Here is a transcript of the recording:
Welcome from Molly Sherman:
Hello and welcome to this broadcast sponsored by the League of Women Voters of Tanana Valley and KUAC FM. I'm Molly Sherman of the League of Women Voters and I'll be your moderator. Today's topic is Proposition A, a measure that will be on the ballot for borough voters in a special election on Tuesday, May 7th, 2020.
The League of Women Voters is a 104-year-old nonpartisan, non-profit organization whose aim is to encourage students or citizens to be involved in their government at all levels. It was formed in 1920 to educate newly franchised women voters. Now it serves all voters, but its primary focus is still voter education.
In that spirit, we have invited two presenters with opposing viewpoints on Proposition A. I will now read the Proposition A as it appears on the ballot:
“Shall the Fairbanks North Star Borough be authorized to increase its maximum allowable tax revenue for areawide taxes by $10,000,000 to fund education?
The additional tax revenue includes taxes from any areawide source, including property taxes, tobacco excise tax, hotel-motel room tax, alcoholic beverage tax, or marijuana and marijuana product sales tax. If the additional revenue is solely raised through property tax revenue, it is the equivalent of approximately 1 mill or $100 per $100,000 of assessed taxable value of real property."
Our speakers tonight are Morgan Dulian of Golden Heart Strong, who will ask you to vote yes to pass the measure, and Joshua Church of Citizens for Transparent Government, who will ask you to vote no to defeat it. Each speaker will have five minutes for an opening statement. Each will then have two minutes in rebuttal to the other speaker's points, and finally, Morgan and Joshua will have one minute each for closing comments.
We will go in the order that the choices are on the ballot. So, we'll start with Morgan Dulian, who supports a yes vote. Five minutes, Morgan.
Morgan Dulian:
Thank you so much, Molly. It's really a pleasure to be here tonight and to be here with Josh to talk about Prop. A. So thank you to the League of Women Voters and KUAC for hosting this conversation about Prop. A.
I'm Morgan Dulian, co chair of the Golden Heart Strong campaign. As a mother of three children, personally, I have a stake in this election. Professionally, I work in education finance. I've been raising funds for education, including building multimillion dollar endowments for nine years in Alaska. I respect Josh Church, who is here with me today.
We both want strong schools. Where we differ is how to pay for them. At the core of our disagreement is planning. Do we support one-time funding to be debated each year? Or, do we want long term budget planning that funds our schools sustainably every year? The opposition is thinking short term, specifically using reserves or saved money, money already allocated for other borough expenses, to patch our budget together.
Those who support Prop. A are thinking long term. We do not believe the Assembly should use reserves to pay for critical services such as education. So how did we get here today? To a special election on May 7th, which asks voters to reinstate $10 million to our tax revenue cap. As shown on page 118 of the FNSB Budget for 2025, the 2023 Assembly cut the tax levy by $10.5 million, which was $27 million below the tax revenue cap. This action caused our tax revenue cap to automatically reset down by $20 million. This $20 million reduction to our tax revenue cap is shown on pages 560 and 899.
Mayor Ward sponsored the ordinance to put forth Prop. A. As the mayor stated on page 8 of this year's budget packet, “we should fund the services we expect to have and budget for what we can afford. Sustainability in government services depends on the shift away from relying on one-time funding. We cannot rely on one-time funding for operational expenses.”
I repeat, stability depends on the shift away from relying on one-time funding. Our mayor is in favor of a long-term solution and our mayor put forth Prop. A.
So, let's talk about the school district budget. Will Prop. A save our schools from closing? No, and it shouldn't. The school board must address cuts while minimizing those that impact student performance. Things like teacher retention, class sizes, and student activities.
Is Prop. A our only solution? No, it's not. We still need to address flat and one-time funding from the state. So why do we need Prop. A? Prop. A is needed now to address the local contribution needs of the school district based on carefully considered cuts they recommended for the upcoming school year, including the closure of another school and increasing all class sizes by one student, except for kindergarten.
Prop. A provides a predictable and stable local contribution so the school district can consider longer-term strategic planning around reductions that work for our community. Since 2015, the borough has funded the school district between $49 million and $54 million annually. Last year, the Assembly gave 5$0 million and then added $4 million to that from one-time funding.
This year, the school district is requesting $64 million from our borough and has assumed flat funding from the state. However, the recommended budget put forth by the mayor only includes a $54 million contribution to the school district. This difference of 10 million is what Prop. A addresses.
So what might Prop. A cost homeowners? If Prop. A passes and the Assembly only uses property tax to raise $10 million for education, that would equal $100 for every $100, 000 in property value. So, I ask, do you want to think short term or long term about education funding? The reality is that we have a $64 million school budget in place for next year, but our borough only has $54 million budgeted.
And the school budget cannot be cut any further without doing serious damage to student performance. We need $10 million locally to meet the current needs of our schools. In the short term, the Assembly could cut the check today for the schools and create a new $10 million hole to fill elsewhere in the borough budget. We could patch our school budget together with one-year Band Aids, setting us up for the same school budget debate next year.
Or, Prop. A could provide $10 million for our schools for the long term. Prop. A provides planning and stability and reliability. By providing stable funding, Prop. A could help attract and retain teachers and families to our community. We have to pay for the strong schools that we all want. Prop. A is the fiscally responsible way to pay. This is why I encourage you to vote yes on Prop. A on May 7th.
Molly Sherman:
Thank you, Morgan. Now we will hear from Joshua Church, who supports a no vote. Five minutes, Joshua.
Joshua Church:
Thank you all for listening. Thank you to the League of Women Voters for putting this on and for my, uh, Colleague sitting across from me helping to facilitate a civil discourse where the voters can be informed.
There are some key points that I disagree with. We don't disagree with the values. We all want strong schools. We all have kids here. I have two kids myself. I work in investment service. I care about this community. Education is important. I graduated from UAF here.
So, we're not having a disagreement on values. We're having a disagreement on the means and the method in order to fund this. So, the first thing that I would present to voters is, you're being asked to have a special election, an emergency vote to fund this school because we can't wait five more months till the regular election. So instead, we're going to run an election that's going to cost $125,000 because it's an emergency.
The school district has $8 million in emergency reserves. The borough has over $35 million in emergency reserves. But for some reason, they couldn't to put it before the regular voters where there's likely going to be a higher turnout. They had to rush it in with a lower turnout to give it the appearance of an emergency.
The school district has had a funding problem for a long time. This is not a surprise to anyone. I disagree with the idea that, and I think they're playing politics, to do a special election. We all agree, the check from the borough could be written tomorrow or yesterday to fund this and carry us through where we can have some longer-term planning.
Now let's talk about the longer-term planning that should have already been done. The borough has built up a savings of $35 million off of what? Taxes that has happened. There was a slight tax cut in the previous assembly, it wasn't $10 million, but that tax cut still allowed these reserves to continue to grow and grow above the minimum reserve requirement that the borough sets.
The borough wants $28 million as a reserve. They have $35 million above that. So, they're sitting on cash and instead of writing the one-time and then sitting down as an assembly and figuring out what the long-term solution is, they say, “let's host an emergency election that'll cost extra money to trick the voters into thinking this needs to happen right now and there's no other, there's no other plan for it.”
In addition, you’re being told this money is dedicated for education. It's not. You can't do that in the Alaska Constitution. This money will go as a general tax increase to the General Treasury. Now, will they give the borough, the school district, uh, the extra $10 million from the borough? I'm sure they will. The borough has basically, uh, said in multiple different conversations, that they're going to fund the school districts whether this passes or doesn't pass.
So, the reality is, what you're being asked is, schools are important, we all agree, so we want a tax increase. We'll say it's for school funding, but really it's so we don't have to take any money out of our extra savings or we don't have to reprioritize any other spending.
What other spending could they reprioritize? While they're gonna spend $33 million on a new animal shelter, that's the estimate, and they haven't broke ground. Most of us that are familiar with construction know that the costs are gonna increase once you start construction. So we're probably looking at $35 to $40 million for an animal shelter. My guess is if the ballot proposition said, do you want to increase taxes by $10 million to pay for a animal shelter for the next four years, the voters would say no. So, this is a bait and switch. We all support strong schools, but the Borough Assembly needs to sit down and figure out a responsible plan to fund it.
The Borough Assembly already funds $15 million over the state requirement. They've been a consistent, uh, funder to the district for years. They fund with inflation adjusted per student. They have increased spending over the last half a decade.
If we as a community want to fund more, there is the money available at the borough and there are other solutions to raise it without raising taxes at a time when some people in this community are struggling. The cost of living in Fairbanks is higher than the national average by about 25%. Credit card debt in the nation is the highest it's ever been, and the population over the last 15 years in Fairbanks has been significantly declining. So whether you can afford it or not, many people can't afford taxes. Don't raise taxes when we have the money already.
Molly Sherman:
Thank you, Joshua. Now you will each have two minutes for a rebuttal. Morgan, two minutes.
Morgan Dulian
Yeah, thank you so much and Josh, thank you. I think that it's really important to state that we absolutely both agree and I think everyone on both sides of this agrees that schools are important and the value there is something that we all agree on.
But let's talk a little bit about that guaranteed funding. So the great thing about America is that we live in a democracy where the voters keep our elected officials accountable. At present, our elected state officials cannot agree on how to fund education in Alaska, despite having an unquestionable constitutional obligation to provide public schools.
This, combined with our local Fairbanks Assembly elected officials dropping our tax revenue cap by $20 million dollars last year. Last year, creating a very limited and limiting local contribution to our schools means we just don't have the money that our schools need to function. Both state and local elected representatives have helped to create this budget bind for our schools.
And we will remember next November at the polls. You're right. We can't guarantee this funding for education for the long term. But the democratic process guarantees our ability to hold our elected officials accountable and vote them out if they break with values. And let's discuss the money your you recommended short-term one-time funding from reserves or surplus funds to balance our school budget.
The money in the debt service fund was given to us from the state as a lump sum meant to pay off bond debt. That money is spoken for. The school district has $8 million in reserves. It spends about $18 million a month in expenses. They should have at least that much in savings. The borough's $9. 5 million in general fund balance, just like the school district's surplus, and the one-time funding for the animal shelters, are one-time solutions.
If we use reserves and surplus, we're just kicking this can down the road. As stated by the mayor, Prop. A addresses stability. How can we expect to increase student performance if we cannot keep and retain good teachers in Alaska?
Molly Sherman:
Now it's Joshua Church's time for rebuttal.
Joshua Church:
I agree we don't want to just use one time funding, but we didn't need a special election. We had the money to pass it through, and then we could have done this at a regular election, or the school board and the borough and the state could have been responsible, and can in the future, too -- What long term solutions are there? I mean, there's many, but I personally went to the borough and testified a few months back on a ordinance to create an endowment fund for the school district.
It was voted down because they didn't want to set aside long term funding for the school districts. I testified in favor of that. The borough sits on 70,000 acres. Borough land that is not designated for a park or any purpose. You're talking about somewhere around $150 million of land that could be sold.
There are lots of long-term solutions that could create, uh, sustainable funding for education, but instead we're playing politics and hosting emergency elections because it sells better.
Molly Sherman:
Thank you both. Now we have time for a one minute closing statement from each of you. Morgan.
Morgan Dulian:
Yeah, thank you. And Josh, I really want to say that I, I really like your idea of an endowment. And if I were on the assembly, I would have absolutely voted to put that in place. If we all want, we all want strong schools.
We all want to support teachers and attract and retain hardworking families. We just agree. On how to pay for what we all want. Prop. A is not an emotional response to this funding crisis. Prop. A is a fiscally responsible and widely called for response to better this community. Those opposed to Prop. A suggest using one-time funding and deficit budgeting to balance our school budget.
This short term thinking puts our community on a direct path to a fiscal cliff. Prop. A will reinstate $10 million to our tax revenue cap and will stabilize funding for education locally this year and for the long term. And I'd like to point out, Prop. A maintains a tax revenue cap that is still $10 million lower than it was in 2022.
Fairbanks and North Pole voters, it's time we take responsibility and support hardworking Alaskan families by stabilizing our local contribution for education, which is why I'm voting yes on Prop. A on May 7th.
Molly Sherman:
Next, final comments from Joshua.
I'm urging voters to understand they should vote no. Get out and tell your neighbors.
At a time when inflation has been rising, taxes has already been rising, there are certain working families that are struggling in this community. Our population has been declining. The borough has the money in short term, and they have the resources and the money in long term planning to solve this. We can have good schools and a good community, but if we raise taxes and allow inefficient government and poor planning to continue to draw, it will continue to drive people out of this community. Good schools are important, but so is a low cost of living.
Molly Sherman:
Thank you to both of you, Morgan Dulian of Golden Heart Strong and Joshua Church of Citizens for Transparent Government for speaking today. And now I'm going to read the proposition again correctly, although you guys both got it right. And this is the Proposition A as it reads on the ballot:
“Shall the Fairbanks North Star Borough be authorized to increase its maximum allowable tax revenue for areawide taxes by $10,000,000 to fund education?
The additional tax revenue includes taxes from any areawide source, including property taxes, tobacco excise tax, hotel-motel room tax, alcoholic beverage tax, or marijuana and marijuana product sales tax. If the additional revenue is solely raised through property tax revenue, it is the equivalent of approximately 1 mill or $100 per $100,000 of assessed taxable value of real property."
Thank you for listening. I would like to say that we urge you to vote. To vote local, this is your community, and cast a vote in the special May 7th election.
There are several ways to vote, including you can vote early, which started on April 27th. You can vote by mail if you applied for an absentee ballot by April 30th. Or you can vote in person at a polling place on May 7th. Please go to the Borough Elections information page on the Fairbanks North Star Borough Clerk's website to find out how you can vote in these and other ways.
Also, check the website of the League of Women Voters of Tanana Valley for online voter guides that include a link to the Borough Elections page. Thank you for joining us, and thank you for voting in this special May 7th election.