Alaska Superior Court Judge William Morse gestures while questioning  Sen. Bill Wielechowski, D-Anchorage, during a hearing Thursday, Nov. 17, 2016, in Anchorage, Alaska. Morse ruled against Wielechowski, who sued the state along with two former lawmakers, contending Gov. Bill Walker didn't have the authority to reduce this year's Alaska Permanent Fund dividend. (AP Photo/Mark Thiessen)

Alaska Superior Court Judge William Morse gestures while questioning Sen. Bill Wielechowski, D-Anchorage, during a hearing Thursday, Nov. 17, 2016, in Anchorage, Alaska. Morse ruled against Wielechowski, who sued the state along with two former lawmakers, contending Gov. Bill Walker didn't have the authority to reduce this year's Alaska Permanent Fund dividend. (AP Photo/Mark Thiessen)

Judge: Walker had authority to cut Alaska dividend amount

JUNEAU — A state court judge ruled Thursday that Gov. Bill Walker had the authority to reduce this year’s Alaska Permanent Fund dividend, siding with the state in the politically charged case.

Superior Court Judge William Morse’s decision followed arguments presented by both sides in Anchorage on Thursday morning.

Morse said he expected the issue ultimately to be decided by the Alaska Supreme Court. State Sen. Bill Wielechowski, one of the plaintiffs in the case, said he planned to appeal.

The lawsuit, brought by the Anchorage Democrat and two former lawmakers, argued the Alaska Permanent Fund Corp. was obligated by law to make available nearly $1.4 billion from the fund’s earnings reserve for dividends, in spite of a Walker veto reducing that amount.

The veto reduced the dividend to $1,022, roughly half of what it otherwise would have been. The plaintiffs wanted the rest restored.

Attorneys for the state had pushed back on the argument that dividend payments are supposed to be automatic, saying that would remove control of spending state money from lawmakers and eliminate the governor’s ability to limit spending. They said Walker properly exercised his veto authority.

Morse frequently interrupted and picked at Wielechowski’s arguments, at one point, incredulously stating: “I mean, come on. You can’t seriously say that.”

In a ruling issued from the bench, Morse said the governor has tremendous power over spending in Alaska, noting it takes three-fourths of the Legislature to override a veto on a spending item. If there was any intent to eliminate or change a governor’s role in spending permanent fund earnings that would have been expressed, he said. But it wasn’t, he said.

Dividends come from the earnings of the permanent fund, Alaska’s oil wealth nest-egg, and are annually paid to most Alaskans. The fund’s principal is constitutionally protected.

Walker has defended his decision to cut this year’s dividend as necessary as the state struggles with a multibillion-dollar deficit spurred by chronically low oil prices. He sees use of permanent fund earnings as critical to helping fill the gap.

But the use of permanent fund earnings — and any talk of capping the dividend — remains a politically thorny issue.

One Republican senator, Mike Dunleavy of Dunleavy, said last month that he intended to introduce legislation to restore the portion of the dividend vetoed by Walker.

After the court hearing, Wielechowski said the case was always expected to go to the Supreme Court. “We think the legislative history is clear, that it was the intent to allow for dedication of funds to do a dividend,” he said.

Attorney General Jahna Lindemuth said the state was confident in the advice it had given the governor and was pleased with Morse’s decision. “We look forward to seeing what the Supreme Court does with this case,” she said.

More in News

(Juneau Empire file photo)
Aurora forecast through the week of Nov. 3

These forecasts are courtesy of the University of Alaska Fairbanks’ Geophysical Institute… Continue reading

Senate President Gary Stevens, R-Kodiak, speaks to members of the Senate majority caucus’ leadership group on Friday, April 12, 2024. (James Brooks/Alaska Beacon)
Education, energy and elections among priorities of Alaska Senate’s post-election agenda

Senate’s previous bipartisan majority will continue, albeit a bit smaller, after election.

A statue of William Henry Seward stands outside the Dimond Courthouse in downtown Juneau. (Clarise Larson / Juneau Empire file photo)
Juneau man gets 18-year prison sentence for sexual abuse of a minor

Craig Foster, 63, pleaded guilty to charge involving girl between 9 and 11 years old.

(Michael Penn / Juneau Empire file photo)
Police calls for Wednesday, Nov. 6, 2024

This report contains public information from law enforcement and public safety agencies.

(Michael Penn / Juneau Empire file photo)
Police calls for Tuesday, Nov. 5, 2024

This report contains public information from law enforcement and public safety agencies.

(Michael Penn / Juneau Empire file photo)
Police calls for Monday, Nov. 4, 2024

This report contains public information from law enforcement and public safety agencies.

Rep. Bryce Edgmon, I-Dillingham, speaks in favor of Senate Bill 48, the carbon credits bill, on Tuesday, May 16, 2023, in the Alaska House. At background is Department of Resources Commissioner John Boyle and staff supporting the bill. (James Brooks/Alaska Beacon)
Alaska House control flips from predominantly Republican coalition to mostly Democratic coalition

Preliminary election results show the new House majority will have at least 22 members.

West Juneau homes on Douglas Island late Thursday afternoon. (Mark Sabbatini / Juneau Empire)
What will Trump as president again and a more liberal Alaska Legislature mean for Juneau?

Election appears to shake up federal and state governments in different ways, leaving lots of unknowns.

Most Read