Anchorage homeowners will pay less property tax

Sean Doogan

Even after the Anchorage Assembly added $5.8 million of School District funding to the Anchorage property tax rolls, and another $2.75 million in one-time increases, local homeowners will still see a reduction in their property tax bills for 2014. Mayor Dan Sullivan said that's because the Assembly also voted to pass, and even increase, the administration's suggestion for one-time property tax relief.

That action, combined with an increase in total property value for the Municipality of about $1 billion over last year, means that Anchorage property taxpayers will be charged $53 less per each $100,000 of property value than they were last year. Assuming an average home value in Anchorage of about $300,000, that means a total reduction of $159 from 2013.

The amendment to use only property taxes to pay for $5.8 million of the School District's increase was hotly debated and passed by a narrow 6-5 margin, with Assembly members Paul Honeman, Patrick Flynn, Tim Steele, Dick Traini, Pete Petersen and Elvi Gray-Jackson voting in favor and Assembly members Bill Evans, Bill Starr, Amy Demboski, Ernie Hall and Jennifer Johnston voting against.

The final tally would seem a ripe target for a mayoral veto, as it takes eight votes on the Assembly to override the mayor. But on Wednesday, Sullivan hinted he may not use his veto pen for any of the School District increases.

"I think it would be difficult to have the veto sustained," the mayor said. "As you go back and ask people now that it's already been voted on, and there is an expectation that this is happening, I don't think there would be the votes to sustain a veto, quite frankly."

Sullivan said that after the dust settled from the Assembly meeting and the first quarter budget revisions had been finalized, the city was $6.1 million under the tax cap carried over from last year.

How will ASD use the extra money?

Meanwhile, at the Anchorage School District headquarters, financial officers are working on several scenarios to use the additional $18.75 million the district got for neighborhood and alternative schools from the Alaska Legislature and the Anchorage Assembly.

Another $6.3 million in funding from the Legislature has been designated for Anchorage charter and correspondence schools -- which control their own budgets, independently from the Anchorage School Board, which makes all other district funding decisions.

Before the district learned it would be getting the increases, it had faced a $23 million budget hole, and had planned to cut 143 teaching positions before the start of the next school year, in July. Since some of those cuts could be handled through attrition -- teachers retiring and moving out of the district for other jobs -- the district said it planned to hand out 60 pink slips to local teachers as early as next week.

But some of the money coming into the district from both the state and the city is one-time funding. That means it would not be available next year to pay for any teaching positions saved this time around. Add to that an estimated $20 million-per-year cost of inflation, and the district's chief financial officer, Mark Foster, said the recent increase in school funding won't ensure stability for teaching staff past the end of the 2014-2015 school year, even if all of the increase was used to save teaching positions.

The Anchorage School Board will be hearing several different proposals from ASD staff and taking public comment at its meeting on May 5.

Besides a proposal to use all of the additional funding the district received to save teaching positions, another idea is to use it to stabilize teaching positions.

Foster said that if the district saved only 10 of the proposed 60 teachers set to actually lose their jobs at the end of this school year, it could ensure that the remaining Anchorage teachers would have a job the next year, and the year after that. Foster said the continued fight over funding is a drain on school district staff. Foster said the constant threat -- especially to new and less-experienced teachers -- of facing a pink slip affects the morale of both teachers and students.

Saving only those teaching positions that can be sustained under the next year's budget and the one predicted the year after, Foster said, might make more sense than saving them all for next year and issuing even more pink slips in 2015.

"It's amazing when people don't have to worry or focus on losing their job," Foster said. "That constant threat is pervasive and affects everyone."

Where the money came from and how it adds up

The $18.75 million increase the Anchorage School District is dealing with comes from a combination of state and local sources. It begins with the Legislature's increase of $150 per student to the base student allocation -- a per-pupil amount serving as the basis for a formula determining most of the state's contribution to education funding. Excluding charter and correspondence schools, Anchorage has about 49,000 students in its district. That would seem to indicate the extra funding coming from Juneau to Anchorage should total $7.35 million. But the amount of the increase from the state through the BSA is actually $11.2 million. So why the difference?

The Legislature adjusts student populations upward for each district to add funding for a variety of programs and needs, like special education and English as a second language programs. After the adjustments, the Legislature funded -- through the BSA -- the Anchorage School District as if it had about 75,000 students. Multiply that by $150 per pupil and the increase from the Legislature due to the BSA is about $11.2 million. State lawmakers also added $12.8 million in one-time funding to the Anchorage School District. Running total: now $24 million.

But Juneau lawmakers removed a $7.5 million energy payment the district had expected to get and had already budgeted for. After subtracting that from the new money, the district ends up with almost $17 million in fresh funding from Juneau. But $6.3 million of that was dedicated to correspondence and charter schools in Anchorage (money the district does not control) -- leaving a total of new state funding available to the district of about $10.2 million.

New city contribution to ASD

But the state's contribution isn't the only way Anchorage schools get funded. At its April 28 meeting, the Anchorage Assembly added $5.8 million to schools through the use of property taxes. Another $2.75 million was added in expense reductions to the district from the city. For example, the city will now pick up the $250,000 tab for the district's share of the cost of sending out tax bills. It will also pay the full cost of the district's 18 student resource officers -- police who are stationed in local schools -- an increase of $2.5 million over what the district had expected for the 2014-2015 school year. That brings the total of new contributions from the city to the district to $8.55 million.

Add it all up -- the $10.2 million from the state and the $8.55 million from the city -- and the Anchorage School District gets a total of $18.75 million in additional funding.

How it will actually be spent will likely be decided at the May 15 Anchorage School Board meeting, when members are expected to vote on a final 2014-2015 budget. But even with a majority of its budget hole filled for the upcoming school year, district officials are still worried about the future. The constant roller-coaster of funding and cost increases is troubling and counterproductive, according to Foster.

"It's a constant trade-off between throwing it (the $18.75 million increase in ASD funding) this year and having to lay off teachers and ask for inflation money next year again and compromising so you can provide some sort of stability over a two-year cycle," Foster said.

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Alaska Dispatch