The Future of Challenges to the Alaska Public School Funding Scheme After State v. Ketchikan

• Publication year: 2017

§ 34 Alaska L. Rev. 111. THE FUTURE OF CHALLENGES TO THE ALASKA PUBLIC SCHOOL FUNDING SCHEME AFTER STATE V. KETCHIKAN

Alaska Law Review
Volume 34, No. 1, June 2017
Cited: 34 Alaska L. Rev. 111

THE FUTURE OF CHALLENGES TO THE ALASKA PUBLIC SCHOOL FUNDING SCHEME AFTER STATE V. KETCHIKAN

Kate Wheelock ^[*]

ABSTRACT

In 2013, the Ketchikan Gateway Borough initiated a challenge to the Alaska public education funding scheme by paying its required local contribution (RLC) to its school district under protest. The Borough subsequently filed a lawsuit against the State of Alaska in 2014. This Note discusses the supreme court's constitutional analysis of the RLC in State v. Ketchikan. Despite extensive discussion of the RLC in the context of the Alaska Constitution's Dedicated Funds Clause, the court failed to sufficiently analyze the RLC (a critical component of public school funding) in the context of the state's responsibility for education-a duty rooted in the Public Schools Clause. This Note will argue that, unlike the challenge to the RLC under the Dedicated Funds Clause, a successful challenge to the RLC under the Public Schools Clause is a possibility. To prevent a hasty legislative response, the State should consider alternative funding schemes less reliant on RLCs before a court order demands it do so, particularly given the disparities in local contributions that are not necessarily proportional to borough revenues as well as the increased criticism of the RLC after State v. Ketchikan.

I.INTRODUCTION & OVERVIEW

Two disparities in the current, "on-the-ground" public education system in Alaska-an achievement gap between Alaska Natives and white Alaskans, and a geographically based digital divide-illustrate the unique challenges Alaska faces in education. First, achievement disparities between white and Native students in Alaska public schools rival or exceed school systems in other states. ^[1] Almost half of Alaska Native students did not graduate on time in 2013, and a smaller proportion of Alaska Native fourth-graders are proficient in reading as compared to white Alaskans. ^[2] Second, the geographic makeup of Alaska means that the state public school system covers and incorporates vastly different types of space, leading to a digital divide. Internet connectivity varies widely between districts across the state, ^[3] and 42 percent of Alaska's schools cannot provide even a tenth of the Internet resources the FCC mandates for school Wi-Fi. ^[4]

These interrelated divides paint a picture of the unique and disparate needs of Alaskan students. The state legislature adopted the current public school funding system in 1998 to account for these disparities, among others. ^[5] A state with significant regional disparities in cost of living and population, among numerous other differences, requires a public school funding scheme that accounts for the variety of unique student circumstances and needs; Alaska is not a "one-size-fits-all" state. ^[6]

The required local contribution (RLC) to school funding by local governments has played a major role in the funding scheme for decades but is no longer unchallenged. In 2012, Ketchikan Gateway Borough Manager Dan Bockhorst released a report, arguing "the manner in which [Alaska's funding system] is carried out is . . . arcane and deeply flawed," and labeled it a "byzantine" system. ^[7] The disparity between contributions required by city and borough governments as compared to unorganized areas-the "most egregious aspect of the flawed system"- sparked his indignation over what he perceived as a penalty to organized boroughs. ^[8] In 2014, the Ketchikan Borough legally challenged the state's statutory mandate that the borough pay the RLC in Ketchikan Gateway Borough v. State of Alaska. ^[9] The State defended the system, and the Alaska Supreme Court ruled the RLC permissible under the Dedicated Funds Clause, the Appropriations Clause, and the Governor's Veto Clause of the Alaska Constitution. ^[10]

However, this affirmation of the RLC under certain clauses does not preclude a future challenge under another relevant provision-the Public Schools Clause. Should the RLC, or the funding scheme as a whole, be successfully challenged and held unconstitutional, the state would need to reform the education funding framework while in the midst of the current fiscal crisis. Thus, the state should begin to analyze additional sources and methods of funding. This Note analyzes the potential constitutional challenges to the RLC and highlights several school funding methods that have been successfully implemented in other states.

II. BACKGROUND

Alaska public schools served a total of 133,223 students as of October 2016. ^[11] These students received the second highest per-pupil expenditures of any state in the nation, at $18,416. ^[12] Only four other states and the District of Columbia exceeded the $16,000 threshold. ^[13]

Yet, these higher-than-average expenditures have not led to higher-than-average student outcomes when compared with national statistics. As of 2015, Alaska public school fourth-graders are below average as compared to students in other states in math and reading proficiency. ^[14] Although several metrics show that Alaska does indeed pay more to educate its children and outpaces the rest of the United States, ^[15] per-pupil spending statistics do not account for the significant role played by cost-of-living variations across the United States. ^[16] Alaska's cost of living is the fourth highest in the nation. ^[17] Geographic isolation and climate further influence variations in the cost of education within the state. ^[18] Particularly in remote regions of the state, the cost of shipping goods and providing services increases costs even beyond those felt by urban Alaskan regions. ^[19]

Only New York, Connecticut, and Hawaii exceed Alaska's cost of living. ^[20] New York and Connecticut have comparable per-pupil expenditures to Alaska, ^[21] providing important context for Alaska's top statistical position in student funding. While Alaska leads the pack in terms of state per-pupil spending on education, the high cost of living undoubtedly plays a role in the higher expenditures and must be considered in any analysis of school funding data.

Article VII, Section 1 of the Alaska Constitution (the "Public Schools Clause") provides in relevant part, "[t]he legislature shall by general law establish and maintain a system of public schools open to all children of the State, and may provide for other public educational institutions." ^[22] The clause does not specifically quantify the amount of money or proportion of funding required to satisfy the provision, and the allocation of funds has been historically left to the state legislature. ^[23]

The current state education funding formula came into existence in 1998 through Senate Bill 36. ^[24] State legislators intended to allow for an "equitable" education level for students across Alaska public schools as well as within districts. ^[25] Alaska public school funding currently comes from three sources: (1) state aid, (2) federal Impact Aid, and (3) a required local contribution. ^[26] Precise formulae determine the amount a district receives from each source; the formula specifying the amount of state aid provided to each district is the most complex. ^[27]

Each school district's total funding entitlement is based on its "basic need," which is the amount of revenue necessary for the district to operate its schools. A district's "basic need" is calculated using the average daily membership of the district and the amount of funding the district needs to educate each student per year ("base student allocation"). ^[28]

First, the school funding formula only mandates that the state cover the excess of what federal and local contributions do not provide. The RLC and 90 percent of federal Impact Aid are subtracted from the "basic need" figure to determine a district's entitlement to state aid. ^[29]

Second, as codified in the Elementary and Secondary Education Act of 1965, ^[30] the federal Impact Aid program supports school districts which lose tax revenue due to the presence of large parcels of land within their boundaries owned by the federal government or exempt from local taxation, such as Indian lands. ^[31] The program supports districts with a large numbers of students residing on Indian lands or other federal property, as well as districts where a large number of parents are in the military or employed on federal properties. ^[32] The compensation received is calculated based on the number of eligible students and the average state per-pupil expenditures. ^[33] Congress appropriates the total amount available for the program nationwide and adjusts this amount periodically. ^[34]

Ninety percent of the eligible federal Impact Aid is deducted from a district's basic need amount to determine how much the state government must contribute to maintain the public schools. ^[35] In 2013, Alaska received the second-highest amount of Impact Aid funding, ^[36] trailing only Arizona, and making up about 13 percent of funding for public elementary and secondary schools. ^[37]

Third, public schools receive funding from local city or organized boroughs by way of the statutorily-mandated RLC. ^[38] The magnitude of the RLC is based on the value of the taxable property in the school district, but it may not exceed 45 percent of the district's...