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Dunleavy Administration Urges a Quick Decision over Higher Education Fund Savings Account

Jan 5, 2022

Alaska Governor Mike Dunleavy has asked the Alaska Department of Law to request an expedited ruling for yesterday’s lawsuit filed by students over the Higher Education Investment Fund (HEIF). The funds at issue are the balance of the fund that was not used or needed to fund student scholarships in the current fiscal year. Those leftover funds were automatically, per the Constitution, placed in the State’s savings account, the Constitutional Budget Reserve.

Scholarship funding for the next fiscal year, (Fiscal Year 2023) has been requested by the Governor from the Legislature. “I have supported scholarship funding every year I have been in office and will continue to do so. Alaska’s students can be assured their scholarships will continue to be funded regardless of this lawsuit,” said Governor Dunleavy.

The legal issue in the case is fundamental to how Alaska’s public finances work. “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),” said Attorney General Treg Taylor. “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.”

Governor Dunleavy added, “The Legislature, the University, the Executive Branch, and Alaskans deserve a quick answer from the Court System – the only branch of Government that interprets the Constitution. I have asked my Attorney General to seek expedited consideration of this issue.”