Legislature votes to keep veto of school bond reimbursement

Jan 28, 2020

The veto will cost municipalities in Bristol Bay hundreds of thousands of dollars. Ahead of the vote on January 24, House Speaker Bryce Edgmon expressed hope that it would pass at a Dillingham city council and school board meeting.

The Dillingham City Council, January 2020.
Credit Isabelle Ross/KDLG

On January 24, the Alaska House and Senate voted against overriding Governor Mike Dunleavy’s veto on the school bond debt reimbursement program. The reimbursement program allows the state to assist  cities and boroughs in paying for expenses related to school buildings. The legislature also voted keep the veto of funding for the ferry system. The governor cut the programs as part of an effort to balance the state budget. 

That veto will make a dent in the budgets of Bristol Bay municipalities. That includes the Lake and Peninsula Borough, which is facing a cut of about half a million dollars. 

"All of our capital goes toward financing projects and/or education in the borough," said Nathan Hill, the borough manager. "And so the effect it would have on our communities is, I think the bottom line is less money for our communities. We've got to tighten up our purse strings so we can stay afloat."

Hill said the borough was set to pay an entirety of roughly $1 million a year. Before the veto, the state was obligated to pay back 70% of the money spent on new construction and 40% on repairs and remodeling. 

"If they don't pay that back, that leaves us with the lions share," Hill said. "Half a million dollars, for us, is a pretty good percentage of our budget. This current fiscal year we've budgeted $3.5 million dollars, and so it's a pretty good hit." 

Ahead of the vote, House Speaker Bryce Edgmon spoke to the importance of the reimbursement program at a joint Dillingham City Council and School Board meeting on January 23. Dillingham receives $371,100 through the program. 

“I know for the city, the bond debt reimbursement aspect — as it is for a lot of other places — is pretty critical," Edgmon said. 

Last year, the state paid 70% of the city's school bond debt, while the city paid 30%. Under the veto, that ratio is largely reversed, more than doubling what the city will pay.

Thirty-seven legislators voted to override the veto, and 20 voted against it, falling short of the 45 votes needed for the action. A veto of the reimbursement program hits municipalities all over the state, notably $20.5 million in Anchorage and $9.2 million in the Matanuska-Susitna Borough. There was some speculation that that could generate more support in the senate. 

"A place like the Mat-Su Valley, something like $220 million a year. Fairbanks, Anchorage," Edgmon said at the Dillingham meeting. "And so those legislators who weren't there to be supportive in the past may currently have second thoughts about helping us get to the 45-vote threshold."

That proved not to be the case in Friday's session. Still, Edgmon said the vote would send a clear message to the governor that many legislators see the vetoes as unduly harmful to communities throughout the state. Mayor Alice Ruby stressed how critical the bond program was for the city. 

"We know the school district is part of the city. We want to fund the school to the maximum extent possible — I think the council's demonstrated that," she said. "And so the funding the state provides is just critical. Because the city was really attacked from a lot of different directions this last year. The school bond debt reimbursement was a big one."

Amy Ruby has taught at the Dillingham Elementary School for over 30 years. She’s also Alice’s sister, and she also spoke at the meeting in support of the reimbursement program.

"It is so nice to be able to sit in a classroom and not have to tell the children to go put their coats on this time of year," she said. 

According to KTOO, Dunleavy administration officials have pointed out that school districts have a statewide total of $500 million in reserve accounts, but that opponents of the veto said much of that money is already budgeted for other expenses. 

Contact the author at isabelle@kdlg.org or 907-842-2200.