UAF Admit Day

Incoming students and their parents glance up at the Gruening Building while taking a tour of campus during the UAF New Admit Day for incoming students Friday morning, June 14 2019.

The Office of Management and Budget confirmed Friday evening that the Alaska Higher Education Investment Fund is, in fact, subject to the annual sweeping of funds back into the state's Constitutional Budget Reserve savings account.

Gov. Mike Dunleavy's budget office had signaled earlier this week that the education fund, which supports the Alaska Performance Scholarship, Alaska Education Grant and the WWAMI medical student training program, was likely going to remain frozen but that analysis of its qualifications to be swept into the budget reserve were still "underway."

A news release sent to reporters by Dunleavy spokesman Matt Shuckerow shortly before 5:30 p.m. confirmed that the education funds, along with about 50 other funds, are subject to the sweep and will remain unavailable.

In years past, not all of the state's many program accounts have been subject to an end-of-the-year sweep. Last year, the Legislative Finance Division listed 31 savings accounts eligible to be swept. The Higher Education Investment Fund was not on the list. This year, the Dunleavy administration increased that list to 53 accounts.

The Alaska Higher Education Investment Fund provides financial assistance to an estimated 5,000 Alaska students.

Nearly 1 in 5 degree-seeking high school students receive the Alaska Performance Scholarship, which is distributed in three levels of funding based on a student's high school grade point average, according to statistics provided by the Senate Democratic Caucus. Additionally, Democratic Sen. Bill Wielechowski of Anchorage noted, more than 1 in 10 degree-seeking students receive the financial needs-based Alaska Education Grant. Both funding sources combine to support more than 30% of University of Alaska students.

Soon after a news release was sent out earlier this week that the education fund may be moved into the budget reserve, the Alaska Commission on Post-secondary Education sent an email to thousands of students explaining that the scholarships they had already been promised were indefinitely off the table.

The operating budget passed by the Alaska Legislature earlier this year included additional funds for the Higher Education Investment fund to specifically support the three programs. However, in order to protect the money from the sweep of funding at the end of each fiscal year, the Legislature needed to approve a "reverse sweep" budget provision to keep that money and the money in other funds from being sent back to the budget reserve.

Due to disputes over the amount of the Alaska Permanent Fund dividend, the House Republican Minority did not approve the reverse sweep provision, leaving the provision short of the votes needed for approval.

The governor blamed the Legislature in a post to his official Twitter account Tuesday evening.

"Rhetoric on 'reverse sweep' is incorrect," the post reads. "The power of appropriation lies solely with the Legislature, not the governor. #AKLeg has failed to adequately fund these programs."

Dunleavy's budget director, Donna Arduin, also sent a separate letter to legislative finance co-chairs confirming that the funding for the Alaska Energy Authority's Power Cost Equalization program has also been included in the sweep. This program was specifically designed to provide financial assistance to rural communities in an effort to offset skyrocketing energy costs in areas of the state where the kilowatt-hour charge for electricity can be three to five times higher than the charge in more urban areas of the state.

Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMpolitics.