Alaska Native Regional Corporations: Vetoes ‘will plunge Alaska into a fiscal and social crisis’

The ANCSA Regional Association, which represents the 12 Alaska Native regional corporations, sent a letter critical of Gov. Michael J. Dunleavy’s vetoes to legislators on Wednesday, expressing concern about “the potential harm the proposed cuts will cause to the state’s economy.”

“ARA has long supported and advocated for securing a stable financial future for Alaska; however, the drastic cuts as proposed will plunge Alaska into a fiscal and social crisis.”

The letter, a copy of which was provided to The Midnight Sun, doesn’t explicitly call on legislators to override the vetoes but marks a rare moment when the state’s Alaska Native regional corporations, which rarely wade into politics, speak together in unity.

“Alaska Native regional corporations are united in our position that we do not support the level of proposed budget cuts. This position is not taken lightly, requiring significant deliberation and discussion among our membership, and we collectively want to see our Legislature work cooperatively with our governor,” explained the letter. “There will be further discussions about the state’s budget for FY 20 and beyond; and we expect those discussions will result in state budget reductions. Cuts are necessary but cannot disproportionally impact rural Alaska.”

The Alaska Legislature, with 22 members refusing to return to Juneau, fell short of overriding the governor’s vetoes on Wednesday. However, legislators left the joint floor session open to continue to Thursday so there’s an opportunity for the Legislature to give it another attempt.

The letter from the ANCSA Regional Association specifically addresses the fate of the Power Cost Equalization program. The administration has been tight-lipped about whether it would include the fund, which is used to help Alaskans in rural areas of the state cope with high energy prices, would be liquidated as part of an annual sweep of funds.

The fund, like the Higher Education Investment Fund, was long considered to be outside of the sweep, but Dunleavy broke from precedent and swept the Higher Education Investment Fund earlier this week. It appears that the same has happened to the Power Cost Equalization Fund, at least according to the letter.

“We call upon the Legislature to restore the Power Cost Equalization funds. If PCE dollars are not restored, power costs in rural Alaska will result in large-scale outmigration that will put further social, behavioral, educational and health and safety strains on our urban communities,” explained the letter. “It will also have a catastrophic effect on our rural way of life and lead to an unprecedent loss of our Alaska Native cultures.”

Alaska Native regional corporations were created under the 1971 Alaska Native Claims Settlement Act and serve as business entities, paying dividends and providing other benefits to shareholders and communities. According to a 2018 study, the corporations collectively generate about a quarter-billion dollars in revenue every year largely from work in the mining and oil and gas sectors. Since creation, the companies have generated more than $3 billion in revenue according to the report.

The Letter