A recent report from the University of Alaska Anchorage Institute of Social and Economic Research (ISER) calculated that the state had under-funded borough schools by about $10 million a year under the state Foundation Funding Formula’s area cost differential factor. The borough has estimated the loss at over $100 million over the past decade.
For years, the borough has urged the Legislature to fix the problem, but other than making occasional short-term appropriations, lawmakers have avoided a wholesale rewrite of the formula.
Earlier this year, the borough assembly approved a resolution authorizing a contract with two law firms that will pursue a lobbying effort in Juneau while also preparing a lawsuit against the state. Robertson, Monagle & Eastaugh will do the lobbying, while Jermain, Dunnagan & Owens will handle litigation. If state lawmakers fix the area cost differential this year, a lawsuit would not be filed. If not, the borough assembly would have a prepared lawsuit ready should it wish to exercise the option of going to court.
The assembly made $90,000 available for the effort initially, but members also anticipated that more funding would be necessary. Tuesday, the assembly voted 6-1 to add another $100,000 to the lobby-lawsuit account. That money will be used to complete the first four phases of the project — conducting factual and legal research in support of the case, lobbying the Legislature to change the education funding formula, identifying and contracting with individuals to serve as plaintiffs (the borough itself cannot sue the state) and filing a lawsuit if necessary.
Assembly member Grace Merkes of Sterling voted against the measure. Speaking from Juneau where she is meeting with state lawmakers on the assembly’s behalf, Merkes said a suit could take decisions about what is spent on schools out of the Legislature’s hands.
“I don’t believe a judge or a court should decide how much money should be spent on schools. I am definitely against the suit. I’m not against lobbying, but that’s not what this ordinance says,” she told her colleagues.
The assembly met in executive session during a Tuesday morning meeting where they got an update from representatives of the law firms. Assembly member Gary Superman of Nikiski said he could not discuss particulars about the meeting, but said assembly members were told the lobbying effort was moving forward in conjunction with the research into the suit.
“At this point, the Legislature seems to be moving in the direction of at least addressing the latest ISER report, which states that our district has been short-changed to the tune of $10 million per year,” he said.
The likelihood that the Legislature would adopt figures recommended in the ISER report this year was “fairly non-existent,” Superman said. He added, however, that it was beginning to look possible that lawmakers might approve at least half the ISER number, a big step toward correcting the funding inequities.
Soldotna resident Kevin Austin testified that he had no problem with lobbying but opposed going to court.
“While I don’t disagree with the idea of doing research and lobbying, I do disagree with doing lawsuits,” he said.
“The Legislature is an elected representative governing body, just as yourselves. I believe that by going to court, using one branch of government to force the hand of another branch, in effect takes the people out of the equation. If we want to change the Legislature or direct it to do something different, we should do that through the means of the electoral process.”
Cathy Carrow, a teacher and president of the Kenai Peninsula Education Association, supported the proposed appropriation.
“I think that in terms of the will of the people, we have heard over and over again the public support for our schools and public education, and I do think that it is the will of the people that our schools are funded adequately so that we can provide the programs that we know we need to for our students and our community,” she said.
Carrow called it unfortunate that the borough has been compelled to consider a lawsuit, but called such litigation “important leverage” as a solution to the schools-funding dilemma is sought.
Assembly President Ron Long of Seward said appropriating the $100,000 did not necessarily mean all of it would be spent. The law firms are charging the borough on an hourly basis, he said.
Assembly member Paul Fischer of Kasilof said he believed there would be no need for a lawsuit this year. A tentative contract settlement still to be voted on by Anchorage teachers likely would require the Legislature to come up with a lot more money for the urban district, he said.
“We’re going to be carried along with that,” he said. Fischer added that while he is reserving judgment on actually filing a lawsuit (that decision would be made by the assembly), he saw nothing wrong with expending funds to research a suit.
Mayor John Williams said the attorneys had indicated that a suit could be prepared within the $190,000 already approved. Once a suit is prepared, he said, a decision to move forward to court “would be a whole brand new discussion.”






