Case background:

In the early 1990s, the State of Alaska established a prioritized Capital Improvement Program (CIP) for the funding of school construction projects in Alaska. But the legislature failed to use the program, instead allocating money to projects in the districts of powerful urban legislators. CEAAC sued in 1997 with other plaintiffs. In 1999, Judge John Reese ruled that the state’s school construction practices were inequitable, unconstitutional, and racially discriminatory. In another aspect of the case, he ruled that the State of Alaska had breached its duty to the Alaska School Lands Trust. The case has never been appealed.

Legislative success:

After 1999, the state improved its record of funding rural schools on the CIP list, allocating $1.2 billion to those projects to date. CEAAC advocacy and Judge Reese’s judgment in Kasayulie provided leverage for rural legislators to obtain these funds. However, the basic problem the judge cited never received resolution: the funding of schools remained a matter of changeable annual appropriations, while urban schools received automatic funding of reimbursement for their bond issues for schools construction. In 2010, CEAAC worked with legislative allies to win passage of SB 237, which directs 24% of the funds allocated to bond debt reimbursement to rural schools on the department’s CIP list.

The settlement:

After summer-long discussions, negotiating teams completed an agreement signed in fall, 2011. The settlement contained the following terms:

• In a consent decree, the State recognizes the rural school construction funding mechanism in SB 239 (AS 14.11.025 and 14.11.030) as necessary to meet Judge Reese’s finding that the former system was unconstitutional. The mechanism channels to rural schools funding equal to 24% of school bond reimbursement, currently amounting to approximately $38 million annually. This legal acknowledgement will assist CEAAC in protecting the formula legislatively and having it fully funded.

• The State agrees to fund $146 million in capital projects for five new schools in Emmonak, Koliganek, Nightmute, Kwethluk and Kivalina, over and above the funding flowing through the mechanism. The schools would be included in capital budgets through FY 15. While funding is subject to appropriation, the settlement includes a reopener for CEAAC if the schools are not funded which would restore the case to its current status.

• The State agrees to pay up to $500,000 of CEAAC’s legal fees. CEAAC does not have to repay this money if it uses the reopener provision.

• CEAAC agrees to dismiss the Kasayulie suit and to drop its claims related to the Alaska School Lands Trust.