Haines is left to shoulder an increased financial burden as Governor Mike Dunleavy line item vetoed school bond debt reimbursement–the state’s contribution towards debt service for school projects. In Haines, that’s a $450,000 shortfall.
Alaska’s school bond debt reimbursement program provides state money to offset the cost of building new schools. Though there’s a moratorium on new projects, the state was continuing payments for projects it already agreed to help fund. Projects like the $17 million in bonds the Haines borough took out to pay for construction of a new school in 2005.
Now the community is left to make up a $450,000 shortfall. Skagway’s school building went up in 1985 and is paid in full.
Haines School administration is concerned about the cost shift from the bond to the borough.
“We’re just very cautious at this point,” said Roy Getchell is Haines Borough School District Superintendent. He says that while the governor is still working to cut spending, he is still concerned with providing quality education in the upper Lynn Canal.
“We’re going to take this one step at a time. We’re going to work hard to make sure our kids are not affected and we’re gonna open on time, ready to go. So we’re going to work with our community, work with our borough, work with our legislators to do what’s best for kids,”he said.
In Haines, the municipality will make up the difference by dipping into its reserves. The Haines Assembly considered raising property taxes in case the governor cut this program, but passed the FY20 budget with a set mill rate. They reasoned that municipal reserves are healthy enough to absorb the potential cost. The reserves are currently $2,748,041.
Borough manager Debra Schnabel says the cut will affect municipal employees as well.
“I think we need to acknowledge that the impact of the fifty percent cut to employees of the borough is also considerable,” she said.
The majority of municipal employees in Haines are unionized. They stood to receive a wage increase of 1.9% this year. That will be cut to 1%.
“Our negotiated agreement for the union was if the Governor cut the debt reimbursement program by fifty percent they would receive a different increase in their wages. A lesser increase,” she said.
The borough will save $22,000 across about 60 employee salaries. That wage reduction will be an amendment to the FY20 budget.