House Finance passing school taxes to urban property taxpayers



Anchorage and Mat-Su property taxpayers beware. Fairbanks, hold onto your wallet. And Juneau property owners, you’re about to get sticker shock.

On Tuesday, Rep. Paul Seaton, co-chair of House Finance Committee, slipped a stealth budget amendment into the Education budget that cuts $48.6 million in reimbursements to municipalities for school bond debt. That means people in urban areas who own real estate would have to pay the bill.

Those reimbursements have been sent to local districts for years to help them repay loans for capital projects.

Seaton, who has spoken often this year about his “open and transparent” budget process, didn’t tell any of the fiscal hawks on House Finance what he’d done. Perhaps he had told his Democrat colleagues, but the Republicans just happened to be paying attention to an obscure part of the budget where the amendment was inserted without mention.

Fiscal conservatives on the committee discovered it just hours before the committee was to take up amendments to the Education budget and the amendment is now in today’s committee substitute bill. Public testimony will be taken on it on Thursday, Friday, and Saturday.

  • For Anchorage, that’s an $18.5 million that property tax payers would have to make up.
  • Juneau property taxpayers would have to make up $4.6 million in taxes.
  • Mat-Su property owners would face $9.6 million more in property taxes.
  • Fairbanks property owners would pay another $4.9 million.


When local voters were asked to approve school construction bonds, they were told by their school districts that the State always covers 60-80 percent of the loans.

Now, with those projects already under construction or completed, the State would be reneging on its promises to urban property owners.

The “out clause” that the State would use to dodge the obligations is that the municipal bond debt reimbursement is always “subject to appropriation.”

Rural districts, such as Bering Straits, Bristol Bay, Yukon School District, and Lower Kuskokwim, would feel no impact to their taxpayers because they don’t pay property taxes.

The way school construction is paid for in rural areas is different. They get their money directly from the State, as they don’t have the legal structure nor means to pass bonds. In other words, they enjoy a free ride on school construction. The school debt repayment support for urban school districts was designed in part to balance out the disparity between rural and urban school construction funding.

In 2015, the Legislature told municipalities that, for the next five years, the State would not reimburse any new school bonds, but they did not upend commitments that had already been made to voters.

Now, Seaton and House Democrats want to reneg on past commitments, too.



Thursday, March 2, 2017, 1-6 pm    
1-3:30 pm Homer, Kenai, Ketchikan, Kodiak, Mat-Su & Seward
3:45-6 pm Barrow, Dillingham & Fairbanks

In the case of postponement, Thursday’s public testimony will be rescheduled as follows:
Saturday, March 4, 2017 – 3-5 pm – Homer, Kenai, Ketchikan, Kodiak, Mat-Su & Seward
Monday, March 6, 2017 – 1:30-3:45 pm – Barrow, Dillingham & Fairbanks

Friday, March 3, 2017 1-6 PM

1-3 pm Anchorage
3:15-4:45 pm Sitka, Petersburg, Delta Junction, Unalaska, Glennallen & Tok
5-6 pm Off Net sites

Saturday, March 4, 2017  9 AM – 5 PM

9-10 am Bethel, Cordova, Kotzebue, Nome, Valdez, Wrangell
10-11 am Off Net sites
1-3 pm Juneau

3 – 5 pm Overflow Public Testimony as needed

Public Testimony Instructions from House Finance Co-Chair Seaton:

Testify in person or on the phone: Limited to 2 minutes each.  Arrive (or call in) early to expedite the sign in process, and be sure to arrive at least 15 minutes prior to the end of the allotted time period or testimony may close early.  If you are a member of a group with the same message, in the interest of time, please select a spokesperson to testify for the entire group.  If you are calling from a community without a legislative information office, i.e., an “Off Net” caller, only call during the designated Off Net time period on March 3rd and 4th; please call 465-4648 by 5 pm on Wednesday through Saturday to obtain the call-in phone number.  All Off Net callers are required to hang up immediately after your testimony is taken to keep as many lines open as possible for other callers.  Testifiers can continue to listen or watch the meeting online at, click on Alaska State Legislature and then choose the “Live Now” button.  The hearing may also be televised on Gavel to Gavel, please check listings.

Email Testimony:  If you live in a community with a legislative information office, but are unable to access it during the specified time period, you may send your written testimony to the House Finance Committee via [email protected] through 5 pm, Saturday, March 4, 2017.