Oral arguments in PFD lawsuit slated for today

By STEPHANIE PROKOP
Morris News Service-Alaska

Oral arguments are scheduled for today in the Superior Court Third Judicial District in Anchorage for the lawsuit filed by Sen. Bill Wielechowski, D-Anchorage, and former state Sens. Rick Halford and Clem Tillion.

The plaintiffs are demanding a full dividend payout for 2016 and have asked the court to order the Alaska Permanent Fund Corp. to transfer funds from the Permanent Fund earnings reserve account to the Dividend Fund. Proceeds would then be disbursed to eligible residents in the form of a supplemental PFD check.

Earlier this year, the Legislature initially passed an appropriation bill that authorized a transfer of $1.3 billion into the Dividend Fund. This amount was based on estimates as calculated according to statutory formulas.

Gov. Bill Walker, citing the “gravest fiscal crisis in state history,” vetoed a portion and cut the authorized amount down to $695 million, reducing the PFD to $1,022 from just more than $2,000 per Alaskan.

The plaintiffs filed the lawsuit against the Permanent Fund Corp. and the State of Alaska on Sept. 16, arguing that Walker’s veto was unconstitutional because the amount to be made available for distribution is not arbitrary but calculated according to statute. The APFC is thus required to transfer this amount, according to their argument, and is not subject to the governor’s line item veto authority.

In addition, the plaintiffs note the governor improperly deleted language in the appropriations bill: “authorized under AS 37.13.145(b)” and “estimated.”

The state, in its motion for summary judgment filed Oct. 28, counters that:

• One, every year, an appropriation bill is passed to authorize the transfer of income from the Permanent Fund to the Dividend Fund. Unappropriated funding is unconstitutional.

• Two, the APFC is not required to transfer the amount calculated according to two separate statues. Instead, the APFC is required to transfer funds that are appropriated in the operating budget.

• Three, the Legislature had the opportunity to override the veto, but did not, despite holding a special session in July.

• Four, the constitutional amendment that established the Permanent Fund in the first place is ambiguous when it comes to specifying a dividend program or how funds are to be used. The Dividend Fund is not dedicated, the defendants claim. Money may be spent for any program, not just distributions or administration of the fund.

• Five, deleted language in the appropriations bill did not alter the purpose of the appropriation, and was neither unconstitutional nor improper.

In their motions to the court, both sides submitted lengthy history lessons, from the origins of the Permanent Fund to public perception and the modern day dividend dilemma.

The bottom line is the plaintiffs want money transferred to the Dividend Fund so proceeds can be disbursed to Alaska residents via the Department of Revenue. The defendants want the governor to retain the right to control state spending through the line item veto.

“If this Court were to uphold the governor’s line-item veto in this case it would subject Alaskans to the ephemeral whims of the governor, who would possess the unilateral power to set the PFD each year, subject only to a legislative override requiring three-fourths of the state’s elected representatives,” the plaintiffs claim.

The state responded that the case is without merit, and myopic, focused narrowly on statutory language and missing the larger picture of the constitutional purpose of the governor’s veto power.

Wielechowski is serving as co-counsel for the plaintiffs, along with Andrew Erickson. Judge William F. Morse is presiding. Both sides agreed to seek summary judgment, which is a case in which the facts are not in dispute but only the question of legal interpretation. As such, only oral arguments and motions to the court will be presented with no testimony from witnesses.

Ultimately the Alaska Supreme Court will have final say on the matter as the losing side in Superior Court is expected to appeal.

Stephanie Prokop is a reporter for the Alaska Journal of Commerce. She can be reached at stephanie.prokop@alaskajournal.com.

More in News

Clem Tillion of Halibut Cove poses for a photo on Jan. 9, 2020, in Homer, Alaska. The veteran Alaska legislator was passing through Homer while waiting to take the M/V Tustumena ferry to Kodiak. (Photo by Michael Armstrong/Homer News)
Clem Tillion, PFD founder and former legislator, dies at 96

Tillion died Wedneday, Oct. 13, at Halibut Cove home.

Thunder Mountain High School on April 18.  Earlier this fall, vandalism including stolen soap dispensers and toilets clogged with foreign objects such as paper towel rolls were a problem at schools nationwide and in Juneau. But, principals say the local situation is improving. (Ben Hohenstatt / Juneau Empire File)
After brief surge, vandalism subsiding at local high schools

Principals say internet trends, stress likely behind incidents.

In this Jan. 8, 2020, photo Sen. Lisa Murkowski, R-Alaska, heads to a briefing on Capitol Hill in Washington. An Alaska man faces federal charges after authorities allege he threatened to hire an assassin to kill Murkowski, according to court documents unsealed Wed., Oct. 6, 2021. (AP Photo/J. Scott Applewhite,File)
Delta Junction man faces charges over threatening Murkowski’s life

Authorities allege he threatened to hire an assassin to kill the senator.

Donna Aderhold recites the Homer City Council oath of office and is sworn in for duty at the city council meeting on Oct. 11. (Photo by Sarah Knapp/Homer News)
New council members sworn into duty Monday

Newly-elected Homer City Council members Shelly Erickson and Jason Davis and re-elected… Continue reading

Runners participate in boys varsity race at the Ted McKenney XC Invitational on Saturday, Aug. 21, 2021, at Tsalteshi Trails just outside of Soldotna, Alaska. The trails recently reported incidents of vandalism and theft. (Photo by Jeff Helminiak/Peninsula Clarion)
Vandalism and theft reported at Tsalteshi Trails

One trail user reported stolen skis recently and multiple signs have been defaced.

At left Bonita Banks, RN, Medication Assisted Treatment (MAT) nurse at Homer Medical Center, and at right, Annie Garay, RN, Community Health Educator, pose for a photo at South Peninsula Hospital on Sept. 27, 2021, at Homer, Alaska. (Photo by Derotha Ferraro/South Peninsula Hospital)
New hospital community health educator starts

Garay, a Homer raised nurse, came home to ride out COVID-19, wound up doing pandemic nursing.

The logo for the Kenai Peninsula Borough School District is displayed inside the George A. Navarre Borough Admin Building on Thursday, July 22, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Montessori school goes to universal indoor masking

As of Tuesday, eight KPBSD schools were operating with universal indoor masking for staff and students.

Commercial fishing and other boats are moored in the Homer Harbor in this file photo. (Photo by Michael Armstrong/Homer News)
Seawatch: Crabbers look at cuts to quotas

Tanner, opilio crab quotas cut on top of cancellation of fall king crab fishery.

Gavel (Courtesy photo)
Judge sides with psychiatrists who alleged wrongful firing

Two psychiatrists said they were wrongfully fired when Alaska Gov. Mike Dunleavy took office.

Most Read