Anchorage schools, state split on whether April bond will be reimbursed

The Anchorage School District contends that the Alaska Legislature sent a clear message to Anchorage voters in early April that a $59.3 million school bond on the ballot would be eligible for a long-running state reimbursement program.

But the Walker administration says assertions by legislators and others that the April 7 ballot measure would be exempt from the new school bond reimbursement moratorium were wrong. The state says it cannot reimburse the district for an estimated 64 percent of the projects at eight Anchorage schools because of the new law, which means the cost would fall entirely on the taxpayers of the Municipality of Anchorage.

Without reimbursement, the latest school bond means a tax increase of about $14 per $100,000 of assessed value for Anchorage property owners. With reimbursement, the increase would be about $5.60 per $100,000 of value, the district said.

The controversy stems from a question of timing.

Legislative leaders, trying to cut state spending, opted to put a bill on the fast track in late March to end the practice of paying for either 60 percent or 70 percent, depending upon the project, of the cost of school bond measures by municipalities.

In multiple presentations to committees, a staff member to Sen. Anna MacKinnon, R-Eagle River, said that if the bill were to pass both houses of the Legislature and be signed by Gov. Bill Walker by April 7, the date of the election, Anchorage would be included in the moratorium, along with other municipal entities that normally hold elections in October.

But Anchorage would qualify for the reimbursement program this time around if the measure didn't win final approval until after the election or if it did not carry an immediate effective date, legislators said.


The Legislature transmitted the moratorium bill to Walker at 1:01 p.m. April 7, Election Day, according to legislative records. Casting further doubt on the applicability of the moratorium for that election was the rejection by the House five days earlier of a measure to make it effectively immediately upon passage. The Senate approved the bill March 25, while the House signed off on April 2.

During the legislative debate, lawmakers on both sides of the issue said rejection of the immediate effective date, in favor of the normal 90-day wait, would allow the Anchorage bond to be eligible for reimbursement.

Arguing for the moratorium, Wasilla Republican Rep. Mark Neuman said an immediate effective date was needed to make the reimbursement restriction apply to Anchorage. "With the effective date clause in there, what that would do, was again make Anchorage just like every other school district in the state," he said. The state could save about $2 million a year for the next 20 years with an immediate effective date.

Mike Abbott, chief operating officer of the Anchorage School District, said school officials interpreted such statements by legislative leaders to mean that a provision in the bill saying it was retroactive to Jan. 1 of this year would not apply to the Anchorage election.

"Our assumption has been and we're certainly moving forward as if the 2015 school bond will be eligible for reimbursement," Abbott said in a phone interview Wednesday. "We'll be working with the state to ensure that Anchorage property taxpayers get the benefit of debt reimbursement for that."

The Anchorage School Board approved the bonds last September, the Anchorage Assembly followed in November and the Alaska Department of Education approved the application in December, he said.

The school district summarizes the situation this way on its website: "A bill normally takes effect 90 days after it is signed by the governor but bills can have different or even retroactive effective dates if approved by a two-thirds majority in both houses. SB64 has an immediate effective date provision and language in the bill attempting to make it retroactive to Jan. 1, 2015, which would mean that the April bonds would not be eligible for reimbursement. However the House failed to get the required two-thirds vote on the immediate effective date provision. There is also a legal question whether the Legislature can change the rules after a public vote by the citizens of Anchorage."

The Walker administration says there is not a legal question and the reimbursement won't be coming, because the provision in Senate Bill 64 that makes it retroactive to Jan. 1 forbids the state from paying back the Municipality of Anchorage.

Some will see this as both a political and legal matter. The political side is that some legislators made comments -- reported in the news -- that led voters to think the reimbursement was possible or probable. On the other hand, annual appropriations are always subject to legislative approval and lawmakers have the ability to refuse to appropriate the funds, placing the entire burden on local taxpayers. That was also spelled out in the bond ballot language.

The legal debate is founded on the notion that the political statements may have been in error, but the law and court precedent are what counts.

A 1992 Alaska Supreme Court decision held that even when an effective date clause fails in the Legislature, a bill -- which must have a majority vote to become law -- may contain retroactive provisions. "The failure of the effective date clause does not change the date of retroactive application," Attorney General Craig Richards said in a letter to Walker April 16. "Whether the bill takes effect immediately or 90 days after signature by the governor, the date of retroactive application remains the same."

Walker said he regretted the confusion that surrounded the approval of the bill and allowed it to become law, but without his signature.

In a letter to Senate President Kevin Meyer and House Speaker Mike Chenault, Walker said the news coverage showed that "some members of the public thought the failure of the immediate effective date also meant failure of the provision on retroactive application. This confusion is understandable. So while the bill is legally sound, and even though I support efforts to reduce our state's budget, including debt service, I would prefer that this have been done in a manner more understandable for Alaskans."

Anchorage Democratic Rep. Andy Josephson said he thinks the Municipality of Anchorage should push for reimbursement and cites the arguments by legislators who believed the effective date vote was a critical issue. He also said that advance voting was taking place before the Legislature approved the bill and the handling of this issue interfered in the electoral process. "I would fight like hell. That's that I would do," he said.

On the other hand, Anchorage Democratic Sen. Berta Gardner said she doesn't think Anchorage has a case "and although the bonds passed, they are not obligated to move forward with the projects. If they choose to do so in whole or in part, they should do so knowing they will not get state reimbursement."

Abbott said the schedule remains the same and that reimbursement would not be due for another year or so after the bonds are sold and the projects take shape. He said the school board has been informally briefed on the matter.

Dermot Cole

Former ADN columnist Dermot Cole is a longtime reporter, editor and author.