The Alaska Supreme Court announced Friday morning that it has ruled in favor of the State of Alaska in the Ketchikan Gateway Borough’s lawsuit challenging the state’s required local contribution for education.

The long-awaited Supreme Court ruling partially reverses a lower-court decision that had agreed with the borough’s argument that the state’s required local contribution violates the Constitution’s prohibition against dedicated funds – or earmarks.

The Supreme Court ruling also allows the Legislature to continue with the status-quo for education funding in the state.

Borough Manager Dan Bockhorst and all Borough Assembly members were in a day-long strategic planning meeting on the day of the ruling and unavailable for interviews. However, Bockhorst talked about the ruling and its financial implications during that meeting.

Bockhorst said he’s disappointed, and predicts the ruling will result in additional costs to municipalities.

“There is very little doubt that we are going to suffer very significantly increased property taxes or other taxes as a result of this decision,” he said.

Bockhorst told the Assembly that in 2014, when the price of oil was about $108 a barrel, a House task force concluded that the state’s level of education funding wasn’t sustainable.

“The task force advised that sustainability would require a number of measures, among News Tilewhich are increased contributions,” he said. “Oil is now selling at $35 a barrel and production is declining.”

Bockhorst predicts that the required local contribution will jump by at least 50 percent within the next couple of years. That increase in local contributions would in turn reduce the state’s share of education funding.

There was no dissent offered to Friday’s Supreme Court opinion, which was written by Justice Joel Bolger. He writes that the court agrees with the state that the required local contribution is a longstanding cooperative program between the state and local governments.

Bolger writes that “the minutes of the constitutional convention and the historical context of those proceedings suggest that the delegates intended that local communities and the State would share responsibility for their local schools.”

Assistant Attorney General Kathryn Vogel argued the state’s position throughout the lawsuit’s proceedings. She said she’s pleased with the court’s decision. Local governments throughout Alaska contribute about $225 million a year to public education.

“Requiring the local contribution and having that as part of our school funding formula has also maintained our eligibility to offset state formula aid with federal impact aid to the tune of approximately $70 million each year, so there are some significant funding implications to today’s decision,” she said.

While concurring with the opinion, Chief Justice Craig Stowers and Justice Daniel Winfree write that the decision might not have favored the state if the borough had instead challenged the constitutionality of the required local contribution under the public schools clause, rather than the dedicated funds clause.

The schools clause requires the state to establish and maintain a public school system open to all children in Alaska.

Vogel said it was the borough’s choice to not challenge the contribution under that clause.

“The state invited in the superior court briefing a discussion of what the education clause means,” she said. “At the time, the borough demurred and said that it was not part of this lawsuit, and as a result it wasn’t litigated.”

In a concurrence that reads somewhat like a dissent, Justice Winfree was critical of the required local contribution, and writes that he has “considerable doubt about the constitutionality of the statutorily required local contribution.”

But, when challenging a statute, the plaintiff has the burden of persuasion, and Winfree writes that the borough did not overcome that burden.

 This report has been updated and expanded since the original posting.