Lawmakers amend budget to stop reimbursing municipalities for school bond debt

Rep. Ben Carpenter, R-Nikiski, pauses while voicing his opinion about an amendment to the state operating budget during House Finance Committee deliberations on Wednesday. The committee voted 7-4 for the amendment, which would stop the state from reimbursing municipalities for existing school bond debt. (Photo by Skip Gray/360 North)

The House Finance Committee voted Wednesday for an amendment that would stop the state from reimbursing municipalities for existing school bond debt.

The vote brings the House budget back into agreement with Gov. Mike Dunleavy on the issue. If the amendment makes it into the final budget, it would shift roughly $100 million in spending from the state to municipalities.

Nikiski Republican Rep. Ben Carpenter proposed the amendment.

“All of our state programs are valued by somebody, but this amendment speaks to our duty to be fiscally responsible,” he said. “And we must reduce our expenses.”

Ketchikan Rep. Dan Ortiz, an independent, voted against the amendment.

“While it’s true we do need to look for cost savings, this is not a cost savings,” he said. “This is just a cost shift, down to local municipalities. And the impact would be a significant impact on almost all the different school districts and/or communities around the state of Alaska.”

A House subcommittee had voted to maintain the bond debt reimbursement.

All four minority-caucus Republicans — Kelly Merrick of Eagle River; Colleen Sullivan-Leonard of Wasilla; Cathy Tilton of Wasilla; and Carpenter — voted for the amendment. Majority-caucus Republicans Bart LeBon of Fairbanks; Jennifer Johnston of Anchorage; and Tammie Wilson of North Pole joined them.

The other four committee members from the majority caucus — Republican Gary Knopp of Kenai; Democrats Neal Foster of Nome; Andy Josephson of Anchorage; and Ortiz — voted no. Knopp proposed cutting the reimbursements in half, but an amendment he sponsored to do that failed.

The amendment is separate from a bill the same committee considered on Monday that would extend a moratorium on state reimbursements for new school bond debt through 2025. The moratorium started in 2015. Dunleavy has proposed permanently ending the reimbursements.


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