‘War on municipalities’: Assembly continues discussion about proposed state budget cuts

PALMER — The Mat-Su Borough Assembly met for a special budget meeting on Tuesday to discuss the impacts of the $59,597,592 in budget cuts from Gov. Mike Dunleavy’s budget to the Mat-Su Borough.

Manager John Moosey presented a memo of detailed funding that will be cut by the budget, detailing the cuts to the Port Debt Service Reimbursement, revenue sharing, and the School Debt Service Reimbursement cut of nearly $20 million. In Finance Director Cheyenne Heindel’s attached memo, she included additional tables prepared for the Alaska Municipal League meeting on Feb. 21 titled “Open for business” but closing doors. The borough would see nearly a $20 million cut to the School Bond reimbursement and nearly $5 million cut from the deepwater port and road upgrade. Moosey said that he met with Mayor Halter and staff the day after the governor’s budget was released

“I think everybody in the state’s getting hit pretty hard, some more than others. I still think there is room for me to complain that we’re getting hit more than most based on percentage,” Moosey said. “We have a very small commercial tax base, so property tax is picked up by homeowners.”

Heindel noted that the budget needs to be passed by the end of May for the Mat-Su Borough, regardless of the state budget situation.

“I don’t know why we’re having this meeting because we don’t have a clue what they’re going to do down in Juneau. This is just to raise the blood pressure level I think of the community a little bit,” Assemblyman George McKee said.

The school debt reimbursement bond was passed in 2011, when Dunleavy served on the Mat-Su Borough School Board. The $213 million bond was presented as a 70/30 proposal.

“I think Mr. Dunleavy was the deciding vote on that issue,” Mat-Su Borough Mayor Vern Halter said. “This is the one issue that probably bothers me the most is to renege on a partnership.”

While neither support nor opposition for the budget was unanimous, Halter was not the only Assembly member with parse words for Dunleavy.

“In my opinion the governor has kind of declared war on municipalities and the folks who are the most vulnerable in our society. It’s a classic example of ideology taking priority over practicality,” Assemblymember Dan Mayfield said. “He cut the university, or failed to fund the university in this budget, cut or failed to fund education, cut or failed to fund state Troopers and cut or failed to fund the Village Public Safety Officers. But yet, he included in his budget $1.2 billion in oil tax credits, 707 billion in Permanent Fund Dividend makeup payments and 25 million for Denali visitors bureau.”

Moosey presented the hard numbers before Borough Attorney Nick Spiropolous gave legal detail of what the state owes school districts. Spiropolous outlined the Alaska Statutes mandating that the legislature shall maintain public schools for all children, other educational institutions, and provide for public health and welfare. The borough assembly through the borough administrator shall provide for all major rehabilitation, all construction and major repair of school buildings, according to AS 14.14.060. The state aid for costs of school construction debt statute is 7.5 pages, but Spiropolous gave a quick analysis, detailing the difference in shall and may, where funds may be appropriated annually by the legislature.

“What we’re quickly coming up against is a constitutional provision that you cannot force a legislative body to appropriate funds,” Spiropolous said. What functionally happens is you have certain texts that i highlighted in the original bill simply doesn’t appear in the new bill so what does that mean? That means there’s no appropriation.”

Spiropolous also showed that the Port bonds were written in title 29.

“What’s really interesting about the port bonds is they’re actually in black and white in title 29 that the payment for the $10 million is there, along with all the others… but it begins with the state subject to appropriations for the purpose,”

The minimum requirement for the state is 2.65 mills to fund education. The maximum is also part of a complicated formula, but comes out to a cap of about $78 million, according to Mat-Su Borough Assistant Superintendent Luke Fulp

“I would recommend that we have a resolution that supports the governor’s cuts with the exception of the school debt service reimbursement,” Assemblyman Jesse Sumner said. “The effect of not having these budget cuts will be that we take money out of the Mat-Su Borough economy, money that would be in the Mat-Su Borough economy and ship it around the state.”

McKee asked Moosey to prepare more specific numbers on what sales tax numbers would look like, including health care.

“We’ve been spending like drunken sailors now for 30 years and we’ve got to come back to reality,” McKee said.

Halter’s birthday is the same day as the 90-day mark for the legislature, April 14. Halter asked the legislature to gavel out for his birthday.

Contact Frontiersman reporter Tim Rockey at tim.rockey@frontiersman.com.