ANCHORAGE ­– Gov. Bill Walker illegally vetoed Alaska Permanent Fund earnings that were required to be transferred to dividends, a lawsuit filed Friday by a state senator and two former state senators claims.

Facing a multibillion-dollar deficit, Walker in June cut in half the annual checks that

give all residents a share of the state's oil wealth. He kept enough money in place to award qualified Alaskans a $1,000 payout rather than an anticipated $2,100 check.

That simply is not legal under the legislation that created the fund, said Democratic state Sen. Bill Wielechowski, of Anchorag...