Tax relief, fairness at heart of schools lawsuit

This editorial originally appeared in the Thursday edition of the Fairbanks Daily News-Miner.

Alaska has dozens of school districts, from the tip of the Southeast panhandle, to the Aleutian Islands, west and north toward the coasts, and pretty much everywhere in between.

Many of those school districts are within organized local governments and receive some of their annual funding from local taxation.

The leaders of those local governments should do what the Fairbanks North Star Borough has done: join the Ketchikan Gateway Borough in its lawsuit alleging that the state’s requirement that local governments pay toward the cost of K-12 education violates the Alaska Constitution.

So far, it’s just Ketchikan and Fairbanks against the state. That needs to change.

Ketchikan makes a solid argument. Its lawsuit against the state, filed in January, alleges that the requirement for a local contribution to education amounts to an unconstitutional dedicated tax and that the state should be paying 100 percent of the cost of education.

The state already provides full funding, by the way, for schools not located within an organized borough.

So that means Fairbanks, Ketchikan and other parts of the state that are organized into boroughs are being financially penalized for, well, being a borough. And it’s like an added poke in the eye to Fairbanks and other areas that were forced to organize into boroughs under the Mandatory Borough Act of 1963.

It’s well understood that the regions of the state that have been organized into boroughs generally have a good-enough tax base from which to draw revenue to provide local services such as libraries, animal control, parks and so on. Communities in the unorganized areas generally don’t have as good a tax base as communities in boroughs, but that shouldn’t be allowed as justification for taking money from Alaskans who happen to live in more prosperous parts of the state.

What would it mean for Fairbanks property tax payers if the state were to have paid the total cost of K-12 education in the borough in the current fiscal year? The borough’s required education contribution amounted to $26.9 million this year. That’s money that could have been spent elsewhere or simply not spent at all, thereby reducing our property tax rate.

(Taxpayers actually provided quite a bit more, $48.3 million, not counting the debt service on voter-approved school bonds.)

It’s surprising, really, that this has been allowed to go unchallenged for so long.

Each side — Ketchikan and the state — is asking for a declaration of summary judgment. A hearing on the case is expected in June, so there’s still time for other local governments to do like Fairbanks and join with Ketchikan.

This is one of those cases that could bring millions of dollars of tax relief to Alaskans across the state. It’s also a case about fairness. So it is worthy of broad

support.

– newsminer.com