Judge William Carey heard oral arguments in Ketchikan Superior Court this morning (Monday, June 2nd) in the Ketchikan Gateway Borough’s lawsuit against the state over education funding.

The lawsuit challenges the state over what some local officials say is an unfair mandate requiring boroughs and first-class cities, but not others, to fund a minimum level for local schools. The borough argues that because not everyone in Alaska is required to contribute to local education, the mandate is not fair.

The Borough filed the suit in early January. In February, the Fairbanks North Star Borough Assembly voted to file an amicus brief in support of the Ketchikan Borough’s argument. Other plaintiffs in the case are Ketchikan residents John Harrington, David Spokely, Agnes Moran and her minor son, John Coss.

Louann Cutler of K&L Gates, LLC spoke on behalf of all plaintiffs. Cutler says under the constitution, the state is required to fund education. She acknowledged that the state is not required to ‘fully’ fund education, but reiterated that a statue requiring a local contribution from local sources, imposes an unfair tax on municipalities.

“It’s not just the municipalities; it’s the tax payer who are forced to make this payment to support the state obligation. It’s clearly a dedicated earmarked source of state funding, and that’s the problem with it. It’s not that the state has to fully fund education, it’s that it has to fund it in a way that doesn’t violate other constitutional provisions.”

Cutler says by forcing organized boroughs and cities to dedicate a certain amount to education funding, it is making them tax collectors.

A key case being used to support the Borough’s argument is State v. Alex. The Alaska Supreme Court decision in that case invalidated a state statute authorizing private aquaculture associations to collect fees from commercial salmon fisherman. This was found to be in violation of the dedicated funds clause.

Assistant Attorney General Kate Vogel presented the state’s argument. Vogel says the local contribution is constitutional because it not subject to the restrictions that apply to state money such as legislative approval or dedicated funds prohibition.

“This isn’t a specific funding source; it’s not a specific tax. It is simply an allocation of responsibility to a local government unit. It is no more a dedication that the portion of that same statute which talks about state aid.”

Vogel says if the local contribution was truly state money, the borough would receive 100 percent of its basic need and the money would be under the control of the state which could choose to use it for a purpose other than education. She says local contributions are currently going directly to the school system and municipalities are deciding how that money is spent.

Vogel reiterated that it is not a tax and municipalities could use other means, beside taxes, to fund the mandate.

“It’s not about the state imposing a state tax, which clearly it could do anywhere that it so chose. This is the state cooperating with the local communities and requiring that they themselves exercise their taxing authority or whatever other means that they use to come up with a certain amount. But certainly the state isn’t dictating a specific tax.”
Judge Carey responded.

“To my knowledge every municipality or borough that contributes does it through taxes. They’re not getting it through the bingo hall.”

Monday’s court appearance is the sole time oral arguments will be heard. The case is now in the hands of Judge Carey. It may be months before a decision is reached.