School funding lawsuit moves forward

Administration will look into logistics of suing the state

Posted: Friday, May 19, 2006

Mayor John Williams got the go-ahead Tuesday to explore a possible lawsuit that would claim the state of Alaska has for several years failed to fund Kenai Peninsula Borough schools either adequately or equitably.

The Kenai Peninsula Borough Assembly voted unanimously to authorize the administration to investigate the pros and cons of a civil action that would ask the courts to force the state to fund borough schools at a higher and fairer level and possibly to seek $70 million or more in compensation for inadequate funding since 2001.

“I believe this is the proper course of action,” Williams said Wednesday. “At least it will allow consideration of further avenues. We need to determine what course of action can be taken and should be followed.”

No formal lawsuit currently exists and exactly what might be included has yet to be decided. But Tuesday’s assembly action clears the way for the borough’s legal department to begin investigating its options.

“That will tell us if we need outside council and how to formulate a lawsuit against the state in light of the fact that we are a political subdivision of the state,” he said.

State funding to school districts is determined through what is known as the foundation formula, a complex calculation that includes an area cost differential factor that compares rural districts with Anchorage. Borough and peninsula school district officials have argued for years that the 1.004 cost-differential factor applied to the peninsula district (Anchorage is set at 1.00) is too low, and studies have shown it should have been around 1.171. The lower figure has cost the district at least $70 million over the past five years, officials have said.

For years, state lawmakers have promised to revamp the foundation formula and address area cost differential inequities. In the past couple of years, those attempts have resulted in short-term appropriations boosting funding to schools on an annual basis, which has certainly helped, district officials have said. But there has yet to be a long-term fix of the formula’s systemic problems.

In April, Mayor Williams gave official voice to a sentiment many have felt — that the borough was tired of waiting for the Legislature to act, and ought to seek redress through the courts. The assembly’s decision to agree was met with enthusiastic support from a long-time district teacher, Renee Henderson.

“Six years and nine months ago I sat in the office of the new superintendent at the time and asked her to consider having a lawsuit against the state of Alaska for education,” said the Kenai Central High School choir and physical education teacher. “She questioned why I even brought it up, stating that most likely the state administration would make it correct in a short period of time. I can’t tell you how many times I’ve heard that since I began teaching here 35 years ago.”

Henderson said she watched borough schools improve through the 1970s to become some of the best in the nation by the 1980s, but has seen them decline in recent years because of ever-tightening budgets. The only way to get them back on top again, she said, may be to “urge (state lawmakers) a little stronger than they’d like to be urged” through the courts, “and to demand the $70 million to $100 million that they owe us.”

Kenai resident Preston Williams added that the borough should also consider suing the state for its failure to reimburse the municipality for the state-mandated $150,000 property tax exemption. The state stopped reimbursing municipalities for the lost revenue in the late 1990s.

“You might as well hit them with both of them,” he said.

The motion approved by the assembly authorizes Williams to “investigate and formulate a plan that may include legal options available to the borough to pursue such an action.” Williams is to present the assembly with a plan of action and receive authorization before proceeding.

Assembly member Grace Merkes, of Sterling, questioned what a lawsuit might cost. Borough attorney Colette Thompson said she had heard, but not confirmed, that a similar lawsuit headed for superior court in Anchorage in the fall, Moore v. State, may already have cost between $1 million and $2 million.

“I just want people to understand this is not going to be something cheap if we are going to do it,” Merkes said.

Assembly member Deb Germano, of Homer, said she supported investigating a possible lawsuit, but noted that statistics show district students doing well compared to those in Anchorage and the Matanuska-Susitna Borough, despite inadequate funding from the state. That, she said, could be an argument against the borough’s claim.

“What are the damages?” she said. “I certainly do support this, but I’m not sure where we’ll end up.”

Margaret Gilman, assembly member from Kenai, said the borough shouldn’t look just to test scores and grades to determine damages.

“I think you have to frame it in terms of opportunities lost,” she said. “I can speak personally that I graduated from Kenai in 1982. When my daughter started there last year in 2005, she had exactly one half the course offerings available to her as I did when I left there in 1982.”



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