Mat-Su eyes $60 million in debt payments if Dunleavy's budget passes

Proposed budget cuts would stick the Mat-Su Borough School District with $39 million in debt...
Proposed budget cuts would stick the Mat-Su Borough School District with $39 million in debt otherwise covered by the state. (KTUU)
Published: Feb. 26, 2019 at 10:39 PM AKST
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The governor's proposed budget for fiscal year 2020 is echoing across Alaska, and the Mat-Su Assembly began considering what the cuts might mean for the borough at a special meeting Tuesday night.

According to a memorandum prepared by Mat-Su Borough Manager John Moosey, the proposed budget cuts would impact over 50 percent of the borough’s operating budget. The impacts would be felt in the form of bond debt reimbursement for projects involving the port, as well as school debt service reimbursements. The total hit to the borough would be around $21 million, and the Mat-Su Borough School District around $39 million.

Mat-Su Borough School District Superintendent Dr. Monica Goyette addressed the assembly, saying the Dunleavy Administration is moving debt from the state’s hands to local governments.

"Sixty percent of the proposed cuts and reductions that he has are really a cost-shifting to local government," Goyette said.

Borough assembly members say the hammer will hit hardest on bond debt approved in 2011 to build new schools in the Mat-Su Borough School District.

If the proposed budget does go into effect, it sticks the borough with millions of dollars of bond debt to be paid off over 15 years.

According to the assembly, when the governor served on the Mat-Su School District School Board is when he was also a swing vote to approve using school bond money to build six new schools.

The proposal asked for $218 million, and the state would cover 70 percent while the borough had the remaining 30.

Mayor Vern Halter says the budget is fair because it affects institutions across the state. “It’s a proposal that has certainly got everyone’s attention,” he said. “It’s fair across-the-board, across the state, because just about everybody got zapped.”

But Halter says he feels like a business partner is going back on his word, and that’s harder to forgive.

"This is the one issue that probably bothers me the most, is to renege on a partnership — and that's what it is, it's a simple partnership," Halter said.

Assemblyman Jim Sykes says the 2011 school bond passed with significant public support, but the Walker Administration actually shrank the payment difference so the state and borough paid equal shares of the debt reimbursement. Gov. Dunleavy’s proposal would shift all of that payment onto the borough.

If the budget is approved, Sykes says there are only a few ways to look at moving forward: “There’s only really two choices in government -- either you have to make cuts, or you have to raise revenue, or you have to do a combination of both.”

Assemblyman Dan Mayfield of Big Lake went as far as to say the governor is alienating himself from municipalities.

“In my opinion, the governor has kind of declared war on municipalities and on the folks who are the most vulnerable in our society,” Mayfield said. “And this is a classic example of ideology taking priority over practicality.”

Jim Sykes says the borough is cutting costs here and there where they can, and will continue working with representatives to voice their concerns in Juneau -- all the while working up to deadline to build a working budget.