FILE - In this Oct. 18, 2018, file photo, then-Alaska Gov. Bill Walker addresses delegates at the annual Alaska Federation of Natives conference in Anchorage, Alaska. Former Alaska Gov. Walker, who was one of the country’s few politically unaffiliated governors, plans to discuss with students bridging the political divide during an upcoming, on-campus residency at Harvard University. (AP Photo/Mark Thiessen, File)

FILE - In this Oct. 18, 2018, file photo, then-Alaska Gov. Bill Walker addresses delegates at the annual Alaska Federation of Natives conference in Anchorage, Alaska. Former Alaska Gov. Walker, who was one of the country’s few politically unaffiliated governors, plans to discuss with students bridging the political divide during an upcoming, on-campus residency at Harvard University. (AP Photo/Mark Thiessen, File)

Alaska Supreme Court rules bonding plan is unconstitutional

The court said the Legislature-approved plan is “unconstitutional in its entirety.”

  • By BECKY BOHRER Associated Press
  • Wednesday, September 9, 2020 2:30am
  • NewsState News

BECKY BOHRER

Associated Press

The Alaska Supreme Court last Friday rejected as unconstitutional former Gov. Bill Walker’s proposal to use bonding to pay Alaska’s oil and gas tax credit obligations.

The court, in a written ruling, said the plan which was approved by the Legislature in 2018, is “unconstitutional in its entirety.”

The bill passed by lawmakers approved the creation of a new state corporation that would be empowered to sell up to $1 billion in bonds to pay off remaining tax credit obligations. The Legislature previously voted to end the tax credit program geared toward small producers and developers, saying that the program had become unaffordable.

The state constitution limits the power to incur state debt. But a 2018 legal opinion by then-Attorney General Jahna Lindemuth said the proposed bonds would not be considered state debt subject to the constitutional restraints because they would be “subject-to-appropriation” bonds and contingent upon annual legislative appropriation decisions.

Superior Court Judge Jude Pate dismissed the lawsuit brought by resident Eric Forrer, who had challenged the bonding plan. Forrer appealed.

The Alaska Supreme Court, in its decision, said subject-to-appropriation bonds are “contrary to the plain text of the Alaska Constitution and the framers’ intent.”

“If the State intends to utilize financing schemes similar to HB 331 in the future, it must first seek approval from the people — if not through a bond referendum then through a constitutional amendment,” the opinion states. HB 331 refers to the bonding bill.

Joe Geldhof, an attorney for Forrer, said “the real winner here” is Alaska’s constitution and the citizens of the state who won’t incur “needless debt based on a scheme.”

An email seeking comment was sent to the state Department of Law.

More in News

Courtesy Photo / Office of Gov. Mike Dunleavy 
                                Gov. Mike Dunlevy speaks at a news conference on Aug. 18.
State says additional unemployment payments are coming soon

People will receive the extra $300 payment for each week filed if eligible to receive $100 or more.

COVID-19. (Image via CDC)
State reports 5 new COVID-19 cases on central peninsula Wednesday

The tally includes a case associated with Soldotna High School.

Homer Farmers Market: The market has reached the end of the season

Last staffed Market is Saturday; no Harvest Party will be held

Clara Stading, a junior, is this month’s recipient of the Flex Phoenix Award given out by Homer Flex School. (Photo courtesy Ingrid Harrald)
Flex Phoenix Award winner: Clara Stading

With school back in session for the year, Homer Flex School has… Continue reading

Ninilchik Fire Chief David Bear moves the fire truck out of the new Ninilchik Emergency Services building on Aug. 9, 2014, to make room for visitors to the open house of the new NES building. (Homer News file photo)
Proposition 1: What you need to know

Ninilchik, Anchor Point voters to decide on combined fire and EMS service area

200 show up for ‘We the People’ rally

Trump event held at Land’s End

New city manager settles into role

Homer’s new city manager, Rob Dumouchel, has been settling in with over… Continue reading

A sign by the Homer Chamber of Commerce and Visitor Center shows where to vote on Aug. 21, 2018, for the Diamond Ridge, Homer, Alaska, precinct. (Photo by Michael Armstrong/Homer News)
Absentee in-person voting for October election has started

When, where and how to vote in the Oct. 6 municipal election

Most Read