The Alaska Supreme Court has upheld Gov. Bill Walker’s partial veto of funds to pay last year’s Permanent Fund Dividend checks, affirming a lower court’s decision against three current and former state lawmakers who challenged it.

A Friday opinion from the state’s highest court ruled against the suit spearheaded by Sen. Bill Wielechowski, D-Anchorage. Wielechowski, along with former legislators Clem Tillion and Rick Halford, had sued Walker and the Alaska Permanent Fund Corp. after Walker’s veto halved 2016 PFD checks from $2,052 to $1,022 to help address the state's budget crisis. The three claimed a transfer of half of the Permanent Fund’s earnings account to a dividend fund shouldn’t have been part of the state’s budget.

Senator Bill Wielechowski called the Supreme Court bitterly disappointing.

"This court decision allows the legislature to set the Permanent Fund Dividend at whatever level it chooses each year or simply eliminate it," said Wielechowski. "It allows the Governor to veto the PFD to whatever level he or she chooses."

Asked if he was considering a run for governor in next year's race, when Walker will seek re-election, Wielechowski said he would consider running if a candidate who shares his values does not emerge.

Wielechowski had appealed Superior Court Judge William Morse’s ruling against the suit in November, in which Morse called funds for the dividend a standard appropriation subject to Walker’s veto.

In its 26-page opinion, the supreme court said the case turned on a “narrow question” stemming from a 1976 amendment to the state Constitution. Wielechowski claimed the amendment, which in part stated that “All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law,” exempted lawmakers’ appropriation of fund income from a clause in the Constitution stating that “[t]the proceeds of any state tax or license shall not be dedicated to any special purpose.”

“Although the superior court did not reach this question, the court’s ultimate conclusion nonetheless is correct: The legislature’s use of Permanent Fund income is subject to normal appropriation and veto budgetary processes," the opinion read.

Wielechowski had also challenged Walker’s power to veto funds from the transfer, claiming he had improperly struck “descriptive language” from the Legislature’s language authorizing the nearly $1.4 billion transfer by reducing the amount. The five-justice court, however, found that state law lets governors reduce or remove appropriations but not “add to or divert” them, and that Walker “validly exercised his constitutional veto authority when reducing the transfer amount.”

But, Governor Walker insists he wants to save the Permanent Fund. He said the decision to veto part of the money allocated for dividend checks last year was difficult but contends the money was needed to put towards the state's multi-billion dollar budget gap.

"I know how it impacts individuals, I know how it impacts families," said Walker. "When we lost 80% of our revenue we had to make some major adjustments across the state."

This year it's legislators who've decided to cap dividends. The court decision affirms that they can. But opponents, like Wielechowski say they're not finished.

"This issue is not going away and we resolved to do whatever is necessary to resolve that Alaskan's dividends are protected," said Wielechowski.

Despite the court ruling, Wielechowski said he doesn't plan to give up the fight. He's sponsored legislation for the last five years that would allow people to vote on a constitutional amendment to protect the Permanent Fund. The bill would have to be passed by two thirds of the legislature before it could go to a popular vote. So far, that hasn't happened.

Alaska's attorney general, Jahna Lindemuth, told the AP that the decision offered greater clarity on the state's use of Permanent Fund income amid its current deficit.