Judge Hears Arguments On Stay In Education Lawsuit

Ketchikan Superior Court Judge William Carey heard arguments Friday over whether he should approve a stay of his January decision that the State of Alaska’s requirement that local communities provide a specific amount for public education violates the Alaska Constitution.

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Kathryn Vogel is an Assistant Attorney General with the Alaska Department of Law, and she argued on behalf of the state. Participating by phone from Juneau, she argued that the state clearly would be irreparably harmed if a stay is denied, the borough would not suffer if a stay is approved, and that the state believes it has a good chance of succeeding in its appeal to the Alaska Supreme Court.

Those are the three legal elements needed for a stay to be approved.

Ketchikan Gateway Borough officials attend Friday’s hearing in Judge William Carey’s courtroom.
Ketchikan Gateway Borough officials attend Friday’s hearing in Judge William Carey’s courtroom.

In his January decision, Carey ruled that municipalities should not be required to pay for public education because the required local contribution is essentially a tax earmarked for a special purpose. Carey said that is a violation of the state Constitution.

Soon after his ruling, the state filed an appeal with the Supreme Court, and asked for a stay pending the high court’s decision in the case. Vogel said the stay is extremely important because the Legislature needs to know now what to do about funding public education for the entire state.

“This invalidation is without sufficient time or sufficient information,” she said. “We’re 30 days into a 90-day (legislative) session. The governor’s budget and the governor’s revised budget did not provide for any other source of funding to help fill the gap that required local contributions currently fill.”

The state funds the largest portion of the annual bill for public schools, but historically, boroughs and first class cities have been required to pay the equivalent of a 2.65 mill property tax. That’s what Carey ruled is unconstitutional, but the state wants the requirement to remain in place until the Supreme Court finally decides the matter.

Vogel said the borough wouldn’t necessarily be even a dollar worse off than it is now if the stay is approved. That’s because it’s unknown how the state would respond to that aforementioned funding gap.

“We don’t know, if there was some other solution for raising revenue, how much it would cost the people of Ketchikan or the borough,” she said.

Vogel concluded with the argument that the state has a likelihood of success with the Supreme Court.

“It’s a road they’re not going to want to go down, in terms of invalidating local funding pf public schools,” she said.

Carey interrupted: “Maybe it’s not a road I may have wanted to go down, but I had to look at the legal issue and that was my determination.”

Vogel responded that the Supreme Court is in a different position, and might not feel as bound to its own prior case law as the lower court.

The borough’s attorney, Louann Cutler, had a different take on pretty much everything Vogel argued. Cutler said there is no irreparable harm to the state, because the Legislature is free to provide as much or as little for public education as it wants.

“The Legislature legislates; the court makes legal decisions,” she said. “You’ve already made a difficult one, and you’ve got to make another difficult one after you’ve heard our arguments, but defendants have not met their burden to establish that a stay is necessary just because there’s a lot of money at stake.”

Cutler pointed out that nobody from the Legislature has intervened or submitted an affidavit on the state’s behalf in this case, nor have any school districts or members of the public. She said that all of the state’s claims of harm are possible scenarios, not proven facts.

“This is nothing more than Chicken Little tactics, and it’s based solely on rank speculation about non-parties to this litigation,” she said.

Cutler said the borough would be harmed by a stay, though, because there is no realistic way to recoup the required local contribution once it’s been paid.

Cutler also argued that the state is not likely to win the case on appeal, unless the Supreme Court decides to overturn prior related decisions that a dedicated tax is illegal.

The state also has argued that the Constitution allows for state-local cooperative programs, but Cutler said this is not really a cooperative program.

“How hard is it going to be to convince the Supreme Court that this is a voluntary state-local cooperative effort, when it is a required local contribution, that if it isn’t made, school districts get penalized?” she said.

During her arguments, Vogel cited some case law that hadn’t been brought up before, and Judge Carey said he’ll need time to review it and Cutler will need time to respond.

Carey said he understands that the state is anxious to get a decision, and he will work on the case over the weekend. As for a ruling on the stay?

“I want to get a decision done on this, obviously as soon as possible,” he said. “I’ll shoot for Monday. That’s all I can say.”

State attorneys also have filed a motion for a stay with the Alaska Supreme Court, but the high court announced that it would wait and see what Carey decides before making its own ruling on that motion.

About 20 people sat in the audience at Friday’s hearing, most representing the Ketchikan Gateway Borough. They included the mayor, Assembly members, borough manager, assistant manager, clerk and finance director, and the superintendent of the Ketchikan School District.