Judge won’t stay school funding lawsuit

WASILLA — Local officials say they expect little impact from a superior court judge’s decision not to a stay a ruling that upended the state’s process for funding public schools.

Superior Court Judge William Carey denied a stay on Friday sought by the Alaska Department of Law in a lawsuit between the Ketchikan Gateway Borough and the Ketchikan Gateway Borough School District. Carey’s ruling in the case effectively invalidates the state’s requirement that municipalities help fund public education. Prior to filing the lawsuit in January 2014, the Ketchikan borough paid $4 million under protest.

Mat-Su officials said they were waiting for state-level officials to untangle issues arising from the funding, and any between the lawsuit and education cuts proposed by legislators. Months remain before local schools must submit their budget to the state on July 15, pointed out Mat-Su Borough schools assistant superintendent for finance Luke Fulp. In the meantime, officials are sticking to the old funding system, Fulp said.

“We’re just going to proceed with what we’ve always done,” he said. “There are a number of different possible outcomes.”

Officials are stuck waiting for either the Supreme Court to announce a decision on school funding, or the Legislature to change the system ahead the court decision, Fulp said.

For now, Department of Law officials were content to move their appeal to the Supreme Court, where they filed for a second stay from that body Monday, according to Assistant Attorney General Kathryn Fogel.

“Yes, we’re optimistic,” she said, of hopes the stay would be granted at the Supreme Court level. “I just think the Supreme Court is going to have a different perspective on it.”

Carey issued a judgment in November 2014 that found a portion of school district funding known as the “required local contribution” violated provisions of the Alaska State Constitution. That contribution affects financial operations for 34 of 53 Alaska school systems that draw portions of their financial support from local cities and boroughs. Public schools also receive state and federal funding.

Attorneys for the state had argued in a motion seeking a stay that the ruling could cause “irreparable harm” to the state; that that the sudden change in its educational laws would make the state unable to establish and maintain a system of public education as required under Article VII, Section 1 of the Alaska State Constitution; and that the ruling provides too little time and too little information for the Legislature to address it, according to Carey’s Friday decision.

Ketchikan borough attorneys argued that because the Legislature has “absolute control over education funding,” it can change the law to fit the judgment. Borough attorneys also allege the state was dragging its feet.

“The borough alleges the state wants to be granted a stay and then “slow roll” the case through the Supreme Court, forcing local communities to fund an unconstitutional scheme for a period of years without the option for repayment or bond,” Carey wrote.

Borough attorneys also argued that during the period of appeal, any money spent funding schools in an unconstitutional system would not be recoverable.

Carey ultimately ruled that while state lawyers had shown the state would suffer irreparable harm, they did not meet a second requirement for a stay, showing that the borough would be adequately protected during the stay, Carey wrote.

“In the event of a stay, plaintiffs would be forced to pay a considerable amount of money to meet its RLC obligations, with no hope of refund,” he wrote, of the state’s required local contribution.

Contact Brian O’Connor at 352-2269, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.