Alaska Municipal League calls on state to repay school bond debt shortfalls

Alaska's cities and boroughs are covering school construction debt that the Alaska Municipal League says the state should fully reimburse, and the league wants that gap closed before it widens further.

The league, which represents 165 cities, boroughs, and unified municipalities statewide, adopted Resolution 2026-18 calling on the Governor and the Alaska State Legislature to fully fund school bond debt reimbursement in the FY 2027 state budget and to repay what went unmet in FY 2026. The resolution also calls for an inflation-adjusted Base Student Allocation and a Base Facilities Allocation for major maintenance. The action is advocacy, not a binding funding decision; only the Legislature can appropriate the money.

The league's resolution asks the Governor and Legislature to "Address shortfalls from FY 2026 to ensure municipalities are made whole," and warns that shortfalls in school bond debt reimbursement place additional burdens on municipal budgets and local taxpayers. When the state underfunds its share of bond reimbursements, the league says, the difference falls on municipal budgets and local residents.

The Anchorage School District is projecting a deficit of more than $77 million for FY 2026-27. The district attributes the gap to "the cumulative effect of underfunding and growing fixed costs in areas such as healthcare, transportation, and utilities."

The resolution is part of a broader 2026 AML resolutions package. Resolution 2026-01 calls on the Legislature to stabilize K-12 funding by establishing an inflation-adjusted BSA and creating a Base Facilities Allocation for major maintenance. Resolution 2026-18 addresses school bond debt reimbursement specifically.

The FY 2027 budget process is the nearest legislative vehicle to address both the existing shortfall and the program's forward funding. Neither the Governor nor the Legislature has committed to acting on the league's request.