Budget woes may lead to moratorium on school projects in Alaska

The Alaska Legislature is considering a bill to suspend the state’s reimbursement funds for local school construction projects for five years.

Alaska currently reimburses communities for 60% or 70% of the project cost. The state has already reduced education funds to cities and towns. In rural districts without tax bases, the state funds the full cost of school construction, but has faced lawsuits saying it hasn’t adequately funded construction in those areas.

The bill would resume the reimbursement program in five years at lower rates, ranging from 40% to 60%, depending on the type of construction. The state faces an expected deficit of $3.5 billion this year. The state provides about $220 million in school construction funding each year.