The Supreme Court to “Clear Up the Mud” on Student Allotments

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Part 9 of the series “The Last Frontier facing the New Frontier.” (Again with Practice Pointers!)

Clinton Campion, Sedor, Wendlandt, Evans & Filippi, LLC

Here in the Last Frontier, we have a long history of home schooling. Alaska’s first correspondence program was established in 1939 to meet the needs of students in remote areas of the territory. Over the decades, home school or correspondence study programs offered incentives to parents to enroll their students. These perks developed into the statutory student allotment funds found in Alaska Statutes. AS 14.03.300-.310.

AS 14.03.300-.310 included language which raised concerns of a potential violation with Alaska Constitution Article VII, Section 1 which prohibits the payment of public funds for the direct benefit of any religious or other private educational institution. Alaska’s Constitution

In July 2022, the Attorney General’s Office issue an opinion regarding the constitutionality of Student Allotments. Use of Correspondence School Allotments (alaska.gov)

In September 2022, we brought you a commentary on the Attorney General’s  Opinion, “Student Allotments to Private School Remain as ‘Clear as Mud.’” Student Allotments to Private Schools Remain as “Clear as Mud” – Association of Alaska School Boards (aasb.org) In that commentary, we identified low, medium, and high risk uses of student allotment funds for school districts. In this commentary, we noted that the Alaska Supreme Court had not yet defined the boundaries for student allotments. Based on recent litigation in Anchorage, the Supreme Court will now have the opportunity to provide clarification.

In January 2023, four parents challenged the constitutionality of AS 14.03.300-.310 in Anchorage Superior Court in Alexander et al v. Acting Commissioner Heidi Teshner, et al. The parents argued that the Student Allotment statutes allow parents to purchase services and materials from public, private, or religious organizations which constitutes a violation of Article VII, Section 1 of the Alaska Constitution. The State of Alaska, as well as a group of intervening parents, opposed the plaintiff parents’ arguments.

 Alaska Superior Court Judge Adolph Zeman heard oral argument on these issues on October 24, 2023. Judge Zeman issued an order on April 12, 2024 in favor of plaintiff parents. 3AN-23-04309CI – DocumentCloud In his order, Judge Zeman struck down AS 14.03.300-.310 entirely, explaining that “there is no workable way to construe the statutes to allow only constitutional spending.”

The State of Alaska will appeal Judge Zeman’s decision to the Alaska Supreme Court. The appeal process could take many months, or even years. All parties to the litigation are seeking a stay, or pause on the enforcement of the order, at least until the end of the current fiscal year (FY24).

The Alaska Supreme Court has reviewed Article VII, Section of the Alaska Constitution only once before. In 1979, the Alaska Supreme Court struck down as unconstitutional a tuition grant program which awarded Alaska residents attending private colleges an amount that covered the difference between public school and private school tuition. Sheldon Jackson College v. State, 599 P.2d 127. The Alaska Supreme Court found that the tuition grant program violated the direct benefit clause of Article VII, Section 1 of the Alaska Constitution.

In the meantime, school board members and school administrators should be aware of the potential short and long term impacts of the litigation.

In the short term, the order creates confusion for correspondence study programs in Alaska regarding its current obligations to reimburse parents and families for materials and services purchased for its students. The order did not address this issue. However, the order did not change the foundation funding formula so FY24 funding should remain intact. The order may impact enrollment, and subsequently funding for FY25.

In the long term, the risk identified in the order remains. Correspondence study programs must ensure compliance with the limitations in Article VII, Section 1 of the Alaska Constitution. Specifically, correspondence study programs should not directly partner with or reimburse private or religious educational institutions.

Practice Pointers for School Districts

School board members and administrators should consider the following issues regarding correspondence study programs:        

  • How dependent is your district on funding from correspondence study programs? Will you have to adjust your revenue forecast?
  • Is your district reimbursing home school families for tuition paid to private and/or religious schools? If so, your district should evaluate, in consultation with your district’s attorney, whether to continue this practice.
  • How is your district going to communicate with home school families about student allotment funds for the 2024-25 school year?

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