State legal experts differ on who controls $1.25B in federal COVID-19 funding

Gov. Mike Dunleavy talks to reporters at a press conference in Juneau on Feb. 19, 2020.
Gov. Mike Dunleavy talks to reporters at a press conference in Juneau in February. On Tuesday, he said Alaska Attorney General Kevin Clarkson has advised him on the ability to use federal CARES Act funding to offset money Dunleavy vetoed from the budget. (Photo by Skip Gray/KTOO)

The Alaska Legislature’s top legal adviser says Gov. Mike Dunleavy probably doesn’t have the authority to spend federal funding through the CARES Act on most of the items he vetoed in the state budget.

And Legislative Legal Services Director Megan Wallace told the House Finance Committee on Wednesday that Dunleavy won’t be able to spend much of the more than $1.25 billion dollars in CARES Act funding without the Legislature approving it.

She said it may take the Legislature reconvening to resolve the issue.

“If we want to take out the speculation or confusion about the authority to expend those monies … the simplest thing to do would be for the Legislature to specifically appropriate the $1.25 billion,” she aid.

Dunleavy, a Republican, announced when he vetoed more than $200 million from the state budget that he planned to replace the funding for most of the vetoes with CARES Act funds. He said during a briefing on Tuesday that Alaska Attorney General Kevin Clarkson advised him on the issue.

Attorney General Kevin Clarkson reads summaries of three constitutional amendments proposed by Gov. Mike Dunleavy to reporters at a press conference in the Capitol in Juneau on Jan. 30, 2019.
Attorney General Kevin Clarkson at a press conference in the Capitol in Juneau on Jan. 30, 2019. (Photo by Skip Gray/KTOO)

“Our attorney general has given us guidance after looking at the CARES Act and the language in the CARES Act, and from the discussions we’ve had with individuals in Washington, it’s our understanding that we can use the CARES Act for anything that’s coronavirus-related — the impacts and expenditures,” Dunleavy said. “This includes our municipalities, who have been devastated by the coronavirus.”

The Legislature has given the administration open-ended authority to accept federal funds for the Division of Public Health emergency programs to respond to COVID-19 through June. And the Legislature allowed Dunleavy to spend up to $10 million from the state’s disaster relief fund.

But it hasn’t budgeted money for the state to respond to the pandemic’s effect on the economy.

Six Democratic senators sent Dunleavy a letter on Tuesday asking him to explain the basis for his position on the CARES Act spending.

“The constitution very clearly gives the Legislature the power of appropriation,” said Anchorage Sen. Bill Wielechowski. “And the governor does not have the ability to unilaterally decide where the $1.25 billion from the federal government gets appropriated.”

Anchorage Republican Sens. Cathy Giessel and Natasha von Imhof have sent a letter to U.S. Treasury Secretary Steven Mnuchin asking him whether Dunleavy can spend money on items he vetoed from the budget that aren’t related to COVID-19.

The federal government is expected to provide more guidance to states this week on how they can spend the money.

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