Dunleavy administration’s veto error will see $4 billion protected in the Permanent Fund
JUNEAU, Alaska (KTUU) - Gov. Mike Dunleavy wanted to stop a $4 billion transfer to the constitutionally protected part of the Permanent Fund, but administration officials failed to veto it from the budget signed into law last Wednesday.
Dunleavy will not try to block the transfer from going through, a spokesperson from his office said Tuesday.
The governor announced last Thursday that he was vetoing the transfer as he also cut funding for the 2021 Permanent Fund dividend and $215 million in other spending items from the budget. He said the $4 billion transfer should be part of debates during an August special session focused on the dividend and forging a comprehensive fiscal plan.
But there was a problem. The budget bill sent back to House Speaker Louise Stutes, R-Kodiak, had the $4 billion Permanent Fund transfer still intact. Dunleavy wrote to Stutes on Friday, saying his administration’s failure was due to “unusual time constraints’' in reviewing the budget. Corey Allen Young, a spokesperson for the governor’s office, said the mistake came down to a “scrivener’s error.”
In an update on Tuesday, Young said that the Dunleavy administration will now allow the transfer to go through and that it will not impact the governor’s 50-50 Permanent Fund plan, which has been widely derided as being overly optimistic.
It remains unclear whether the governor had the power to stop the Permanent Fund transfer if he wanted to. Some legislators said the budget bill signed by the governor is the law, regardless of Dunleavy’s intentions.
“These things do come to a finish line. It’s like the 100-meter dash — when you break the tape, there’s no more tape,” said Rep. Andy Josephson, D-Anchorage.
The governor’s vetoes can be overturned by three quarters of the Legislature when it’s next in session, but it’s unclear how a veto could have been implemented retroactively. The Legislature’s attorneys were studying the veto issue before the governor’s announcement on Tuesday.
The impact of the Dunleavy administration’s error is that $4 billion will be taken from the $12.2 billion Permanent Fund Earnings Reserve Account. It will be moved to the $60 billion portion of the fund that can only be spent by a vote of the people.
“For future generations of Alaskans, this is a great result,” Josephson said.
The nonpartisan Legislative Finance Division has estimated that for every $1 billion in the Permanent Fund, Alaskans will make $50 million in investment earnings per year in perpetuity.
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