Superior Court issues final judgment ruling forward funding of education is constitutional

Following an earlier ruling that found the Legislature could legally forward fund K-12 education, Superior Court Judge Daniel Schally on Tuesday issued final judgement on the case ruling that Gov. Mike Dunleavy must follow the law and disburse education funding according to the law.

The order finds the governor failed to follow the law when he refused to disburse payments to school districts at the start of the fiscal year in July, and orders that they disburse all payments—including a one-time $30 million grant—to districts “as soon as is reasonably practicable and without further delay in strict conformity with the procedures and disbursement scheduled required by the appropriations.”

In other words: Follow the rules.

The Legislature approved two years of funding in its 2018 budget, which was signed by then-Gov. Bill Walker, in the name of offering districts some stability as well as a one-time grant of $30 million.

The move effectively put education funding out of reach of Dunleavy’s first budget, which had originally proposed a 25 percent cut to K-12 funding, and later his veto pen. Late in the legislative session, Dunleavy asked legislators to put the funding back in the budget and promised he wouldn’t veto it.

Dunleavy and Attorney General Kevin Clarkson then set up the fight with the Legislature by refusing to send districts their first payment, disputing the Legislature’s ability to fund education in a budget that reaches beyond the current fiscal year. They said the constitutional prohibition on dedicated funds requires that each budget is contained to a single year.

The Legislature didn’t bite at any point, arguing that it was well within the Legislature’s right to forward fund education because it could also later change its mind, and Judge Schally ultimately agreed in a ruling in early November.

“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.

While the lawsuit has been underway, districts have been receiving monthly payments through the state’s base student allocation funding formula under an agreement between the governor and the Legislature.

Tuesday’s final judgment orders that all funds—including the $30 million one-time grant—be disbursed to districts under the normal rules. The order also forbids the administration from withholding money from the appropriations and requires the state to provide the Alaska Legislative Council with an accounting of all expenditures related to education funding.

Dunleavy and Clarkson have already signaled their plans to appeal the issue to the Alaska Supreme Court.

Why it matters

The order caps off one stage of a significant case between the administration and the Legislature. It’s likely to head to the Alaska Supreme Court, but Judge Schally’s definitive ruling is a blow to the administration’s position.

Still, the case only relates to state funding for K-12 for the current budget year.

Just what the governor has in mind for his upcoming budget, which is set to be released later today, is unknown. But with the goals of matching expenditures to existing revenues while paying out a big dividend, it’s a near-impossible for it to be done without significant cuts to K-12.

Dunleavy proposed a 25 percent cut to the base student allocation formula in last year’s budget, which would have amounted to a roughly $325 million cut to state funding for schools.

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