Haines would face a $450,000 loss in funding if a proposal to cut the state’s share of school debt reimbursement is approved by the Alaska Legislature.
The Haines Borough has taken out about $18.5 million in bonds to pay for a new school and renovations.
The local expense of the bond was eased by an agreement with the state. The state takes care of 70 percent of the yearly payments, the borough pays for 30 percent.
Haines is just one of many municipalities that have this type of arrangement with the state to pay for construction and renovation of schools.
Homer Representative Paul Seaton is co-chair of the House Finance Committee. He proposed cutting the state payments by about half.
In Haines, it would mean a $450,000 loss in the upcoming fiscal year.
“It’s important to us,” said Haines Interim Borough Manager Brad Ryan. “I think we’re going to have to look really hard at what services that could impact or if we’re going to increase the mill rate. We’re going to have to make some really hard decisions.”
Last year, Gov. Walker vetoed a quarter of school debt payments. It caused a $225,000 loss for Haines. Finance Director Jila Stuart said the borough drew from its general fund balance to make up the difference.
The House Finance Committee is taking public testimony on its draft operating budget proposal this weekend.