School bond battle divides legislators and Anchorage delegation as vote looms

JUNEAU -- As the Alaska Legislature has specifically tried to target Anchorage's Tuesday vote on school bonds, the debate over a bill to block reimbursement of the bonds has revealed divisions in both the Legislature and the big Anchorage delegation.

The Anchorage School District has "cashed in" on the state's debt reimbursement program, said House Majority Leader Charisse Millett, R-Anchorage, while at the same time winding up with millions of dollars in surpluses in nine of the last 10 years, she said.

And, she said, the district was budgeting more for its capital projects than they actually cost.

There had been, she said, a "scathing" audit of the district's capital projects.

"Our school districts need to take ownership of their fiscal crisis at hand, and take a good, long look at what projects are affordable to bond in these lean times," she said.

She urged fellow legislators to suspend the debt reimbursement program and to make it retroactive to include her hometown.

Anchorage School District's Mike Abbott said the district doesn't have "surpluses" but does try to budget for an ending balance to account for unexpected expenses. State law prohibits school districts from building up big reserves, he said, so any ending balance is included in the following year's budget.


Fellow Anchorage Rep. Les Gara, a Democrat, tried to keep Anchorage political battles out of the school construction decisions.

"Whatever anger you have about the adults in the Anchorage School District, don't take it out on the kids," he responded after Millett's impassioned speech about the district.

"I'm not angry," Millett responded several times, and praised the education that both she and her children had received in Anchorage schools.

With Senate Bill 64 getting backing from powerful legislators in both the Senate and the House of Representatives, it sailed through both bodies, winning passage with strong majorities in each.

Then, it mysteriously stalled.

"We haven't gotten the bill yet," said Grace Jang, press secretary for Gov. Bill Walker.

Walker had been prepared to sign it, she said, meaning Anchorage voters would have known by election day whether the state would reimburse their bonds.

But the Legislature never transmitted the bill to Walker, so he was unable to sign it.

But during the House vote, while Senate Bill 64 passed easily, the leaders there failed to muster the necessary two-thirds to approve the clauses in the bill making it retroactive to before the Anchorage election.

Rep. Steve Thompson, R-Fairbanks, said last week that negotiations with Democrats aimed at reaching the two-thirds margin needed for retroactivity showed promise, though they ultimately failed.

The two key legislators behind the bill, both co-chairs of their respective finance committees, Sen. Anna MacKinnon, R-Anchorage, and Thompson, declined to be interviewed Monday about the holdup.

MacKinnon said after the House vote last week that legislators still hope to find a way not to pay reimbursement for the Anchorage bonds, but it was nothing specific about Anchorage, where she lives.

"Certainly we're not trying to target Anchorage in any way," she said.

When Senate Bill 64 was rewritten to be retroactive, it was so that Anchorage didn't get an unfair advantage and get a last bonding opportunity that other communities were denied, she said.

She said she's still looking for a way to deny payment of the bonds, in the event they are approved by Anchorage voters Tuesday.

That may be through the budgeting process, she said.

"The Legislature has the ability to short-fund the debt reimbursement payment, so that's an option available," she said.


But a legislative attorney has warned that making the bill retroactive could be a violation of the constitutional prohibition on impairment of contracts, unless it was passed and signed before Tuesday's election.

"If the bill passes both houses of the Legislature by a 2/3 majority vote and the governor signs the bill into law before the Anchorage election, the bill would take effect immediately under Sec. 9 of SB 64 and there would be no impairment of existing contracts," wrote Kara Glover, a legislative attorney, to MacKinnon. Glover's opinion was provided to all legislators.

The role of the state's largest city having a $59 million bond election while the legislative session is ongoing has made it uncomfortable for some legislators, they said.

Rep. Lance Pruitt, R-Anchorage, said he has family members who work for the Anchorage School District.

"I have family members that work there, who I have dinner with, and I'm pretty sure this will be a topic of conversation," he said.

The bonds can still be issued, Pruitt said, but will simply cost a little bit more if they are not partially reimbursed by the state. But Anchorage shouldn't be given a last chance at a bond reimbursement that others wouldn't get.

"We've got to make tough decisions. We can't carve out one community over another," he said.