Alaska Trial Tests Who Has to Pay for Schools

by | September 17, 2015

By Tegan Hanlon

Attorneys sparred in Alaska Supreme Court Wednesday over whether municipalities must chip in for education in a landmark case that could overturn how the state pays for its schools.

The attorneys for both the Ketchikan Gateway Borough and the state of Alaska relied on differing interpretations of the Alaska Constitution in asserting or denying if the state violates constitutional provisions when it requires that municipalities help pay for education.

"There was already in the minds of the delegates of the Constitutional Convention a mandatory requirement that local governments pay money to their local schools," said assistant attorney general Kathryn Vogel, who presented the state's argument. "It wasn't discretionary. It was mandatory, it had the word 'shall.' "

As the attorneys debated the intent of the constitution, one of the only two living constitutional delegates, Vic Fischer, sat quietly in the expansive courtroom. He later talked about the document he helped write and what he believed it says about education.

"The constitution says education is a state responsibility," Fischer said in an interview after the case that he attended with his wife. "The constitution does not say that local governments have to spend money."

The decision rests with the Supreme Court and their ruling could upend how the state has long funded education. Fischer said it may give Alaska legislators the chance to make the system, which he described as "very discriminatory," more equitable. However, it could also leave the cash-strapped state on the hook for the more than $230 million that municipalities statewide are projected to pay toward education this school year.

Under state law, it's only Alaska's boroughs and first-class cities that must help pay for local education each year. If they don't pay, they don't get state money -- which funds the bulk of the education bill. This required local contribution does not apply to the "unorganized borough" covering Alaska's vast rural areas and its 19 school districts that get full state funding.

The Ketchikan Gateway Borough and four residents, including one now in 10th grade, sued the state of Alaska over that payment, calling it unconstitutional. They asked for a refund on the roughly $4 million the borough put toward education about two years ago.

"Our argument is very simple and it's very straightforward," Louisiana Cutler, an attorney for Ketchikan, told the Supreme Court Wednesday. She argued that the required local payment violates the part of the constitution that bars the state from earmarking revenue from a tax or license for a specific purpose, like education.

"The main purpose of the clause which is clear from the constitutional history is that every year, people were supposed to come in and have to fight for their programs," she said.

In a November ruling, Ketchikan Superior Court Judge William Carey invalidated the required local payment, saying it violated the constitution's "dedication clause." However, Carey said it 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. He also ruled that the Ketchikan borough could not get a refund on its education payment.

The state appealed Carey's decision to the Supreme Court as did the Ketchikan borough.

In Vogel's argument Wednesday, she called the state's education system a "quintessential state-local cooperative program."

She said the constitutional ban on earmarks addresses a specific source of "state public revenue" -- a class of money that doesn't include the required local payment. The constitution, she said, "never intended to bar local contributions to public schools."

Before Vogel could launch further into her argument, Justice Daniel Winfree interjected. He asked how the justices could decide "such a big constitutional question" without knowing if the constitution requires the state to pay 100 percent of costs for the state's education system.

The answer could shape how the justices looks at the case, he said, and other justices agreed.

"It's seems to me the tail is wagging the dog in this case," Winfree said.

He later addressed the same subject when he said, "Who has the responsibility to fund public schools in the state of Alaska? Is it the state or is it the state and local governments?" he asked. "Don't we have to know that?"

Both Cutler and Vogel said the level of the state's funding obligation was not part of the case and not integral in reaching a decision on the payment's constitutionality.

Supreme Court Justice Craig Stowers said that if the state had to pay 100 percent of the cost for education, then the state requiring "municipalities to tax their own citizens and make a contribution might very well be a violation of the anti-dedication clause."

Vogel argued that because the local money went right from the municipalities to the school district it was not considered state money and, thus, not subject to constitutional restrictions that only apply to state money.

She compared the required local contribution to a co-pay at the doctor's office.

"It's about requiring local buy-in; requiring skin in the game," she said.

After one hour of oral arguments Wednesday, Stowers said the justices would issue an opinion on the case "at a later time."

(c)2015 the Alaska Dispatch News