On April 7, Gov. Mike Dunleavy signed off on the Legislature’s budget for fiscal year 2021, but not before making a number of line-item vetoes to their spending plan. The governor eliminated the Legislature’s appropriation for school bond debt reimbursement.
For years, communities across Alaska used reimbursements from the state to help pay off bonds used for building and maintaining public school facilities. In 2015, the state stopped reimbursing new school bonds, but continued to help pay off debt from past bonds. Since then, Dunleavy has cut state funding to pay off old bonds as well.
Last week the governor vetoed all state support for municipal school bond debt reimbursement, but he said the vast majority of the money he vetoed will be replaced with funding under the federal CARES Act.
“When it comes to the school bond debt reimbursement, these are things that are being impacted by the virus and the ancillary closure that we had to do for the economy, so all of these impacts are affecting these various programs and services,” Dunleavy said.
Last month the U.S. Senate passed the CARES Act, a $2.2 trillion bill to alleviate damage the coronavirus is inflicting on the economy.
Some of that money will end up in Alaska, but exactly how much is unclear.
Sara Hannan represents the Upper Lynn Canal in the state House of Representatives. She is not sure that money from the CARES Act can be used to help cover municipal school bond debt.
“What I’m hearing from our side of legal services is we can’t fund things like school bond debt — things that were preexisting in previous fiscal years or a task to be budgeted for in previous fiscal years,” she said.
Hannan says she does not oppose passing the cost of state services on to the federal government, but she doesn’t want the state to have to pay that back in the future.
“No one in the Legislature is opposed to using federal money to fill gaps in our services,” Hannan said. “The concern is that if we spend money in places that the feds say you can’t, that they then come back and say, ‘You got to pay us back that money.’ We don’t want to cross that line and promise things to communities that by our attorney’s reading says, ‘We think you can’t spend money on that.’ ”
The Legislature had five days to attempt to override the vetoes, but that deadline has passed. Hannan says it is possible some of the money cut by the governor’s vetoes could be restored in spending bills, but she doesn’t think there is enough support for that right now.