IN THE SUPERIOR COURT FOR THE STATE OF ALASKA
FIRST JUDICIAL DISTRICT AT JUNEAU

TI-IE ALASKA LEGISLATIV COUNCIL,
On Behalf of THE ALASKA STATE

. 'ICouns
LEGISLATURE, Filed in the Ina

STATE OF ALASKA, FIRST DISTRICT
AT JUNEAU

NOV 0 EL 2019
By Deputy

Plaintiff,

V.



HONORABLE J. DUNLEAVY, 
In His Of?cial Capacity as Governor of the 
State of Alaska, KELLY TSHIBAKA, In Her
Of?cial Capacity as Commissioner of
Administration for the State of Alaska, and
MICHAEL JOHNSON, In his Of?cial
Capacity as Commissioner of Education and
Early Development for the State of Alaska,

Case NO. 
and

COALITION FOR EDUCATION
EQUITY,

ORDER RE: CROSS MOTIONS
FOR SUMMARY JUDGMENT

DefendantsIntervenor. 

Before the court are cross motions for summary judgment ?led by the parties
pursuant to their agreement which was adopted by the court on August 20, 2019. Oral
argument was held on October 4, 2019.

This case requires the court to determine whether the Governor of Alaska, acting in
his of?cial capacity and through his co?defendants (collectively, c?Defendants?), has a duty
under the Alaska Constitution to execute funding appropriations passed by the Thirtieth
Legislature in 2018 and signed into law by the prior sitting governor in 2018 despite delayed
effective dates of July 1, 2019 (the first day of Fiscal Year 2020), which is the second
forthcoming ?scal year from the date the appropriations were enacted. The Alaska
Legislative Counsel (?Plaintiff?) and the intervenor the Coalition for Education Equity
(?Intervenor?) argue that he does. The Defendants argue there is no such obligation because
the appropriations violate the state constitution due to their delayed effective dates.

The Plaintiff ?led its Der/mum]: and [winterize cm Areal/Ming on
July 16, 2019. The complaint alleges that HB 287 was passed by the legislature and signed by

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then?Governor Bill \Valker on May 4, 2018. HE 287, which in relevant part became SLA
2018, Ch. 6, 4, and had effective dates ofJuly 1, 2019 under 8, which is the
first day of FY2020. The law appropriates funding for public school districts and for
transportation of students as well. as one?time additional money for public schools for
FYZO20. The complaint further alleges that the Defendants failed to execute or disburse the
appropriated funds for public school districts for FYZO20, which would prevent public
schools from operating during the 2019?2020 school year.1

The Plaintiff brought three claims for relief, one for each of the three appropriations
in SLA 2018, Ch. 6 at issue: 4, and The claims each allege that the
Defendants failed to execute the appropriations pursuant to AS 14.17.610(a) (distribution of
state school aid); that this failure infringes on the legislature?s ability to maintain a system of
public schools under Art. VII, 1 of the Alaska Constitution; that this failure infringes upon
the legislature?s power of appropriation under Art. IX, 13; that this failure violates the
separation of powers doctrine; and that this failure violates the governor?s duty to faithfully
execute the laws under Art. 16.

All parties agree that the case poses purely legal questions and that no issues of
material fact exist that impede resolution by summary judgment. The Plaintiff argues that the
Defendants bear the burden?and are unable to meet the burden?of demonstrating that
the appropriations in SLA 2018, Ch. 6 violate the Alaska Constitution. They argue that the
appropriations are entitled to a presumption of constitutionality and thus the Defendants are
duty bound to execute them pursuant to statute. The Defendants contend that the
appropriations violate the Alaska Constitution and thus the governor has no duty to execute
them. They argue that the appropriations at issue are unconstitutional dedications, violate the
state?s annual appropriation model, violate the legislature?s power of appropriation, and
violate the governor?s veto power.

Summary judgment is proper if there is no genuine factual dispute and the moving

party is entitled to judgment as a matter of law.2

 

1 As part of a stipulation entered into by the parties and approved by this court on July '16, 2019,
funding for education for the 2019-2020 school year is being expended during the pendency of this
suit.

3 Denim av. Grew? Dill/?e Tm: Ca, 350 P.3d 782, 785~86 (Alaska 2015).

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A party raising a constitutional challenge to a statute bears the burden of
demonstrating the constitutional violation. A presumption of constitutionality applies and
doubts are resolved in favor of constitutionality.3 The Plaintiff seeks relief requiring the
Defendants to execute the appropriations at issue, and the Defendants contend that the
appropriations violate certain provisions of the Alaska Constitution. Because the Defendants
are raising a constitutional challenge to the Ch. 6, SLA 2018 appropriations, they bear the
burden to overcome the presumption of the statute?s constimtionality.

A court?s analysis of a constitutional provision begins with, and remains grounded in,
the words of the provision itself.4 The court is not vested with the authority to add missing
terms or hypothesize differently worded provisions to reach a particular result.5 The court
instead must look to the plain meaning and purpose of the provision and to the intent of the
framers.(1 The court must give effect to every word, phrase, and clause of the Alaska
Constitution. Seemingly conflicting parts are to be harmonized, if possible, so that effect can
be given to all parts of the constitution.7 An argument by either party that similar
appropriations as those at issue in this case have or have not been employed previously has
no bearing on the court?s analysis; what matters is what the Alaska Constitution says.8

The Plaintiff and Intervenor assert that the legislature validly enacted the
appropriations pursuant to Art. IX, 13 and Art. II, 1 (?Public Education Clause?) of the
Alaska Constitution. The legislature?s power of appropriation under Art. IX, 13 provides
that, money shall be withdrawn from the treasury except in accordance with
appropriations made by law. . . The Public Education Clause provides that, ?[t]he
legislature shall by general law establish and maintain a system of public schools open to all
children of the State.? The clause specifically imposes a duty upon the state legislature, and it
confers upon Alaska school age children a right to education.g The legislature bears the sole

responsibility and authority to maintain the public school system in Alaska.? Therefore,

 

3 Cow/770;} Lair/garage, Im'. a. Kai/g, 170 P.3d 183, 192 (Alaska 2007).
4 a. 403 P.3d 1141, 1146 (Alaska 2017).

5 Id.

?3 Id.

7 xii/dike: Cari/Labez?w? Um'wz a. fizzle, 122 P.3d 781, 786 (Alaska 2005).

3 llf?z'dcrbowi?z?z', 403 P.3d at 1152.

Hog/vb a. Aimed Stare?Opmlled 517/3. 536 P.2d 793, 799 (Alaska 1975).

1" Martyr/g)! a. int/6mm, 491 P.2d 120, 122 (Alaska 1971).

lili: Cl? 185 AH Case 1] 
Page 3 of 10

both clauses together vest the legislature with the prerogative and responsibility to
appropriate money for the purpose of maintaining a system of public education in Alaska.

The legislature may enact an appropriation ?for a public purpose,?? and a ?nding by
the legislature that an appropriation is for a public purpose is valid unless it is arbitrary and
without any reasonable basis in fact.12 The parties do not dispute that the SLA 2018, Ch. 6
appropriations at issue are rational and for a valid purpose??1naintaining public education in
Alaska for FY2020. The legislature determined that the passage of the state?s operating
budget late in the annual legislative session posed a specific problem for the Alaska public
education system because it provided insufficient notice to school districts of the extent of
their budget for the forthcoming school years. The legislature determined that insuf?cient
notice resulted in budget uncertainty, which in turn diminished the public school system?s
effectiveness in attracting and retaining qualified educators for each forthcoming school
year.

To solve this apparent problem the legislature passed HB 287, which was signed into

law as SLA 2018, Ch. 6 early in the legislative session on May 4, 2018.13 The statute

 

11 Alaska Constitution, Article IX, 6.

'3 Dexlr?mo?d a ?lter/ea Skiff? D621. Corp, 376 P.2d 717, 721 (Alaska 1962).

17' SLA 2018, Ch. 6 states in relevant part:
Sec. 4. DEPARTMENT OF EDUCATION AND EARLY DEVELOPIVTENT. The sum of
$30,000,000 is appropriated from the general fund to the Department of Education and
Early Development to be distributed as grants to school districts according to the average
daily membership for each district adjusted under AS (D) for the fiscal
year endingjune 30, 2020.
See. 5. Fund Capitalization. The amount necessary to fund the total amount for the fiscal
year ending June 30, 2019, of state aid calculated under the public school funding formula
under AS estimated to be $1,189,677,400, is appropriated from the general
fund to the public education fund (AS 14.17.300).
The amount necessary, estimated to be $578,184,600, to fund transportation of students
under AS 1409010 for the ?scal year endingJune 30, 2019, is appropriated from the general
fund to the public education fund (AS 14.17.300).
The amount necessary to fund the total amount for the fiscal year ending June 30, 2020,
of state aid calculated under the public school funding formula under AS 14.17.410(b) is
appropriated from the general fund to the public education fund (AS 14.17.300).
The amount necessary to fund transportation of students under for the
?scal year ending June 30, 2020, is appropriated from the general fund to the public
education fund (AS 14.17.300).
Sec. 6. LAPSE. The appropriations made in sec. 5 of this Act are for the capitalization of a
fund and do not lapse.
Sec. 7. CONTINGENCY. The appropriations made in secs. 4 and 5(c) and of this Act
are contingent on passage by the Thirtieth Alaska State Legislature and enactment into law
of a version of Senate Bill 26.

ORDER RH: (21? MOTH Case Cam? Swim;
Page 4 of 10

appropriates the money necessary for public school funding and transportation of pupils

from the general fund to the public education fund for FY2019.H 4, and of the

 

statute?the appropriations at issue appropriate $30 million from the general fund to the
department of education and early development as grants and appropriates the money
necessary for public school funding and transportation of students for with
delayed effective dates of July 1, 2019.16

The forward-funding of public education intended to be achieved with the delayed
effective dates of July 1, 2019 for the May, 2018 appropriations was an effort by the
legislature to provide advanced budget notice and certainty to public school districts for the
2019?2020 school year. The legislature?s chosen solution to the actual or perceived problem
in public education is rational. The Alaska Supreme Court has explained that the statutory
structure for funding public education in Alaska is established pursuant to the legislature?s
mandate and responsibility to maintain a system of public education under the Public
Education Clause.17 Therefore, because the SLA 2018, Ch. 6 forward?funding
appropriations were passed for the purpose of addressing an apparent problem with public
education funding, the appropriations were enacted in furtherance of ful?lling the
legislature?s mandate to maintain a system of public education under the Public Education
Clause.

Art. IX, 7 (?Dedicated Funds Clause?) of the Alaska Constitution provides that,
?the proceeds of any state tax or license shall not be dedicated to any special purpose . . . 
The mam/z (/2717? of the Dedicated Funds Clause is to prevent the fiscal evil that results from
the dirninishrnent of the governor?s and legislature?s control over the finances of the state by
requiring the legislature to decide funding priorities annually on the merits of the various
proposals presented.l8 \?Vhen the legislature commits a particular public revenue source by

appropriation to be spent only for a particular funding object, the legislature violates the

 

Sec. 8. Sections 4 and 5(c) and of this Act take effectjuly 1, 2019.

See. 9. Except as provided in sec. 8 of this Act, this Act takes effectjuly 1, 2018.
'4 SLA 2018, Ch. 6, 
15 SLA 2018, Ch. 6, 4, 
16 SLA 2018, C11. 6, 8.
'7 See, State a Karenina/r Gateway Borg/(gig 366 P.3d 86, 87?88 (Alaska 2016).
18 Saline/72m? Hit/(ad, 836 13.2.4936, 936? (slim/ea 7992). See, aim, 5 Mia a Keir/mew: Gateway! Borong, 366
P.3d at 101; Start? xii/ex, 646 P.2d 203, 209?10 (Alaska 1982) (citing ALASKA STATEHOOD
COB-TMITTEE, CONSTITUTIONAL STUDIES pt. IX, 29?30 (1955), and 6 ALASKA
CONSTCONV. PROCEED., app. V, at 111).

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Dedicated Funds Clause because the funding object is no longer required to compete along
with everything else for the right to receive the funds from the revenue source.? \When the
legislature makes a prohibited dedication it diminishes the control over the free and
unimpeded disposition of those funds from the legislature in future years despite the
continuing power of the legislature to amend or repeal the dedication.

An appropriation or statute can impermissibly dedicate funds in various waysf? but
only the dedication of a particular source of public revenue license, rental, sale, bonus?
royalty, royalty, or whatever?) is a direct violation of the Dedicated Funds Clause.21 Our
supreme court has explained how the clause was limited by amendment at the Constitutional
Convention to allow for the setting up of certain special funds such as sinking funds for the
repayment of bonds, but to prohibit the earmarking of any special tax to that sinking fund.32
Thus, the clause in its final form was intended to allow necessaiy dedication of funds once
they were received and placed in the general fund.23

This interpretation appears to lead to the conclusion that general treasury revenue?
but not a particular revenue source?can be appropriated to a fund for expenditure without
further appropriation and without directly Violating the Dedicated Funds Clause. By logical
extension, forward?funding appropriations with delayed effective dates of the second
forthcoming fiscal year from the date they were enacted, like those at issue here, do not
directly implicate the Dedicated Funds Clause. The appropriations do not earmark a
particular public revenue source, which would impact future revenue, but instead
appropriate treasury revenue after it is deposited in the general fund. Therefore, the
appropriations at issue do not directly violate the Dedicated Funds Clause.

The Defendants contend that the forward-funding appropriations at issue violate the
state?s so?called annual appropriation model because the appropriations take effect in the
second forthcoming ?scal year (on July 1, 2019) from the date they were enacted (on May 4,
2018). The Defendants point to Art IX, ?12, which requires the governor to submit to the

legislature ?a budget for the next fiscal year setting forth all proposed expenditures and

 

'9 Some/72cm, 836 P.2d at 940.

3? 5/0296 Ke/oiajiezilz Gama/:33} Borong. 366 P.3d at 99; me, (?Ellw?rlfh/j?, 836 P.2d 936; foal/Jean
flatter! Cbmezm?a/i Cowai/ a. 5mm, 202 P.3d 1162 (Alaska 2009).

2] :l/ex, 646 P.2d at 210; a dizzy/ea [-lozzi'. FM. (Twp, 68 P.3d 386, 392?93 (Alaska 2003).

33 New. 646 P.2d at 210.

33 Id.

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anticipated income of all departments, offices, and agencies of the State.? The Defendants
point to Art. IX, 8, which generally prohibits the State from contracting state debt (with
some exceptions). The Defendants point to Art. IX, 10, which permits the State to borrow
money to fulfill appropriations for any fiscal year in anticipation of the collection of
revenues for that same year, ?but all debt so contracted shall be paid before the end of the
next ?scal year.? The Defendants also point to Art. IX, 33 17(d), which mandates that the
amount of money in the general fund available for appropriation at the end of a fiscal year
be deposited in the constitutional budget reserve fund until any prior appropriation from
that fund is repaid.

The Defendants argue that a requirement that appropriations take effect the
following fiscal year from the date they are enacted is either expressly provided for, or
implied, by the aforementioned clauses of the Alaska Constitution. However, none of the
above clauses?either alone or in conjunction with each other?explicitly mandates this.
Nor do the clauses implicitly prohibit a delayed appropriation effective date of the second
forthcoming fiscal year from the date of enactment. At most, the clauses, read together,
express an aspiration that the legislature appropriate general revenue to be expended during
the forthcoming ?scal year. The SLA 2018, Ch. 6 appropriations at issue are presumed
constitutional and the court is absolutely restricted from reading into the constitution absent
or missing language.24

The Dedicated Funds Clause seeks to preseive an annual appropriation model which
assumes that not only will the legislature remain free to appropriate all funds for any purpose
on an annual basis, but that government departments will not be restricted in requesting
funds from all sources.25 But as explained above, the appropriations at issue do not directly
violate the prohibition on the dedication or earmarking of a particular revenue source, which
is the particular fiscal evil for which the clause was adopted.

Moreover, the SLA 2018, Ch. 6 appropriations were 2018 appropriations because
they authorized the expenditure of money from the general fund on their July 1, 2019
effective dates without further legislative action.26 Accordingly, the sitting governor had the

ortuni .1 to recommend the alternative ex enditure of the a ro riated funds fame/MIL 836 P.2d at 94-0; illym?, 68 P.3d at 389.
3? See, Hanoi Cowper, 874 P.2d 922, 933 (Alaska 1994).

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submitting the governor?s annual budget under Art. 1X, 12, and had the opportunity to
veto the appropriations after they were passed by the legislature in 2018 under Art. ll, 15.
Because SLA 2018, Ch. 6 consists of 2018 appropriations, had the governor vetoed the
appropriations the legislature would have had to overcome the vetoes by a vote of three?
fourths of its membership for them to become law}? Therefore, the 2018 appropriations at
issue, despite their delayed effective dates of july 1, 2019, are entirely consistent with the
Alaska Constitution?s annual appropriation model.

It is possible to say that the 2018 appropriations curtailed to a degree the 2019
legislature?s control over the appropriated money from the general fund. But the 2019
legislature certainly had the power to amend or repeal the appropriations at issue before their
effective dates with a simple majority vote in both houses.28 Even so, to the extent that the
appropriations could be said to undermine the spirit of the state?s annual appropriation
model embodied in the Dedicated Funds Clause, the model?s spirit is outweighed by the
legislature?s power of appropriation and its specific prerogative and responsibility to
maintain the Alaska public education system under the Public Education Clause. This is
consistent with the Alaska Supreme Court?s reasoning and conclusion in Nib/err where it had
to weigh multiple competing values in assessing whether an appropriation indirectly
contravened the Dedicated Funds Clause. The ill/{yen court ultimately determined that the
prohibition on dedicated funds had to yield to the legislature?s power to manage and
appropriate the state?s assets.?

While Alaska?s constitutional framers sought to protect state control over state
revenue and to ensure legislative flexibility over the disposition of revenue sources, and to
limit certain powers and to avoid certain pitfalls, it is also apparent that the framers did not
intend to prevent the state from experimenting and adapting to changing circumstances.all
Simply put, the forward?funding appropriations here do not constrict the legislature?s power
over free disposition of state funds to such a degree that they exceed the legislature?s

freedom to experiment and adapt to the changing circumstances and hurdles of the day,

 

37 AK CONST. ArtArt. ll, 14-. Although this power is seemingly identical to the legislature?s power to
amend or repeal a prohibited dedication made in a previous year.

3? ?ber. 68 P.3d at 391?94.

See. State Karenina/7 Gateway Balm/Lela, 366 P.3d at 94.

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particularly in the field of public education. The presumption of constitutionality that
attaches to the appropriations at issue has not been rebutted.

This conclusion is necessarily limited to the particular appropriations at issue, which
have delayed effective dates of the second fiscal year from the date that they were enacted,
were passed for the rational purpose of furthering the legislature?s mandate to maintain a
system of public education, and do not impact future revenue proceeds from a particular
revenue stream. This court is free to express no opinion on the validity of any other
appropriation not directly at issue.? The appropriations here do no violence to Alaska?s
annual appropriation model.

The Defendants argue that the appropriations subvert the governor?s veto power
and the legislature?s power of appropriation because if they are upheld, nothing would
prevent a politically aligned legislature and governor from passing budgets for many years
into the future knowing that so long as future legislatures and governors were not similar in
agreement the original budget decisions would stick. Art. IX, 13 provides in pertinent part,
in relation to the legislature?s appropriations power, that, money shall be withdrawn
from the treasury except in accordance with appropriations made by law.? Art. 11, 15
describes the governor?s veto power by explaining in part that, ?[t]he governor may veto bills
passed by the legislature. He may, by veto, strike or reduce items in appropriation bills.? The
plain language of both clauses does not explicitly or implicitly prohibit the type of
appropriations at issue here.

The parties do not dispute that the Thirtieth Legislature in 2018 passed the
appropriations in HE 287 pursuant to its power of appropriation and that the governor in
2018 had the opportunity to veto the appropriations but chose not to. Accordingly, the
appropriations do not violate either the legislature?s power of appropriation or the
governor?s veto power.

Art. Ill, Si 16 of the Alaska Constitution vests the governor with the responsibility
?for the faithful execution of the laws.? The Defendants thus have a constitutional

obligation to execute the appropriations in SLA 2018See, eg, ili'lj'?fii?. 68 P.3d at 393. The court declines to decide an issue not before it, including in
relation to forward?funding for multiple or many years into the future.

DRUNK lili: NH 1? finsc final/Sir? Cam? Tiara/21
Page 9 of 10

therefore must execute them accordingly.33 To do otherwise infringes upon the legislature?s
power of appropriation and duty to fund public education under the Public Education
Clause.

The court grants the relief requested by the Plaintiff, including a declaratory
judgment that the Defendants have violated their duty to faithfully execute the law by failing
to execute the forward?funding appropriations at issue according to the statutory funding
procedures; an injunction mandating that the Defendants disburse the funds in issue in
accordance with the appropriations; an injunction prohibiting the Defendants from
impounding or withholding money from the appropriations; and an order requiring the
Defendants to provide to the Plaintiff an accounting of all of the expenditures of money
pursuant to the appropriations.

Thus, the Plaintiffs and the Intervenor?s motions for summary judgment are
GRANTED and the Defendants? motion for summary judgment is DENIED.

DATED this 7th day of November 2019 at Juneau, Alaska.

 
   
 
 

Daniel Schaliy
Superior Court Judge

CERTIFICATION
Copies Distributed

Date 
To 

 

 

32 The Defendants also have a statutory obligation to execute the appropriations pursuant to AS
14.17.610 and AS 14.17.410.

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