Alaska House votes to halt school bond repayment program; Anchorage bonds could still qualify

MarketsAssociated Press

The municipality of Anchorage could be the last community to be reimbursed for new school bonds before a five-year hiatus.

Alaska's House voted Thursday in favor of Senate Bill 64, which would halt the state's practice of partial repayments on school maintenance and construction bonds for five years, and then reduce the reimbursement rate after that. An effort to make that effective immediately failed when it received just 24 votes, instead of the 27 needed, so the bill won't become law for 90 days.

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That means the state could be on the hook for its share of a nearly $60 million bond package Anchorage voters will consider April 7. A memo from the Legislature's Legal Services division said the immediate effective date needed to pass both the House and Senate, and the governor needed to sign the bill before the election to avoid paying for those bonds.

The bill passed the Senate last week. Gov. Bill Walker's spokeswoman had no comment on whether the governor would sign it since it hasn't reached his desk yet.

The bill was sponsored by the Senate Finance Committee and introduced in March, and proponents have portrayed it as a way to help curb state spending. The state faces a $3.5 billion dollar deficit due to a decline in oil prices, and Rep. Steve Thompson, R-Fairbanks, said that his role in Juneau was to help control spending, not increase it.

But others pointed to the need for school maintenance. Rep. Les Gara, D-Anchorage, said he thought the five-year hiatus could just lead to more projects to pay off when the program is reinstated after five years of neglected maintenance at schools.

Thursday was the second time the House voted on the bill and when it would go into effect.

The reimbursements don't occur until the municipality has started making payments, and they are subject to the Legislature appropriating the money for them.