Politics

Dunleavy administration releases funding for college scholarships, medical students and other programs

Alaska’s WWAMI medical school program, thousands of college scholarships and other state programs will be funded despite ongoing disputes in the Alaska Legislature, Gov. Mike Dunleavy said Wednesday evening.

In a written statement, his administration said a new interpretation of state law and legal precedent allows a year of funding for those programs, even though the accounts used to pay for them may have been emptied.

That interpretation means dozens of state programs and about $77 million in new construction will also be funded, but worries about higher education have been most prominent in the Capitol.

“On behalf of the thousands of students who are counting on these funds for their future education, we are thankful for this outcome,” said interim University of Alaska President Pat Pitney.

WWAMI and the Alaska Performance Scholarship Fund have traditionally been paid for from the state’s higher education investment fund, but that account will soon be emptied into the state’s Constitutional Budget Reserve under a provision of the Alaska Constitution.

The Alaska Legislature normally votes to stop that provision from taking effect, but it failed to do so this year amid Republican opposition.

A lawsuit preserved the account used to pay for the state’s subsidy for rural home electricity, but the ruling in that case didn’t affect the higher education investment fund.

The governor proposed — and legislators have been considering — alternate ways to fund WWAMI and college scholarships, but those haven’t yet advanced.

In a letter to Dunleavy this month, Speaker of the House Louise Stutes, R-Kodiak, asked the governor for action on higher education.

Under the new legal opinion from Attorney General Treg Taylor, the state can release money for those programs because Dunleavy signed the state’s operating budget on June 30, one day before the constitution’s automatic “sweep” took effect.

Taylor opined that because the money was appropriated, it cannot be swept. He cautioned that this interpretation hasn’t been judged by courts.

“There is a reasonable argument these monies can be expended, but it would be an issue of first impression for the courts. Ultimately, we cannot say with certainty what the courts would decide,” Taylor wrote.

The new interpretation means about $80 million may be spent from the state’s Statutory Budget Reserve on school bond debt reimbursement and construction projects — many of which are in the Matanuska-Susitna Borough.

Because of the rural-power lawsuit and a lack of subsequent legal guidance from the Dunleavy administration, it remains unclear whether the rest of the budget reserve has been drained.

That uncertainty is a factor in ongoing discussions over the 2021 Permanent Fund dividend.

Members of the coalition House majority have proposed spending about $330 million from the budget reserve on the Permanent Fund dividend, part of a roughly $1,100 payment they envision.

[Missing Alaska House members and deep divides pause progress on 2021 dividend]

If the reserve is drained, that money wouldn’t be available, and the maximum possible dividend could be in the range of $850 unless lawmakers agree to spend more money from the Alaska Permanent Fund.

Members of the House’s Republican minority have urged the majority to spend more, but majority lawmakers have resisted because doing so would require violating a limit imposed in 2018.

Sponsored