Judge invalidates part of school funding mechanism

By Mark Thiessen

The Associated Press

ANCHORAGE — A superior court judge has invalidated the state of Alaska’s requirement that local school districts help pay for education, which could leave a cash-strapped state on the hook for more than $220 million in additional funding statewide.

Judge William Carey ruled the contribution is a dedicated fund, which violates the state constitution’s provision that no state tax or license will be earmarked for any special purpose. 

Carey ruled in the case Friday, but copies of the decision weren’t available online from the Ketchikan court. The state Department of Law distributed copies of the decision Monday.

Under state statute, districts must pay a certain percentage of its taxable real and personal property for its share of local school districts. For Ketchikan, that amounted to about $4 million in 2013.

“We are disappointed with the superior court’s decision invalidating the local contribution requirement for school funding. The state maintains that because the local contribution is simply the borough’s share of the cost of educating its students and because the local contribution is funded with borough revenue, the local contribution is not a source of state revenue and is not subject to the dedicated funds provision,” the Alaska attorney general’s office said in a statement.

Carey wrote in his opinion that the required local contribution, or RLC, consists of public revenues.

“It is hard to conceive of a way, and the state does not propose any, whereby a municipal district could raise the funds necessary to fulfill its RLC obligation without resorting to taxes,” he wrote.

Lawyers for the state continue to evaluate the decision and any appeal options.

“We’re looking forward to the future,” Ketchikan Gateway Borough Manager Dan Bockhorst told The Associated Press on Monday. “We feel what Judge Carey decided was a major victory for the borough.”

For the 2013-14 academic year, the state Department of Education distributed about $1.4 billion to districts, of which about $222 million came from local contributions.

Gov.-elect Bill Walker takes office next Monday, and is already facing a $3 billion shortfall because of lower oil prices. He campaigned on a promise to cut the budget across-the-board by 16 percent.

An education department spokeswoman said funding is up to the Alaska Legislature, which convenes in January.

School funding was hotly contested during the last legislative session. While lawmakers flirted with changes to funding calculations and with raising the required local contribution, they ultimately decided to study how the state funds schools and further delve into the issue later.

A bill to scrap the required local contribution, from Rep. Tammie Wilson, R-North Pole, failed to gain traction.

The Ketchikan Gateway Borough sued in January, arguing the required local contribution for schools is unconstitutional. The borough also claimed the mandated payment violated the Legislature’s appropriation powers. Carey didn’t find for the borough on that provision, however, since boroughs bypass the state treasury and give the money directly to local districts.

The Fairbanks North Star Borough filed a friend of the court brief in support of its fellow borough.

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