In less than three months, Kenai Peninsula Borough voters will be asked whether borough property tax revenue should be used to directly fund school district cocurricular activities such as sports, music, dance, speech and other programs providing educational opportunities for students beyond the core curricula of English, history, science and math.
By a unanimous vote Tuesday night, the borough assembly adopted Resolution 2003-130, which will put the following proposition to voters in a mail-in election March 30: "Do you approve of the exercise of powers necessary for the Kenai Peninsula Borough to directly fund cocurricular activities for the school district in addition to operating funds currently authorized by law?"
In voting to put the question on the ballot, assembly members cited a continuing failure by the Legislature to fund borough schools adequately. For the past several years, school district officials have faced the daunting task of trying to balance rising district costs with declining revenues, which they have managed to do by cutting programs, crowding classrooms and laying off teachers.
As the budget cycle begins again this month, district officials are facing a deficit of more than $5 million and are warning that without adequate funding cocurricular activities could disappear.
Dr. Nels Anderson, a member of the school board, said it was "a leap of faith" to go to the voters, noting that a similar proposition recently in Oregon was turned down by a margin of two to one. Nevertheless, he said he was "thrilled" that voters would have the chance to decide the issue.
However, he also said he doubted any school board member would be able to vote to return cocurricular activities to the budget should the vote fail considering the financial crisis the district faces.
Not everyone who testified at Tuesday's meeting supported putting the question to voters. Dave Carey, a longtime teacher and current mayor of Soldotna, warned against approving the resolution, saying the state was not living up to its obligation to fund education adequately.
"This borough for over 10 years has been underfunded by the state," he said. "If you approve this and the voters approve this you are letting the state get away with ripping us off and making us pay for an additional expense the state is obliged to do."
The issue, Carey continued, was not sports or no sports, but whether the people would pay a cost the state is supposed to handle. He said the resolution would "perpetuate a tax error." He also said an election in just 11 weeks was too soon for adequate public discussion prior to voting.
Assembly member Ron Long of Seward agreed that, indeed, a decision by voters to authorize funding for cocurricular outside the cap might be seen as "enabling behavior" that rewards the state for ignoring its responsibility, but he said that given the borough's inability to encourage the state to fund borough schools adequately, the choice has come down to paying for those activities or seeing them disappear to the detriment of district students. He asked Carey how he viewed that basic dilemma.
Carey stuck to his guns, saying there was a wrong occurring and enabling that wrong was not the right option.
"I think we have to say that what they are doing is wrong, and then we have to accept the consequences," Carey said.
Joe Arness of Kenai, a former member of the school board and a member of the district's Cocurricular Task Force, responded to the suggestion that the resolution and a public vote would amount to enabling behavior.
"Frankly, I guess maybe I'm just jaded enough to believe that I don't think the state cares," he said. "It is our children and our community that we have to look out for. The state is going to do what the state is going to do. We've tried for years to correct some of the inequities and haven't made any headway in that process."
He said the funding proposal is a good move.
The ballot measure is an iffy proposition. First, there is no guarantee voters will approve of the exercise of powers that could boost their property taxes. Officials anticipate taxes might rise by as much as .5 mills ($50 per year for a $100,000 home), but the actual mill rate would be up to the assembly.
Second, while borough attorney Colette Thompson has said that in her opinion providing funding for cocurricular activities outside the so-called "cap," a statutory limitation on the amount municipal governments may contribute to school operating funds, "appears to be legally defensible," she also has said the issue is not clear and that arguments against that opinion could be made.
Two questions must be addressed, she said. They are whether funds for cocurricular activities could be accounted for outside the cap, and if so, whether the borough could do so under its existing authority to fund "school purposes" from local funds.
Traditionally, cocurricular activities have been funded through the district's operating budget along with core courses, and Thompson said this fact appeared to indicate the borough has the authority to fund cocurricular activities as long as they were consistent with educational purposes.
In a Dec. 15 memo to the assembly, Thompson said if the borough paid for cocurricular programs through a special revenue fund, and not through the school district's operating fund, those programs could be funded outside the cap on operating fund contributions. She said, in her opinion, federal law supports the conclusion that the borough's educational powers allow for funding such activities outside the cap.
However, Thompson also said there are arguments supporting the conclusion that the borough lacks the power to fund cocurricular activities outside the cap because those activities should be reported within the operating fund. She said "school purposes" could be seen to include only those items specifically detailed in the operating fund or other expenses such as capital improvements.
In other words, it is a gray area.
But Thompson said the argument that the borough has the authority to fund cocurricular outside the cap "would be significantly strengthened in the legal arena if voters were to approve a proposition authorizing the borough to fund such activities in addition to operating funds."
Voter approval would not automatically mean an increase in property taxes. A half-mill increase, however, would be expected to provide about $2.2 million per year, based on current taxable property value in the borough.
Revenue from the tax would be placed in a special revenue fund and administered by the school district superintendent.
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