Anchorage officials explain how separate tax caps limit school funding

Divide over right-sizing

Assembly Member Meg Zaletel moved to add right-sizing as a discussion topic during a joint Assembly-school board meeting Friday. The motion passed without objection.

The addition came after the two bodies had already approved the meeting agenda, requiring an amendment mid-session to accommodate the topic.

Assembly Vice Chair Anna Brawley said both tax caps force budget cuts when population declines.

"We cut the budget when we lose population," Brawley said. "And that's not a choice."

Tax cap mechanics

Municipality officials explained how separate tax cap calculations for the city and Anchorage School District create diverging fiscal pressures that limit both bodies' ability to fund schools.

The municipal tax cap uses five-year rolling averages of inflation and population plus voter-approved bonds to set collection limits. The school district tax cap is calculated separately using only property taxes multiplied by the same inflation average, Office of Management and Budget Director Ona Brauss told the meeting.

Brauss said the required local contribution can spike suddenly, forcing the municipality to pay $11.2 million more than the prior year. When the municipality pays that increase, the state reduces its contribution by the same amount, she said. The additional local payment does not create new money for schools.