When it rains, it pours.
The Dunleavy administration was handed yet another loss in the courts this week, and the latest defeat is the most stinging.
Juneau Superior Court Judge Daniel Schally ruled in favor of the Legislature in a lawsuit over the constitutionality of the Legislature’s practice of forward funding K-12 schools, writing that Dunleavy and his administration “have violated their duty to faithfully execute the law.”
The Dunleavy administration and Attorney General Kevin Clarkson argued that the Legislature’s approval of the current year’s K-12 budget in last year’s budget violated the Alaska Constitution’s prohibition on dedicated funds. They argued that a budget for one year must be funded with revenue from that year.
The move by the Legislature also, coincidentally, put the K-12 funding for this year out of reach of Dunleavy’s veto. His initial budget sought to cut K-12 funding by about 25 percent.
Judge Schally said he finds no basis for the state’s argument in the Alaska Constitution.
“The Defendants argue that a requirement that appropriations take effect the following fiscal year from the date they are enacted is either expressly provided for, or implied, by the aforementioned clauses of the Alaska Constitution. However, none of the above clauses—either alone or in conjunction with each other—explicitly mandates this,” he wrote. “Nor do the clauses implicitly prohibit a delayed appropriation effective date of the second forthcoming fiscal year from the date of enactment. At most, the clauses, read together, express an aspiration that the Legislature appropriate general revenue to be expended during the forthcoming fiscal year.”
The Legislature also refused to change course even when given opportunities by Dunleavy-aligned legislators to put the money into this year’s budget via amendment. The Legislature voted those opportunities down both in committee and on the House floor, later arguing that those opportunities meant the Alaska Legislature had the choice to repeal the funding but chose not to, thereby maintaining its power of appropriation.
Judge Schally agreed.
“It is possible to say that the 2018 appropriations curtailed to a degree the 2019 legislature’s control over the appropriated money from the general fund. But the 2019 legislature certainly had the power to amend or repeal the appropriations at issue before their effective date with a simple majority vote in both houses,” he wrote.
Schally went on to add that there are other constitutional duties at play here.
“Even so, to the extent that appropriations could be said to undermine the spirit of the state’s annual appropriation model embodied in the dedicated funds clause, the model’s spirit is outweighed by the legislature’s power of appropriation and its specific prerogative and responsibility to maintain the Alaska public education system under the Public Education Clause,” he wrote.
Schally’s 10-page order closes with a particularly stinging rebuke of the governor, explaining that his position violates his constitutional duties as the state’s executive.
“The Alaska Constitution vests the governor with the responsibility ‘for the faithful execution of laws.’ The defendants thus have a constitutional obligation to execute the appropriations (for the forward funding of education), and therefore must execute them accordingly,” Schally wrote. “To do otherwise infringes upon the legislature’s power of appropriation and duty to fund public education under the public education clause.
“The Defendants (Dunleavy and his administration) have violated their duty to faithfully execute the law by failing to execute the forward-funding appropriations at issue according to the statutory funding procedures,” he wrote.
The order comes along with an injunction prohibiting Dunleavy from impounding or withholding money from the appropriations and an order requiring the administration to provide the Legislature with an accounting of all the expenditures of money related to the appropriations.
The state has already indicated that it plans to appeal the lawsuit.
Why it matters
The state’s decision to wade into forward-funding of education always seemed likely to fail. The arguments that won with Schally were the same arguments that many a layman—this blog included—discussed as the likely defense for the Alaska Legislature.
The long-term impacts of this victory are not entirely clear. The state is planning to appeal the case to the Alaska Supreme Court, arguing that they need to have some clarity on any potential cap for forward funding.
In the grand scheme of things, this marks the third court loss for the administration in a week that has been completely dominated by court action as new cases are launched, other cases reach oral arguments and cases, like this one, reach the conclusion of a stage.
It’s not been a good showing for Clarkson’s Department of Law, whose “novel” readings of Alaska law is finally being exposed.