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Governor will sign reverse sweep clause, restoring funding for scholarships and rural power subsidies

JUNEAU — College students don’t have to worry about their scholarships, and rural Alaskans will no longer have to live in doubt about their subsidized electricity.

The office of Gov. Mike Dunleavy confirmed Thursday that the governor will not veto the Alaska Legislature’s fix for a failed procedural vote known as the “reverse sweep.” The failure of that vote earlier this year endangered more than $115 million in state spending this year. That spending comes from 54 separate savings accounts that would have been permanently drained without the reverse sweep.

“I’m pleased to be able to inform students, rural residents and Alaska families that a bill to restore funding for a variety of Alaska programs, including the Alaska Performance Scholarship (APS), WWAMI, PCE, Alaska Vaccine Assessment Program (AVAP), has passed in the Legislature and are appropriately funded. I am sharing my plans to sign that bill into law, making sure funds are available for these programs and that important arrangements and plans can begin being made immediately,” Gov. Dunleavy said in a statement shared by spokesman Matt Shuckerow on Thursday afternoon.

The governor previewed his decision in a social media post Tuesday.

“Yesterday’s action by the Legislature on the capital budget represents significant progress in moving Alaska forward,” the post said. “Programs like the Alaska Performance Scholarship and PCE — all items I included in my original budget but were not properly funded by the Legislature — are finally funded and qualified Alaskans can expect to take part in these programs.”

The reverse sweep is contained within Senate Bill 2002, which was approved by the Alaska House on Monday. The Senate approved it earlier.

The bill was transmitted to Dunleavy’s desk at 11:20 a.m. Wednesday, and the governor has until Aug. 17 to approve or reject the bill, according to the Legislature’s records.

Dunleavy’s signature will solve a problem that began when members of the Republican House minority withheld their votes in an attempt to convince other lawmakers to vote in favor of a $3,000 Permanent Fund dividend.

Three-quarters of the 40-member House and three-quarters of the 20-person Senate are needed to approve the reverse sweep, which in most years is a simple procedural matter that prevents program-specific savings accounts from being automatically drained into the state’s Constitutional Budget Reserve at the end of the state’s fiscal year, June 30.

With the 16-member Republican House minority withholding their votes, there was not enough support for the reverse sweep, and the drainage process automatically began July 1. That tore more than $115 million in holes within the state’s operating budget, above and beyond the $444 million vetoed by the governor.

Dunleavy proposed fixing those holes with one-time funding while allowing the drainage to continue, but a majority of lawmakers rejected that approach, preferring to leave those accounts available to provide funding in future years.

As of 3:15 p.m. Thursday, the Alaska Commission on Postsecondary Education had not received official word of Dunleavy’s decision, but executive director Stephanie Butler wrote by email, “We’re actively processing applications for the grant and the scholarship. Disbursements don’t occur until the end of the month, and we fully expect the funds to be available for disbursement by that time.”

The reverse sweep is only one clause of Senate Bill 2002, and the governor did not disclose Thursday whether he will selectively veto other parts of the bill, which also repairs the state’s capital budget. That budget calls for spending $171 million from the state’s Constitutional Budget Reserve to unlock more than $1 billion in federal matching funds.

The budget also sets aside $250 million from the budget reserve for possible wildfires in future years or other as-yet-unforeseen expenses. Actually spending that money would require additional approval by the Legislature.

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