Gavel and scales

Gavel and scales

Judge dismisses Alaska bonding plan lawsuit

  • By BECKY BOHRER Associated Press
  • Thursday, January 3, 2019 6:53pm
  • News

JUNEAU — A state court judge has dismissed a challenge to former Gov. Bill Walker’s plan to use bonding to pay Alaska’s oil and gas tax credit obligations.

Superior Court Judge Jude Pate, in a written order dated Wednesday, granted the state’s request to dismiss the challenge by resident Eric Forrer.

Pate said his role is not to make economic policy judgments or second-guess the Legislature but to apply the law of the state Constitution as interpreted by the Alaska Supreme Court.

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

Lawmakers last year passed legislation to establish a new state corporation that would be empowered to sell up to $1 billion in bonds to pay off remaining tax credit obligations. Legislators previously voted to end a tax credit program geared toward small producers and developers because they said it was no longer affordable.

Pate said key to his order were a section of the constitution dealing with state debt and a state Supreme Court case involving a lease-purchase agreement. Within that context, Pate wrote that the bonding proposal passes constitutional muster.

Jahna Lindemuth, as attorney general under Walker, last year wrote the proposed bonds at issue with Walker’s plan would be “subject-to-appropriation” bonds, with payment contingent upon whether the legislature sets aside money for them each year.

She said the high court concluded in the lease-purchase case that the agreement did not constitute impermissible constitutional debt because the state’s obligation was subject to appropriation, the deal limited recourse against the state and it did not bind future legislatures.

Pate said the bonding proposal has similar features.

Forrer’s concern the proposal “may saddle future generations of Alaskans with a crushing economic burden are genuine and deserve serious consideration,” Pate wrote.

But, the judge added, the decision in the lease-agreement case shows when an agreement does not create a legally enforceable debt against the state, “the court should not engage in second guessing the wisdom of the legislature’s fiscal policy decisions, even when those decisions may have a negative impact on the State’s credit rating.”

Joe Geldhof, an attorney for Forrer, by email Thursday called the decision “a seismic shift in how Alaska deals with debt and interprets our state’s constitution and the impact of allowing this kind of non-debt ‘debt’ will likely be enormous.”

“The original framers of Alaska’s Constitution would be stunned at this kind of loose interpretation of our most fundamental organizational document,” Geldhof wrote.

Forrer said an appeal was probable.


• By BECKY BOHRER, Associated Press


More in News

Lisa Gabriel unfurls a set beach seine during a test fishery for the gear near Clam Gulch, Alaska, on Wednesday, July 9, 2025. (Jake Dye/Peninsula Clarion)
Seine test fishery continues after board of fish calls for more data

The east side setnet fishery has been entirely closed in recent years to protect Kenai River king salmon

Jason Criss stands for a photo in Soldotna, Alaska, after being named a qualifier for the Special Olympics USA Games on Thursday, July 10, 2025. (Jake Dye/Peninsula Clarion)
Soldotna athlete to compete in 2026 Special Olympics USA Games

Thousands of athletes from across all 50 states will be competing in 16 sports.

The entrance to the Homer Electric Association office is seen here in Kenai, Alaska on May 7, 2020. (Photo by Brian Mazurek/Peninsula Clarion)
HEA opens bids for real property

The deadline to submit bids is 5 p.m. on Aug. 11.

Arturo Mondragon-Lopez, Jr. (right) attends a change of plea hearing related to the October 2023 fatal shooting of Brianna Hetrick on Wednesday, Feb. 5, 2025, at the Homer Courthouse in Homer, Alaska. (Delcenia Cosman/Homer News)
Mondragon-Lopez sentenced for death of Homer woman

Arturo Mondragon-Lopez, Jr. accepted a plea deal in February for the shooting of Brianna Hetrick.

Soldotna City Hall is seen on Wednesday, June 23, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Soldotna OKs $395,000 capital plan

This year’s list of capital projects is “nominal compared to some past years,” according to officials.

A map of areas proposed for annexation by the City of Soldotna. (Provided by City of Soldotna)
Soldotna adds annexation proposal to ballot

The proposed annexation is split across five small areas around the city.

Nets are extended from North Kenai Beach in Kenai, Alaska, during the first day of the Kenai River personal use dipnet fishery on Thursday, July 10, 2025. (Jake Dye/Peninsula Clarion)
‘A really good day’

Kenai River personal use sockeye salmon dipnet fishery opens.

The entrance to the Kenai Peninsula Borough building in Soldotna is seen here on June 1. (Photo by Brian Mazurek/Peninsula Clarion)
Borough assembly to consider ordinance to increase residential property tax exemption

If approved by voters in October, the ordinance would increase the tax exemption by $25,000.

Vice President Kelly Cooper speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, July 8, 2025. (Jake Dye/Peninsula Clarion)
Borough considers seasonal sales tax rate

Borough sales tax would be modified from a flat 3% to a seasonal model of 4% in summer months and 2% in winter months.

Most Read

You're browsing in private mode.
Please sign in or subscribe to continue reading articles in this mode.

Peninsula Clarion relies on subscription revenue to provide local content for our readers.

Subscribe

Already a subscriber? Please sign in