ANCHORAGE – On Monday, Governor Dunleavy announced 71 line-item vetoes for a second time to the state’s operating budget. Governor Dunleavy has made it clear he believes these reductions are the responsibility of local governments. Today, Senate Democrats released a report from the non-partisan Legislative Research agency outlining possible increased local taxes to offset the veto of the Community Assistance Program and reductions in Fiscal Year 2020 K-12 public education. The report also considers the impact of withholding $30 million from school districts during ongoing litigation on the 2018 forward-funding for the current school year.

 

“Every line-item veto has a direct impact on Alaskans,” said Senator Tom Begich (D-Anchorage). “These potential tax increases impact homeowners, rent-payers, and business owners. Local and state lawmakers must monetize the impact of these vetoes on our local communities as we work to protect constitutionally required services. Some local governments may not have the tax base to make up for the lost revenue, while others face legal limitations in being able to raise those taxes at all.”

 

The research report analyzed impacts on seven communities throughout Alaska. The Mat-Su Borough, City and Borough of Juneau, and the Fairbanks North Star Borough had the most significant increases at $119, $116, and $114 per $100,000 of assessed property value, respectively.

 

“When I was a city councilman in Fairbanks in the early 2000s, I saw the threat of losing state support. This time it is even more significant and could become reality,” said Senator Scott Kawasaki (D-Fairbanks). “Shifting this state responsibility onto local taxpayers is not the way to grow thriving local economies.”

 

Governor Dunleavy again vetoed School Bond Debt Reimbursement and Regional Education Attendance Area (REAA) funding to 50 percent, which is calculated into the K-12 allocation section in the report. The outcome of the Kasayulie case established the REAA fund in 2010 to ensure parity between urban and rural schools.

 

“These funds are critical to maintaining existing school infrastructure and buildings, especially in rural Alaska where many schools were neglected for years,” said Senator Donny Olson (D-Golovin). “The state has a constitutional and statutory obligation to maintain public school classrooms and buildings. Shifting these costs to local communities does not fulfill the spirit of the Kasayulie case. This research report demonstrates how rural boroughs may not have the tax base to make up for the loss of funds.”

 

For every $100,000 of assessed property value, the report determined an increase of $101 for the Municipality of Anchorage, $102 for the North Slope Borough, and $41 for the Kenai Peninsula Borough.