually be students who are forcing the question. In fact, the attorneys handling the lawsuit are former Gov. Bill Walker appointees and Recall Dunleavy attorneys Scott Kendall and Jahna Lindemuth. They are regular litigants against the Dunleavy Administration.
In a message from University Interim President Pat Pitney, also a former Bill Walker functionary, it appears the University of Alaska may be behind the “student” lawsuit:
Gov. Mike Dunleavy asked the Alaska Department of Law to request an expedited ruling for yesterday’s lawsuit filed by the students. The funds at issue are the balance of the fund that was not used or needed to fund student scholarships in the current fiscal year. Those leftover funds were automatically, per the Alaska Constitution, placed in the State’s savings account, the Constitutional Budget Reserve.
Last year, the Supreme Court said the Power Cost Equalization Fund, used to help lower power costs for residents in rural Alaska, could not be swept in such a manner, creating a new legal standard for the Legislature that appears in conflict with the Constitution, but that must stand for now, due to the court order.
The issue in the case is fundamental to how Alaska’s public finances work and how the budget process is structured, the Governor’s Office said.
The lawsuit is at this link.
“The Alaska Constitution says after the Legislature borrows money from the Constitutional Budget Reserve, which is the main State savings account, this account is automatically paid back from other accounts, like the HEIF, to repay the fund at the end of each fiscal year. Billions have been borrowed from the CBR. Under art. IX, sec. 17(d), replenishment of the CBR is mandatory and not subject to control by the Governor, or the Legislature (absent three quarters vote to return the funds to the original accounts),” said Attorney General Treg Taylor. “If a state account qualifies for the repayment obligation, and the transfer has not been reversed by the Legislature, there is nothing anyone can do to stop the transfer to the CBR. The transfer is compelled by the constitution.”
Governor Dunleavy said that the Legislature, the University, the Executive Branch, and Alaskans deserve a quick answer from the Court System – the only branch of government that interprets the Alaska Constitution. “I have asked my Attorney General to seek expedited consideration of this issue,” Dunleavy said.
“I have supported scholarship funding every year I have been in office and will continue to do so. Alaska’s students can be assured their scholarships will continue to be funded regardless of this lawsuit,” Dunleavy said.
This story will be updated once Must Read Alaska gets a copy of the actual lawsuit.
