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.

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

Sockeye salmon are gathered together at a test site for selective harvest setnet gear in Kenai, Alaska, on Tuesday, July 25, 2023. (Jake Dye/Peninsula Clarion)
Dipnets for commercial setnet fishers given emergency approval by CFEC

Up to three 12-hour periods of commercial dipnetting “may” be allowed each week from June 20 to July 31

Council member Dave Carey speaks during a meeting of the Soldotna City Council in Soldotna, Alaska, on Wednesday, June 12, 2024. (Jake Dye/Peninsula Clarion)
Soldotna explores increases to its water and sewer expansion fees

The fees are a single charge to people who are newly or differently demanding or utilizing the services of the city’s water and sewer system

Vice President Tyson Cox speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, June 4, 2024. (Jake Dye/Peninsula Clarion)
Assembly to discuss short-term rental tax on Tuesday

The resolution describes a proposed tax of up to 12%

Photo provided by Special Olympics Alaska Central Peninsula
The Special Olympics Alaska Central Peninsula team stands together for a photo during the Summer State Games in Anchorage.
Area athletes claim 45 medals at Special Olympics Alaska Summer Games

The Central Peninsula team fielded 17 local athletes in the competition

Ashlyn O’Hara/Peninsula Clarion
Rep. Justin Ruffridge, R-Soldotna, speaks in support of debating an omnibus education bill in the Alaska House Chambers on Monday, Feb. 19 in Juneau.
Ruffridge talks successes, unfinished business after freshman session in Juneau

Ruffridge is up for election this year, facing a challenger in former-Rep. Ron Gillham

tease
Homer, Seldovia to celebrate summer solstice

Events will be held starting June 20

A freshly stocked rainbow trout swims in Johnson Lake during Salmon Celebration on Wednesday, May 10, 2023, at Johnson Lake in Kasilof, Alaska. (Jake Dye/Peninsula Clarion)
Slow sockeye fishing at Russian River, good rainbow trout at Kenai Lake

A Northern Kenai Fishing Report published by the State Department of Fish… Continue reading

Council member James Baisden speaks in favor of an amendment to the City of Kenai’s budget that would add funds for construction of a veteran’s memorial column in the Kenai Cemetery during a meeting of the Kenai City Council in Kenai, Alaska, on Wednesday, June 5, 2024. (Jake Dye/Peninsula Clarion)
Kenai budget amendment allocates funds for veterans’ columbarium in cemetery expansion

A columbarium is an aboveground structure that houses cremated remains

Council member Alex Douthit speaks in favor of an amendment to the CIty of Kenai’s budget that would reduce funds allocated to the Storefront and Streetscape Improvement Program during a meeting of the Kenai City Council in Kenai, Alaska, on Wednesday, June 5, 2024. (Jake Dye/Peninsula Clarion)
Funding reduced for City of Kenai’s storefront improvement grant program

Just over a year after the City of Kenai established its Storefront… Continue reading

Most Read