By Dermot Cole
For The Cordova Times
Gov. Mike Dunleavy made the policy call to shut down the Power Cost Equalization program for rural Alaska July 1 and to suspend funding for higher education scholarships and support for Alaskans training to be doctors in the WWAMI program.
Most Alaska news organizations have failed to make it clear in their coverage of the issue that this was a policy/political decision by Dunleavy. Most have simply repeated the Dunleavy talking point saying that the Legislature failed to approve the funding.
The Cordova Times proves, however, that this can be clarified for the public with little difficulty: “All three programs are among those defunded in the current budget because of Gov. Mike Dunleavy’s assertion that they are subject to a super-majority vote of the Legislature, which so far has failed to pass despite unanimous support from the Alaska House Coalition.” Legislative majorities approved the funding, but minority Republicans aligned with Dunleavy did not.
The governor added the PCE endowment and the fund that supports scholarships and WWAMI to the list of funds subject to the so-called “sweep,” meaning a three-quarter vote was needed to approve them instead of the majority vote that they received.
He first did this in 2019 under former temporary budget director Donna Arduin as a political tactic to try to give the minority some political leverage over the majority of the Legislature. He did it again this year to try to justify an unsustainable draw from the Permanent Fund to pay a bigger dividend.
The move by Dunleavy has been challenged in court by the Alaska Federation of Natives and other groups.
A decision is pending. Last week the judge handling the case ordered additional arguments on a technical question about the source of the funds appropriated to the PCE endowment.
There are inconsistencies and contradictions in how the Dunleavy administration approached this matter of funds subject to the so-called sweep.
There are about 160 separate funds within state government that contain various amounts of cash. In 2019, Dunleavy decided that the contents of 54 of them should be placed in the Constitutional Budget Reserve because a super majority of the Legislature did not block the move. That left 105 funds not subject to the sweep. The differences in many cases are slight and subjective.
For political reasons, the Power Cost Equalization endowment was deemed subject to the sweep by Dunleavy. For different political reasons, the Alaska Industrial Development and Export Authority account was not subject to the sweep.
The governor’s office claimed that restrictions on AIDEA funds meant that it would remain intact with the super majority, but there are restrictions of a similar sort on the PCE endowment that were ignored.
Put simply, this was and is a political policy choice by Dunleavy.
As the Legislative Finance Division put it in 2019, “Nothing technical is driving an expanded sweep—any expansion of the list is a policy decision completely in the hands of the governor.”
The division also said that if the law regarding the PCE that places the endowment in the Alaska Energy Authority, outside the general fund, is insufficient to avoid the sweep, the earnings reserve of the Permanent Fund should be given the same treatment.
Dermot Cole is a veteran journalist living in Fairbanks, Alaska. Read his column, Reporting from Alaska, online at www.dermotcole.com.
