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Plan to offer tax credit funds to Alaska private schools emerges

  • Author: Pat Forgey
  • Updated: September 28, 2016
  • Published April 7, 2014

JUNEAU -- The critics are calling it "voucher-lite," an attempt to send state money to private and religious schools that's now part of Gov. Sean Parnell's education bill, which includes additional school funding.

Parnell supports a constitutional amendment allowing public money to go to non-public schools, including religious schools. Supporters call that school "choice," while opponents call those school "vouchers."

It appears that constitutional amendment will have difficulty passing the Legislature, despite the fact that Republicans outnumber Democrats 39 to 21. But the House Finance Committee added a provision to Parnell's House Bill 178 allowing the state to pay some private school costs by offering businesses credits on their corporate income taxes, mining licenses or fish taxes.

Some Democratic critics are challenging both the wisdom and legality of the proposal.

Rep. Sam Kito, D-Juneau, said that public money should only go to public schools. "In public schools we have guidelines and standards in statute," he said, "and our school districts with school boards that make sure that students that are coming out of those schools are ready for career or college."

Providing the funding through a tax credit is no different than a direct appropriation, he said. "It's still funding that would normally go into the state treasury, which means, in a way, that it is public funding supporting private education."

Rep. Andy Josephson, D-Anchorage, a former teacher, said what the House was trying to do simply wasn't allowed under the Alaska Constitution and subsequent Supreme Court decisions.

Noting that his wife was a 28-year teacher at a Lutheran school, he called the work private schools do "fantastic, but it is not constitutional" to fund them with public dollars.

The Department of Revenue declined to speculate on how much private school tax credits would cost the state.

"It is difficult to determine the effect this bill will have on taxpayer behavior and, therefore, it is difficult to determine if this bill will affect revenue," the bill's fiscal note, the department's official cost estimates, said.

The fiscal note pointed out that credits for individual taxpayers were capped at $5 million each.

Other controversial provisions not originally in Parnell's bill include:

• An attempt to block adoption of Common Core school standards;

• Lengthening the time before teachers can be granted tenure; and

• Providing extra money for Anchorage and other large districts.

Also still in flux are school funding levels, both this year's increasingly likely increase of the Base Student Allocation as well as the possibility that other school money may be reduced to minimize the overall impact of the increase.

Dramatic changes to the Teachers' Retirement System may be the most controversial part of House Bill 279. That plan, proposed by House Finance Committee Co-Chair Bill Stoltze, R-Chugiak, and Legislative Finance Director David Teal, would ease budget woes in the short term but could increase costs in the long term.

The Parnell administration warned that such a plan could result in Alaska not meeting its moral obligations, as well as threatening the state's credit rating and its ability to finance a natural gas pipeline.

The new version of House Bill 278 was adopted by a divided House Finance Committee Thursday, and was scheduled for an almost-immediate floor vote. That vote has been repeatedly delayed, however. Floor amendments are now scheduled to be considered Monday evening.

Contact Pat Forgey at pat(at)

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