Dunleavy legislative wing parrots bogus $500 million claim

The Dunleavy wing of the Legislature, a minority group, got some bad information about Alaska school districts and ran with it.

The Dunleavy wing was certain that school districts have $500 million in extra cash and the wing members couldn’t stop talking about it, citing it as proof that there was no need to override the Dunleavy school bond debt veto.

The talking point was promoted by Ben Stevens, chief of staff for Dunleavy, according to Suzanne Downing, mouthpiece for the GOP.

“Stevens said that an annual audit of the various school funds for districts around the state shows that there are more than $500 million sitting in those funds that could be used by districts to pay back their bonds,” Downing wrote on her blog.

The $500 million claim is bogus, as that is not what the audit says. Perhaps Stevens looked at the lower right corner of this complicated chart and misinterpreted the document. Or maybe he was misquoted.

Most of the money reflected on the chart is tied up in capital projects, unpaid bills, inventory, insurance, self-insurance, federal impact aid, fuel, textbooks, transportation, required bond reserves and other categories.

Anyone who looks at the chart for more than 30 seconds should understand that you can’t add the numbers up from left to right and claim the total is excess cash.

Some districts are better off than others and have more reserves. The districts are audited and there is a state law that limits the amount of reserves they can keep. Every legislator should know this.

But the Dunleavy wing never bothered to get the facts straight when confronted with a healthy number like a half-billion to yak about.

The topic came up repeatedly in the debate Friday on overturning about $49 million in school bond payments for larger school districts, $20 million for rural districts and $5 million for the ferry system. The veto override failed, 37-20.

A majority of legislators supported the proposal, but a super-majority of 45 votes was needed to overturn a budget veto, giving the Dunleavy wing the final say.

Wing member Sen. Peter Micciche, who represents Kenai, falsely claimed that “collectively, school districts around the state are sitting on half-a billion dollars of fund balance, half a billion dollars.” He seemed to be astonished by reciting a phony number that he was certain was legitimate.

Micciche, who said he is a “huge supporter” of education, inflated the real total by hundreds of millions.

Fellow wing member Sen. Mia Costello of Anchorage, a former teacher, falsely claimed that the “Anchorage school district has $140 million in reserves. I do not necessarily see this as passing it on to the taxpayers with that amount of money in reserves. I believe that we can prioritize education in our schools and not pass that burden onto the taxpayers.”

Costello, who said she is a “huge advocate” of education, was $110 million too high on the Anchorage number.

The Anchorage school district said later that the $140 million total combines different categories of funds, most of which are committed for school operations.

The Anchorage “reserved fund balance” of $57 million is just that, reserved for everything from inventory to insurance. About $20 million is set aside for self-insurance.

The capital projects fund of $23 million is for specific voter-approved construction projects. The “unreserved fund balance” of $59.6 million includes $24 million that is set aside under municipal rules to help keep the bond rating up. That money can’t be spent. About $4 million of the fund balance went to offset teacher reductions.

That leaves about $31 million for emergencies and unexpected events, like earthquakes.

Legislators who are not part of the Dunleavy wing were not confused by the bad information.

“There is not $500 million sitting in school district accounts ready to be spent,” said Juneau Sen. Jesse Kiehl.

Sitka Sen. Bert Stedman said the $500 million claim was “garbage in the air.”

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