Veto to debt reimbursement could raise your tax bill

first_imgThe governor’s veto halvedthe amount of money the state will reimburse for school bond debt. The waythe program has long worked is that for parts of Alaska with a sizabletax-base, communities would borrow money through long-term bonds to get enoughcash for renovations that go above and beyond what you’d put in a regular schooloperating budget. One place they may look to closegaps: property tax rolls. “If you’re putting new roofs on,or replacing boilers and HVAC systems, those would be major infrastructureimprovements to extend the life of the buildings,” said Jim Anderson, ChiefFinance Officer for the Anchorage School District. One of the vetoes Governor Mike Dunleavy made, again, when he signed the operating budget on Monday was a cut worth $48,910,300 for reimbursing school bond debt. For many cities, towns and boroughs, that means taking on that cost in their own local budgets. There was a modification to thatsystem when the bottom fell out of the oil market. Because of revenueshortfalls, in 2015 the program was put on a five-year pause. Since then, whencities like Anchorage voted to take on bond debt knew they’d be shouldering thefull burden, up until 2020 when the moratorium was set to expire. Since the action does not affectASD’s operating budget, the reductions won’t be felt in classrooms, but morelikely by property owners. For the city’s tax-base, $20.5 million breaks downto about $60 more per every $100,000 of assessed value for a home, according tothe municipality’s budget office. For the average single-family home-owner,that equates to roughly $200 dollars more on his or her tax bill next spring.center_img Currently, ASD is working withthe city to figure out how Anchorage will absorb $20,538,645 it didn’t expectto be on the line for. Traditionally, the state would reimburse localgovernments for their school bond debt at somewhere between 60 and 70 percentof the construction project, according to Anderson. That means decades ago,when these bonds were approved by Anchorage voters, they would know that of thefull amount for a construction project, local taxpayers would ultimately becovering around a third of it. It was understood that under the Bond DebtReimbursement appropriation would pay for the rest.  “I would think within the municipalitythere would be a lot of discussions as to how we move forward,” Anderson said. But now, it’s unclear if thestate’s prior generosity will return when it comes to helping school districtsfinance major improvements. However, no decision has yet beenmade on whether that’s the route the city’s administration and assembly willtake.last_img read more