For four decades, the state has reimbursed local governments for a majority of the cost of school construction and major maintenance projects. The reimbursement of those voter-approved school bonds has never really been guaranteed, however. It’s just been the official policy to do so when the money is available.
And the money has been available.
So, voters in local school districts — Fairbanks among them — have grown accustomed to the state reimbursement during the many years of the program.
Now, with the state facing a budget shortfall that is expected to run in the billions of dollars annually for several years, that bond program is in jeopardy.
Two bills — Senate Bill 64 and its House Bill 138 — would suspend the program for five years and then bring it back at a reduced reimbursement rate. The program now reimburses local governments up to 70 percent of a school construction project funded through locally approved bonds. That rate would drop to 50 percent when the program returns after five years under the two bills.
It’s difficult to argue in this extraordinarily difficult fiscal time, brought on by declining oil production and a plummet in the price of that oil, that this program should be spared. Lots of programs are going to be reduced or eliminated.
What can be argued, though, is the scope of the projects affected by suspending the bond reimbursement is unfairly broad.
The clear example of this in the Fairbanks region is the lengthy, multi-year renovation of 55-year-old Barnette Magnet School, the oldest school in the Fairbanks North Star Borough School District. Fairbanks voters previously approved bond packages for the first two phases.
It was hoped the final phase would be funded in full through the state’s capital projects list, but Barnette just missed the ranking cutoff. That led to discussion in Fairbanks about putting the final phase out as a bond proposal on the October ballot and obtaining the usual state reimbursement.
Appearance of the school bond reimbursement legislation complicates that thinking.
Would Fairbanks voters approve the bonds without the 70 percent state reimbursement, meaning that local property taxes would have to pay the full cost of that $12 million final phase?
Or would Fairbanks leaders decide to wait five years until the bond reimbursement program returns, albeit at a reduced level? Waiting that long for a project that has been underway for several years already and is nearing completion doesn’t make much sense.
A fair solution would be to exempt from the bond reimbursement suspension those programs like Barnette Magnet School that are underway or for which local voters already have authorized the issuance of bonds.
The savings to the state won’t be as much, of course, but allowing for such projects to proceed seems fair.
— Fairbanks Daily News-Miner,