Governor Mike Dunleavy has asked the Alaska Department of Law to request an expedited ruling for Tuesday’s lawsuit filed by students over the Higher Education Investment Fund (HEIF). The funds at issue are reportedly the balance of the fund that wasn’t used or needed to fund student scholarships in the current fiscal year. The leftover funds were automatically, per the Constitution, placed in the State’s savings account, the Constitutional Budget Reserve.
Scholarship funding for Fiscal Year 2023 has been requested by the Governor from the Legislature as the Governor says that he has requested scholarship funding each year he has been in office and will continue to do so.
Attorney General Treg Taylor said:
“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). 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.”
The legal issue in the case is important to how Alaska’s public finances work.