Gov. Mike Dunleavy failed to veto a $4 billion transfer from the Permanent Fund earnings reserve to the principal of the fund before signing the budget into law.

Congratulations to the Legislature and Dunleavy are in order. This is the best action taken during his term. The Legislature acted intentionally and while the governor acted accidentally, the result is the same—a long-term investment in the future of Alaska.

Boosting the principal of the fund this way is a sensible step to protect and increase the value of the fund—building a renewable source of money that will help Alaskans now and in the future. The Legislature voted for the transfer. Dunleavy accepted it. And it is now law.

The Anchorage Daily News has the best coverage of the $4 billion boo-boo. Sitka Sen. Bert Stedman, the leading legislative authority on state finances, has been the chief proponent of saving more. He said that accident or not, the deed is done and it will pay off in perpetuity.

The House majority met Saturday and came to the same conclusion. “We are going to let it stand,” Rep. Ivy Spohnholz told the Daily News.

The best comment was from Rep. Andy Josephson, “Someone screwed up, and I believe it’s for the benefit of Alaskans.”

The principal or corpus is the portion of the Permanent Fund that must be placed in income-producing investments. It cannot be spent.

The earnings reserve is the portion of the fund that can be spent on whatever the Legislature chooses—dividends, government operations, capital projects, loan programs, etc.

We should be doing whatever we can to push the principal higher—saving $4 billion more will probably add $200 million to $400 million in earnings in perpetuity, decreasing the need for future taxes.

The proof that this transfer is now law can be found on page 138 of the budget Dunleavy signed, lines 29 and 30: “The sum of $4,000,000l,000 is appropriated from the earnings reserve account (AS 37.13.145) to the principal of the Alaska permanent fund.”

Dunleavy signed the budget on Wednesday, June 30, the last day of the fiscal year, and posted a video of himself doing so, but he refused to reveal what vetoes he made in the document and what portions he allowed to become law. The package of his vetoes can be found here.

On Thursday, July 1, Dunleavy told Alaskans that he had vetoed the $4 billion transfer. He was apparently unaware that he allowed the transfer to take place by mistake the day before.

“There was a decision by the Legislature to move billions of dollars from the earnings reserve of the Permanent Fund into the corpus of the Permanent Fund. We stopped that from happening with a veto. We want to be able to have the greater discussion with the Legislature here in a month to come up with a comprehensive approach to dealing with the Permanent Fund,” Dunleavy said at his July 1 press conference.

“And so we see this money as part of that discussion to see how, where that’s gonna fall, where that’s gonna go, once we get a permanent fix in place in dealing with the Permanent Fund.”

Too late. Dunleavy sees the Permanent Fund as a means to getting re-elected. His inability to think of the long-term future, however, has been neutralized to some extent by his error.

It’s not clear when the administration discovered the $4 billion mistake. On Friday, July 2, the governor tried to reverse his move but “legislative clerks weren’t willing on Friday afternoon to accept a correction to the veto error, saying that it went beyond a minor mistake,” as the Daily News reported.

He sent a nearly unintelligible letter to leaders of the Legislature under the guise of erasing his mistake. In his letter, he did not admit that he had failed to veto the $4 billion. He said he intended to veto the money.

The governor’s public relations experts chipped in, trying to confuse the press and public with a level of deceit worthy of North Korea: “The governor did not forget to veto the $4 billion transfer to the corpus to the Permanent Fund,” they lied.

Here is the full statement, as reported in the Alaska Landmine and elsewhere. It would have been more convincing to say, “The Legislature ate my homework.”

It was not a “Scribner’s error,” as the governor’s press agent claimed. Scribner’s is a publisher.

It was not even a “scrivener’s error,” the correct spelling. A scrivener’s error is a typo or a legislative drafting mistake. A scrivener’s error is not a situation in which a governor fails to cross off a $4 billion appropriation by mistake.

Dunleavy will insist that he did not forget to veto the $4 billion, but the documents are more reliable than his words. He didn’t cross out the two lines and didn’t initial the change.

We should all be thankful that he forgot.

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