In a break from precedent, Gov. Mike Dunleavy has decided to include the state's Higher Education Investment Fund in the annual sweep of funds back into the Constitutional Budget Reserve fund at the end of each fiscal year, making funding that has already been approved and promised to students suddenly unavailable.
The move includes the Alaska Performance Scholarship for qualifying high school students who plan to attend college at the University of Alaska, the Alaska Education Grants, and the WWAMI program, a partnership among four Western states and the University of Washington in Seattle to allow for medical students to train in their home states and then attend the University of Washington Medical School.
The announcement was made in a post to Anchorage Democratic Sen. Bill Wielechowski's official Facebook and Twitter pages Tuesday afternoon.
"Breaking News: We have just confirmed that Gov. Dunleavy has denied funding for Alaska Performance Scholarships, Alaska Education Grants for low income Alaskans and WWAMI (medical school funding)," the post reads. "With the school semester set to start in several weeks, thousands of Alaskans — over 30% of University of Alaska students — will be denied funds that they were promised and that the Legislature voted overwhelmingly to provide.
"While the Senate voted unanimously for these funds, these cuts are due to the fact that the House Republican minority refused to vote for these funds to be protected and the governor has taken action to deny these funds from being released," it reads.
Wielechowski noted in a later statement that more than 5,000 students benefit from these scholarships and grants.
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 the money 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 provision, upsetting the vote margin needed to protect the funds.
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, Wielechowski 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 the announcement was made public, the Alaska Commission on Post-secondary Education sent an email to students and parents explaining the disruption in previously promised funding:
"The issue is that the current funding source doesn't have funds available for the programs," the letter reads. "We are hopeful that this situation will be resolved with legislation over the next month; however, as of this time, ACPE is not able to make awards under these programs."
The commission encouraged students to complete their federal student aid applications and work with their schools to submit all requirements to be eligible for the scholarships should the funding become available again.
The Dunleavy administration defended the choice in a post to the governor's official Twitter page 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."
Laura Cramer, deputy director for the Office of Management and Budget, told reporters Tuesday evening that the administration began analyzing what funds could be swept as early as the end of May and continued to act after the Legislature failed to approve a reverse sweep provision.
"OMB went to work analyzing every fund that exists to determine whether it's sweepable or not based on the clause in the Constitution that relates to the dedication of funds," Cramer said. "The Constitution requires us to repay the CBR and the Constitution also requires us not to designate funds."
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.
Cramer said the OMB is still working on finalizing its new list of what it believes is eligible to be swept.
UA President Jim Johnsen was attending the Save Our State rally against the governor's vetoes in Anchorage Tuesday evening and was unable to be reached for comment, but university spokeswoman Roberta Graham referred to the news as "alarming."
The Alaska Commission on Post-secondary Education was unavailable to be reached for comment late Tuesday.
Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMpolitics.