In his recorded remarks to the Alaska Federation of Natives, Gov. Mike Dunleavy gave a campaign speech that touched on the usual topics, including his effort to rebrand himself as a champion of the Power Cost Equalization program.

“Contrary to some claims, my administration is not trying to raid the PCE or end the program. In fact, we have fully funded the PCE program each year and I want the program protected by Constitution, through an amendment that would ensure its survival for generations. The constitutional amendment would also remove it from the politics of the legislative horse trading at the end of each session,” he told AFN Monday.

But the thing is he began his administration with a campaign to get rid of the PCE endowment and force the program to compete with all others for state funds each year.

Dunleavy and former temporary budget director Donna Arduin tried to do away with the $1 billion PCE endowment and a host of other funds in 2019.

“We began on Day 1 of the administration. We started with eliminating budget silos, tearing down those silos,” Arduin told legislators on Jan. 23, 2019.

One of the budget “silos” that Arduin and Dunleavy sought to tear down was the Power Cost Equalization endowment, created by the Legislature to provide a regular revenue source to pay for the rural electric subsidies, estimated at $32 million a year.

“All spending is state spending so all programs should compete for available dollars. So let’s scrutinize those programs that are funded with designated general funds—cuz all money is green,” Arduin said.

Three months after Arduin declared that all money is green, Dunleavy proposed a bill to get rid of the PCE endowment, which was the prime target.

The Legislature refused to comply, but when Dunleavy’s Republican allies in the Legislature blocked the budget, the governor’s crew tried a new tactic.

Two-and-a-half years ago, he eliminated the endowment, an action that was overturned by a super-majority of the Legislature.

The political argument morphed overnight into a flimsy legal theory in which former AG Kevin Clarkson and Arduin claimed the endowment had to be ended to follow the Alaska Constitution.

Clarkson had a habit during his pompous tenure as AG of trying to disguise political gamesmanship with a veneer of legal analysis, losing time after time.

Under the logic Clarkson claimed to be following, all of the savings or investment accounts held by state corporations should be transferred to the Constitutional Budget Reserve, along with the earnings reserve of the Permanent Fund.

This past summer Dunleavy made the policy call to shut down the Power Cost Equalization program for rural Alaska July 1.

After losing a lawsuit about his handling of the endowment, Dunleavy claimed he had welcomed the lawsuit and was pleased with the result.

Dunleavy has long been an opponent of the endowment, seeing it as a pot of money that could be used for other programs.

The idea of putting it into the Constitution was simply an attempt to buy the vote of Sen. Lyman Hoffman in the Senate on putting the dividend in the Constitution, the real goal.

When he served in the Senate, Dunleavy also targeted the PCE endowment.

“We are experiencing a $4 billion hole and there are a billion in this fund. Just a thought as to why wouldn’t we use this fund to at least backfill some of the deficit? I certainly understand the assistance it gives to many of our communities but I am just curious if there is a comment by anyone,” Dunleavy said on April 11, 2016.

A year later, Dunleavy advanced his plan to spend down the PCE endowment with a proposal to withdraw $300 million from the account. “Just to note that that withdrawal is from the endowment and does not curtail or negatively impact the service delivered under the PCE program,” Dunleavy said on Feb. 23, 2017.

In his understated manner, Sen. John Coghill said that spending one-third of the account on other things was a “huge chunk” that would create a problem going forward.

Dunleavy wants AFN and everyone in rural Alaska to forget about his record of trying to get rid of the PCE endowment and use it for political leverage.

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