House passes bill to protect higher education funding

Bills aims to protect scholarships from annual ‘sweep’ debate

The Alaska House of Representatives Thursday passed a bill to protect the state’s Higher Education Investment Fund from an annual budgeting process known as “the sweep” in an effort to provide stability for the fund’s programs.

Programs funded by HEIF include the Alaska Performance Scholarship Program, which provides scholarships to Alaska high school students to attend the University of Alaska, and the Washington, Wyoming, Alaska, Montana, Idaho Program at the University of Washington School of Medicine — the state’s only doctor training program.

The status of the fund has been a point of contention since Gov. Mike Dunleavy’s administration in 2019 stated HEIF was subject to “the sweep,” an accounting mechanism that annually empties certain accounts into the state’s Constitutional Budget Reserve. Students sued the administration in a lawsuit funded by the University of Alaska but in February an Anchorage Superior Court ruled in favor of the administration. That decision was appealed, but in his decision, Judge Adolph Zeman noted the Legislature had the authority to establish the fund outside sweepable funds.

House members voted 23-8, with eight absences, in favor of House Bill 229 which would establish the fund within the Alaska Student Loan Corp., an investment account to provide funding for HEIF programs. When the House passed its operating budget bill on April 9, it included $359 million for the fund.

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“Alaska’s youth shouldn’t have to worry that the scholarships and programs they need to become our next generation of doctors, nurses, scientists and business leaders are arbitrarily on the chopping block each year,” said Rep. Andy Josephson, D-Anchorage, the bill’s main sponsor.

UA President Pat Pitney has urged lawmakers to pass bills protecting the HEIF and on social media Thursday said the fund was the most important source of higher education money for Alaska students.

The bill moves HEIF under the umbrella of the Alaska Student Loan Corp., Josephson’s sponsor statement for the bill stated, and asks the corporation to create a subsidiary for the express purpose of managing the HEIF assets. The subsidiary will be modeled after the Alaska Capital Receipts Corporation held by the Alaska Housing Finance Corporation, according to the statement.

Members of the Alaska House majority voted in favor of the bill and were joined by House Republican Minority members Reps. James Kaufman, Anchorage; Bart LeBon, Fairbanks, and David Nelson, Anchorage.

The bill now goes to the Senate where a similar bill is being considered but the constitutional end of the legislative session is in mid-May. Because this is an election year, if the bill doesn’t pass both bodies it will have to begin the legislative process from the beginning.

The vote to reverse the sweep requires a three-quarter vote in each body, and when the House passed the operating budget earlier this month it failed to achieve the necessary votes. A similar situation occurred in 2021 and it took lawmakers more than one special session before the situation was resolved just before the state’s new fiscal year begins on July 1.

If the bill is signed into law before the end of the state’s fiscal year, funds for HEIF will not be subject to the sweep.

Lawmakers went through four special sessions last year, the most in the state’s history, but 2022 is an election year and lawmakers are not allowed to campaign while the Legislature is still in session which could encourage quicker action.

• Contact reporter Peter Segall at Follow him on Twitter at @SegallJnuEmpire.

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