Who pays when the state underfunds school construction debt?

When an Alaska community builds or renovates a school, the state has long promised to pay back part of the borrowing cost. Lately it hasn't paid the full share — and the difference lands on local budgets and taxpayers.

The Alaska Municipal League, which represents 165 cities and boroughs, is pressing to change that. In a resolution, it asks the Governor and Legislature to fully fund school bond debt reimbursement in the FY2027 budget, make up the FY2026 shortfall, and tie K-12 funding to inflation while adding a new allowance for building maintenance.

The stakes are concrete: the Anchorage School District projects a deficit topping $77 million next year, which it blames on chronic underfunding and rising costs for healthcare, transportation, and utilities.

It's a request, not a result. Only the Legislature can appropriate the money — against a long list of competing demands and a tight state budget — and neither it nor the Governor has committed to acting.