The Alaska State Capitol is seen on Monday, May 2, 2022 in Juneau, Alaska. (James Brooks / Alaska Beacon)
The fate of an investment fund used to pay high school scholarships and for Alaska’s equivalent of medical school is in the hands of state lawmakers as they enter the last week of the session.
Last year, a technical decision by the administration of Gov. Mike Dunleavy and a failed procedural vote in the Alaska Legislature caused the $410 million Alaska Higher Education Investment Fund to be drained into the state’s Constitutional Budget Reserve.
A handful of students sued, arguing that administration officials acted incorrectly, but on May 3, the Alaska Supreme Court confirmed the legality of the administration’s actions.
The Alaska House of Representatives has voted to refill the fund with hundreds of millions of dollars in expected oil revenue, but unless lawmakers also change the language of the state law that created the fund, it will be automatically drained again.
Rep. Andi Story, D-Juneau, called the issue “critically important” during debates on the House floor.
Without the fund, the Alaska Performance Scholarship, Alaska Education Grant and WWAMI — which reserves seats at the University of Washington medical school for Alaska students — will need to compete annually with things like road maintenance for dollars in the state budget.
Doctors urge protection for fund
Without a designated source of revenue, those programs would become more vulnerable to budget cuts.
That has supporters alarmed, and as the session winds down, they’re urging lawmakers to act.
“These funds should not be subject to the political brinksmanship we have seen in recent years,” wrote Dr. Nicholas Papacostas, president of the Alaska Chapter of the American College of Emergency Physicians.
His letter was among many that lawmakers have received, particularly from doctors and other medical professionals. WWAMI supplies more than half of the state’s doctors, and earlier this year, Dunleavy proposed a 50% increase in funding, enough to put 30 Alaska students through the program each year, up from 20.
These funds should not be subject to the political brinksmanship we have seen in recent years. – Dr. Nicholas Papacostas, president of the Alaska Chapter of the American College of Emergency Physicians
These funds should not be subject to the political brinksmanship we have seen in recent years.
– Dr. Nicholas Papacostas, president of the Alaska Chapter of the American College of Emergency Physicians
Officials at the program, asked about that increase, said stability for the program is even more important than the amount of money it gets.
On May 2, the Alaska House voted 25-15 to rewrite state law to preserve the higher education fund and a similar fund that pays for the Alaska Marine Highway System.
House Bill 322 would declare that both funds are created outside the state’s general fund, thus making them immune to a provision of the Alaska Constitution. That clause requires money left in the general fund to be automatically swept into the Constitutional Budget Reserve at the end of the fiscal year.
HB 322 is now in the Senate Finance Committee, where co-chair Sen. Click Bishop, R-Fairbanks, says there is “significant interest” in moving it forward.
Its passage isn’t assured. In the House, several Republican lawmakers opposed preserving the fund, saying that doing so would violate the spirit of the Alaska Constitution, which prohibits dedicated funds.
“The public perception, whether they’re right or wrong, is that it is a dedicated fund,” said Rep. Mike Prax, R-North Pole.
Formally, the higher education fund isn’t dedicated. Lawmakers can use – and have used – money from it for other purposes, such as the state’s pension plan for public employees. Spending from the fund is also subject to the Legislature’s annual budget-writing process, now and in the future, said Rep. Sara Rasmussen, an Anchorage Republican who isn’t in either caucus.
Some opposition came because of social issues as well. Rep. David Eastman, R-Anchorage, said he opposes a policy by the UW medical school’s department of obstetrics and gynecology that requires medical residents to be committed to providing abortion care.
HB 322 is now awaiting a hearing.
Senate support for refilling the higher education fund is also uncertain. While the House voted to divert millions toward it, that money does not appear in the Senate’s version of the budget.
A final version of the budget will be subject to negotiation before the end of session.
Dunleavy will have the final say. Money for the education fund is subject to the annual veto process, and if the Legislature passes HB 322, that bill could be vetoed as well.
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