Alaska Supreme Court rejects challenge to state's education funding formula

The Alaska Supreme Court ruled Friday that requiring municipalities to help pay for their local schools does not violate the state constitution, upholding how lawmakers have long financed public education and rejecting a lower court ruling in Ketchikan.

"We're very pleased that the Supreme Court found what it did," said Alaska Education Commissioner Mike Hanley. "I think it's appropriate that there's local buy-in."

The court's ruling came about two years after the Ketchikan Gateway Borough and four residents sued Hanley and the state of Alaska over the required local payments, calling them unconstitutional. If the court agreed with the plaintiffs, the cash-strapped state could have had to supplant more than $230 million in lost school money to just maintain status-quo funding.

But Friday's opinion, written by Justice Joel Bolger, said the school funding system, with local money, had deep roots in history. He said that before Alaska became a state in 1959, the territory and local areas both paid for schools. "The legislature derived the current school funding formula from this pre-statehood program, the framework of which has remained largely unchanged," the opinion said.

The Supreme Court rejected the notion that the payments violated the part of the constitution that bars the state from earmarking revenue from a tax or license for a specific purpose, like education. Delegates at the constitutional convention did not intend for "state-local cooperative programs" to fall under the terms of state taxes or licenses, the opinion said.

This Supreme Court's ruling partially overturned one by Ketchikan Superior Court Judge William Carey, who invalidated the local payments in 2014, calling them dedicated funds.

However, both the Supreme and Superior courts agreed that the required local payments did not violate two other clauses of the constitution -- one concerning the governor's power to veto the money and the other, the Legislature's power to appropriate it.


Sen. Berta Gardner, D-Anchorage, the minority leader and a member of the Senate Education Committee, said Friday that she felt "immensely relieved" after the Supreme Court's ruling, which allows lawmakers to stick with the status quo. She said the state believes in local control and local participation, and with that comes the responsibility of contributing money to local schools.

"The money has to come from somewhere or we short-change our kids and that's definitely going to be a big concern in the years ahead," she said.

But the Supreme Court's decision wasn't a complete slam dunk for the state. While no justices submitted dissenting opinions, Chief Justice Craig Stowers and Justice Daniel Winfree concurred with the majority opinion, but in separate opinions they may have reached a different conclusion if the case was argued differently. The fifth justice, Dana Fabe, did not participate in the case, but didn't say why.

Louisiana Cutler, an attorney for the Ketchikan borough, said Friday that she was disappointed with the Supreme Court's ruling, but added that her clients were reviewing the decision and evaluating their options, noting that the ruling was not completely decisive.

"We think it leaves room for debate as to the ultimate status of the required local contribution," she said.

Under state law, Alaska's boroughs and first-class cities must pay a percentage of their property taxes to their local schools to get state aid. This does not apply to the school districts in the state's 19 unorganized areas, which have no borough governments with the power to levy taxes. However, these areas must pay 90 percent of their federal impact aid to their schools.

Rep. Lynn Gattis, R-Wasilla, a member of the House Finance Committee, said Friday that while the Supreme Court's ruling provides closure, she wants to take a hard look at how much each community is paying for their schools.

"At least we know where we're going, whether I like it or I don't like it," she said.

NEA-Alaska, the state's largest teachers' union, and Great Alaska Schools, a grass-roots school advocacy group, lauded the Supreme Court's decision in statements Friday. Great Alaska Schools said that with state lawmakers unwilling to increase per-pupil funding to keep up with inflation, "it is troubling to even imagine how they would have handled this decision."

Howard Trickey, an Anchorage attorney who wrote a friend of the court brief for Citizens for the Educational Advancement of Alaska's Children, described the Supreme Court's decision as well-reasoned.

"Any other decision would have caused chaos and instability in school funding," he said.

Tegan Hanlon

Tegan Hanlon was a reporter for the Anchorage Daily News between 2013 and 2019. She now reports for Alaska Public Media.