Alaska court hears dispute over oil-wealth fund checks

JUNEAU, Alaska (AP) — An Alaska lawmaker made one last legal push Tuesday to put about $1,000 back in the hands of nearly every state resident for their share of Alaska's oil wealth.

Sen. Bill Wielechowski argued before the Alaska Supreme Court in Anchorage that Gov. Bill Walker last year exceeded his authority when he reduced the size of the yearly checks by about half.

Wielechowski, an Anchorage Democrat, hopes to reverse the governor's action after losing in superior court in November. He was peppered with questions by justices during his arguments Tuesday.

The Supreme Court did not issue an immediate ruling.

Walker, a Republican-turned-independent, last year cut the amount available for Alaska Permanent Fund dividend checks after lawmakers failed to agree on a plan to address the state's multibillion-dollar deficit. The state, which relies heavily on oil revenue to fund government services, has been using savings to plug the hole, which Walker says is not sustainable.

Wielechowski, who was joined by former legislators Rick Halford and Clem Tillion in the lawsuit, argues the Alaska Permanent Fund Corp. was required by law to make available nearly $1.4 billion from the fund's earnings reserve for dividends, despite Walker's veto.

The state contends that funding for dividends is not automatically transferred but subject to appropriation — and that appropriations are subject to the governor's veto power. Having money spent on "auto-pilot" is not done, said Kate Vogel, an attorney for the state.

The case is politically charged, coming as lawmakers weigh a major shift that could turn the fund into an endowment and change the dividend program.

"I consider any attack on the permanent fund something that I have to go to battle over," Tillion said in an interview Monday.

In 1976, shortly before oil began flowing through the trans-Alaska pipeline, voters approved creating the permanent fund, a nest-egg of sorts borne of oil revenues and grown over time through investments.

The state later created the dividend program, which provides most Alaskans with an annual check based on a rolling average of the fund's performance.

The fund's principal is constitutionally protected. Its earnings can be spent. Traditionally they have been used to pay out dividends and to protect the fund against inflation.

With the state facing ongoing deficits amid low oil prices, lawmakers are weighing using a portion of fund earnings to help cover government costs and initially limiting the size of the dividend that Alaskans receive.

Alaskans must meet residency requirements to be eligible for dividends.

Last year's dividend was $1,022 for each eligible resident. It would have been around $2,100 if not for Walker's veto, Wielechowski has said.

Checks have ranged from $331.29 in 1984 to $2,072 in 2015, according to the state's permanent fund dividend division.